CARBO CERAMICS INC (Form: 10-Q, Received: 07/27/2017 11:03:43)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 001-15903

CARBO CERAMICS INC.

(Exact name of registrant as specified in its charter)

DELAWARE	72-1100013
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

575 North Dairy Ashford

Suite 300

Houston, TX 77079

(Address of principal executive offices)

(281) 921-6400

(Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 21, 2017, 27,147,346 shares of the registrant's Common Stock, par value $.01 per share, were outstanding.

CARBO CERAMICS INC.

Index to Quarterly Report on Form 10-Q

PART I. FINANCIAL INFORMATION		PAGES

Item 1.	Financial Statements	3

	Consolidated Balance Sheets - June 30, 2017 (Unaudited) and December 31, 2016	3

	Consolidated Statements of Operations (Unaudited) - Three and six months ended June 30, 2017 and 2016	4

	Consolidated Statements of Comprehensive Loss (Unaudited) - Three and six months ended June 30, 2017 and 2016	5

	Consolidated Statements of Cash Flows (Unaudited) - Six months ended June 30, 2017 and 2016	6

	Notes to Consolidated Financial Statements (Unaudited)	7-13

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14-19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20

Item 4.	Controls and Procedures	20

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosure	22

Item 5.	Other Information	22

Item 6.	Exhibits	22

Signatures		23

Exhibit Index		24

PART I. FINANCI AL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CARBO CERAMICS INC.

CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

	June 30,			December 31,
	2017			2016
	(Unaudited)			(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	39,361		$	91,680
Restricted cash		5,723			—
Trade accounts and other receivables, net		37,396			23,622
Inventories:
Finished goods		69,613			74,133
Raw materials and supplies		22,848			23,041
Total inventories		92,461			97,174
Prepaid expenses and other current assets		5,346			3,548
Income tax receivable		2,396			1,199
Total current assets		182,683			217,223
Restricted cash		5,543			—
Property, plant and equipment:
Land and land improvements		45,240			45,530
Land-use and mineral rights		19,696			19,696
Buildings		87,470			87,318
Machinery and equipment		647,694			647,753
Construction in progress		92,935			92,704
Total property, plant and equipment		893,035			893,001
Less accumulated depreciation and amortization		420,777			398,898
Net property, plant and equipment		472,258			494,103
Goodwill		3,500			3,500
Intangible and other assets, net		8,674			8,631
Total assets	$	672,658		$	723,457
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt, current portion	$	—		$	13,000
Notes payable		1,246			551
Accounts payable		8,967			7,782
Accrued payroll and benefits		3,233			3,434
Derivative instruments		2,490			1,599
Other accrued expenses		10,707			8,438
Total current liabilities		26,643			34,804
Deferred income taxes		1,602			1,236
Long-term debt, net		48,119			42,404
Notes payable, related parties		25,997			25,000
Other long-term liabilities		4,141			3,443
Shareholders' equity:
Preferred stock, par value $0.01 per share, 5,000 shares authorized, none outstanding		—			—
Common stock, par value $0.01 per share, 80,000,000 shares authorized; 27,147,346 and 26,881,066 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively		271			269
Additional paid-in capital		123,899			117,192
Retained earnings		475,635			533,435
Accumulated other comprehensive loss		(33,649	)		(34,326	)
Total shareholders' equity		566,156			616,570
Total liabilities and shareholders' equity	$	672,658		$	723,457

The accompanying notes are an integral part of these statements .

CARBO CERAMICS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues	$	43,572		$	20,651		$	78,242		$	53,753
Cost of sales		57,005			40,663			111,133			97,406
Gross loss		(13,433	)		(20,012	)		(32,891	)		(43,653	)
Selling, general and administrative expenses		10,265			10,034			21,062			21,509
(Gain) Loss on disposal or impairment of assets		—			(23	)		—			925
Operating loss		(23,698	)		(30,023	)		(53,953	)		(66,087	)
Other expense:
Interest expense, net		(1,627	)		(1,623	)		(3,715	)		(2,419	)
Other, net		4			8			191			83
		(1,623	)		(1,615	)		(3,524	)		(2,336	)
Loss before income taxes		(25,321	)		(31,638	)		(57,477	)		(68,423	)
Income tax benefit		(499	)		(11,342	)		(211	)		(23,443	)
Net loss	$	(24,822	)	$	(20,296	)	$	(57,266	)	$	(44,980	)
Loss per share:
Basic	$	(0.93	)	$	(0.88	)	$	(2.15	)	$	(1.95	)
Diluted	$	(0.93	)	$	(0.88	)	$	(2.15	)	$	(1.95	)
Other information:
Dividends declared per common share	$	—		$	—		$	—		$	—

The accompanying notes are an integral part of these statements.

CARBO CERAMICS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

($ in thousands)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2017			2016			2017			2016
Net loss	$	(24,822	)	$	(20,296	)	$	(57,266	)	$	(44,980	)
Other comprehensive income:
Foreign currency translation adjustment		(1,027	)		1,127			677			2,570
Deferred income taxes		—			—			—			—
Other comprehensive income, net of tax		(1,027	)		1,127			677			2,570
Comprehensive loss	$	(25,849	)	$	(19,169	)	$	(56,589	)	$	(42,410	)

The accompanying notes are an integral part of these statements.

CARBO CERAMICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

(Unaudited)

	Six months ended
	June 30,
	2017			2016
Operating activities
Net loss	$	(57,266	)	$	(44,980	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		24,101			24,448
Provision for doubtful accounts		413			829
Deferred income taxes		618			(23,340	)
Loss on disposal or impairment of assets		—			925
Foreign currency transaction loss (gain), net		2			(111	)
Stock compensation expense		2,750			3,399
PIK accrual on notes payable, related parties		997			—
Change in fair value of derivative instruments		159			(3,725	)
Changes in operating assets and liabilities:
Trade accounts and other receivables		(14,128	)		26,210
Inventories		4,689			(1,207	)
Prepaid expenses and other current assets		(553	)		833
Accounts payable		1,214			(2,194	)
Accrued expenses		1,853			(9,136	)
Income tax receivable, net		(1,171	)		37,200
Other, net		1,405			283
Net cash (used in) provided by operating activities		(34,917	)		9,434
Investing activities
Capital expenditures		(1,176	)		(6,439	)
Net cash used in investing activities		(1,176	)		(6,439	)
Financing activities
Repayments on long-term debt		(3,250	)		(26,033	)
Repayments on insurance financing agreement		(551	)		—
Payments of debt issuance costs		(875	)		(339	)
Proceeds from notes payable, related parties		—			25,000
Purchase of common stock		(533	)		(441	)
Net cash used in financing activities		(5,209	)		(1,813	)
Effect of exchange rate changes on cash		249			675
Net (decrease) increase in cash and cash equivalents and restricted cash		(41,053	)		1,857
Cash and cash equivalents and restricted cash at beginning of period		91,680			78,866
Cash and cash equivalents and restricted cash at end of period	$	50,627		$	80,723
Supplemental cash flow information
Interest paid	$	761		$	1,824
Income taxes paid	$	—		$	—

The accompanying notes are an integral part of these statements.

CARBO CERAMICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in thousands, except per share data)

(Unaudited)

1.	Basis of Presentation

The accompanying unaudited consolidated financial statements of CARBO Ceramics Inc. have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. The consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements at that date. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the annual report on Form 10-K of CARBO Ceramics Inc. for the year ended December 31, 2016.

The consolidated financial statements include the accounts of CARBO Ceramics Inc. and its operating subsidiaries (the “Company”). All significant intercompany transactions have been eliminated.

Beginning in late 2014, a severe decline in oil and natural gas prices led to a significant decline in oil and natural gas industry drilling activities and capital spending. As a result of the continued negative impact this has had on its business, the Company continues to operate its plants at significantly reduced levels. As of June 30, 2017, the Company was producing ceramic proppants from its Eufaula, Alabama and Kopeysk, Russia manufacturing facilities, and processing sand at its Marshfield, Wisconsin facility. The Company produces ceramic pellets for the industrial markets in a limited capacity, and when market demands, at our McIntyre, Georgia facility. Our Millen, Georgia facility is currently mothballed, and our Toomsboro, Georgia facility is currently idled. As a result of the steps the Company has taken to enhance its liquidity, the Company currently believes that cash on hand will enable the Company to meet its working capital, capital expenditure, debt service and other funding requirements for at least one year from the date of this Form 10-Q. The Company’s view regarding sufficiency of cash and liquidity is primarily based on our financial forecast for 2017 and 2018, which is impacted by various assumptions regarding demand and sales prices for our products. Although the Company has observed certain factors in the first six months of 2017 that could be indicative of improving industry conditions, its financial forecasts in recent periods have not always been accurate due to the inability to estimate customer demand, which is highly volatile in the current operating environment. The Company has no committed sales backlog from its customers. As a result, there is no guarantee that its financial forecast, which projects sufficient cash will be available to meet planned operating expenses and other cash needs, will be achieved.

Additionally, the construction projects relating to the second production line at Millen, Georgia and the second phase of the retrofit of an existing plant with the KRYPTOSPHERE® technology remain suspended. As of June 30, 2017, the value of the temporarily suspended projects relating to these two projects totaled approximately 93% of the Company’s total construction in progress, and both projects are over 90% complete.

Deferred Taxes – Valuation Allowance

Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, provides the carrying value of deferred tax assets should be reduced by the amount not expected to be realized. A company should reduce deferred tax assets by a valuation allowance if, based on the weight of all available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. ASC 740 requires all available evidence, both positive and negative, be considered to determine whether a valuation allowance for deferred tax assets is needed in the financial statements. Additionally there can be statutory limitations and losses also assessed on the deferred tax assets should certain conditions arise. As a result of the significant decline in oil and gas activities and net losses incurred over the several quarters prior to the first quarter of 2017, we determined during the three months ended March 31, 2017 that it was more likely than not that a portion of our deferred tax assets will not be realized in the future. Our valuation allowance against a portion of our deferred taxes as of June 30, 2017 was $19,703. Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities.

Restricted Cash

As a result of the repayment of the Wells Fargo term loan, combined with the continued use of letters of credit and corporate cards with Wells Fargo (see Note 7), a portion of the Company’s cash balance is now restricted to its use in order to provide collateral to Wells Fargo. As of June 30, 2017 and December 31, 2016, restricted cash was $11,266 and $0, respectively.

Lower of Cost or Market Adjustments

As of June 30, 2017 and 2016, the Company reviewed the carrying values of all inventories and concluded that no adjustments were warranted for finished goods and raw materials intended for use in the Company’s manufacturing process.

Manufacturing Production Levels Below Normal Capacity

As a result of the Company substantially reducing manufacturing production levels, including by idling certain facilities, certain production costs have been expensed instead of being capitalized into inventory. The Company expenses fixed production overhead amounts in excess of amounts that would have been allocated to each unit of production at normal production levels. For the three months ended June 30, 2017 and 2016, the Company expensed $10,797 and $13,515, respectively, in production costs. For the six months ended June 30, 2017 and 2016, the Company expensed $22,009 and $23,222, respectively, in production costs.

Long-lived and other noncurrent assets impairment considerations

As noted, the Company has temporarily idled production at various manufacturing facilities, including throughout 2017 and 2016. The Company does not assess temporarily idled assets for impairment unless events or circumstances indicate that the carrying amounts of those assets may not be recoverable. Short-term stoppages of production for less than one year do not generally significantly impact the long-term expected cash flows of the idled facility. As of March 31, 2016, as a result of changes in the planned usage of certain long-term bauxite raw materials, the Company evaluated the carrying value of those bauxite raw materials. Based upon this evaluation, during the three months ended March 31, 2016, the Company recognized an impairment charge of $1,065 on these bauxite raw material inventories. At December 31, 2016, as a result of the continued and severity of the market downturn, the Company identified indicators of impairments related to each of its domestic manufacturing plant asset groups. The Company completed undiscounted cash flow analyses on that date and determined no impairment charge was necessary at that time. As of June 30, 2017, the Company concluded that there were no events or circumstances that would indicate that carrying amounts of long-lived and other noncurrent assets might be impaired given that results for the first six months of 2017 met our expectations from our analysis as of December 31, 2016 and given that our future outlook has not significantly changed since that date. However, the Company continues to monitor market conditions closely. Further deterioration of market conditions could result in impairment charges being taken on the Company’s long-lived and other noncurrent assets, including the Company’s manufacturing plants, goodwill and intangible assets. The Company will evaluate long-lived and other noncurrent assets for impairment at such time that events or circumstances indicate that carrying amounts might be impaired.

2.	Loss Per Share

The following table sets forth the computation of basic and diluted loss per share under the two-class method:

	Three months ended						Six months ended
	June 30,						June 30,
	2017			2016			2017			2016
Numerator for basic and diluted loss per share:
Net loss	$	(24,822	)	$	(20,296	)	$	(57,266	)	$	(44,980	)
Effect of reallocating undistributed earnings of participating securities		—			—			—			—
Net loss available under the two-class method	$	(24,822	)	$	(20,296	)	$	(57,266	)	$	(44,980	)
Denominator:
Denominator for basic loss per share--weighted-average shares		26,665,092			23,108,889			26,636,394			23,085,725
Effect of dilutive potential common shares		—			—			—			—
Denominator for diluted loss per share--adjusted weighted-average shares		26,665,092			23,108,889			26,636,394			23,085,725
Basic loss per share	$	(0.93	)	$	(0.88	)	$	(2.15	)	$	(1.95	)
Diluted loss per share	$	(0.93	)	$	(0.88	)	$	(2.15	)	$	(1.95	)

3.	Common Stock Repurchase Program

On January 28, 2015, the Company’s Board of Directors authorized the repurchase of up to two million shares of the Company’s common stock. Shares are effectively retired at the time of purchase. As of June 30, 2017, the Company had not repurchased any shares under the plan.

4.	Natural Gas Derivative Instruments

Natural gas is used to fire the kilns at the Company’s domestic manufacturing plants. In an effort to mitigate potential volatility in the cost of natural gas purchases and reduce exposure to short-term spikes in the price of this commodity, from time to time, the Company enters into contracts to purchase a portion of the anticipated monthly natural gas requirements at specified prices. Contracts are geographic by plant location. As a result of the Company’s significantly reducing production levels and not taking delivery of all of the contracted natural gas quantities, the Company accounts for relevant contracts as derivative instruments.

Derivative accounting requires the natural gas contracts to be recognized as either assets or liabilities at fair value with an offsetting entry in earnings. The Company uses the income approach in determining the fair value of these derivative instruments. The model used considers the difference, as of each balance sheet date, between the contracted prices and the New York Mercantile Exchange (“NYMEX”) forward strip price for each contracted period. The estimated cash flows from these contracts are discounted using a discount rate of 8.0%, which reflects the nature of the contracts as well as the timing and risk of estimated cash flows associated with the contracts. The discount rate had an immaterial impact on the fair value of the contracts for the six months ended June 30, 2017. The last of these natural gas contracts will expire in December 2018. During the three months ended June 30, 2017 and 2016, the Company recognized a $309 and $824 loss, respectively, in cost of sales on derivatives instruments. During the six months ended June 30, 2017 and 2016, the Company recognized a $1,200 loss and a $597 gain, respectively, in cost of sales on derivative instruments. The cumulative present value of these natural gas derivative contracts as of June 30, 2017 are presented as current and long-term liabilities, as applicable, in the Consolidated Balance Sheet.

At June 30, 2017, the Company had contracted for delivery a total of 3,060,000 MMBtu of natural gas at an average price of $4.37 per MMBtu through December 31, 2018. Contracts covering 2,880,000 MMBtu are subject to accounting as derivative instruments. Future decreases in the NYMEX forward strip prices will result in additional derivative losses while future increases in the NYMEX forward strip prices will result in derivative gains. Future gains or losses will approximate the change in NYMEX natural gas prices relative to the total quantity of natural gas under contracts now subject to accounting as derivatives. The historical average NYMEX natural gas contract settlement prices for the three months ended June 30, 2017 and 2016 were $3.18 per MMBtu and $1.95 per MMBtu, respectively.

5.	Fair Value Measurements

The Company’s derivative instruments are measured at fair value on a recurring basis. U.S. GAAP establishes a fair value hierarchy that has three levels based on the reliability of the inputs used to determine the fair value. These levels include: (1) Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; (2) Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and (3) Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s natural gas derivative instruments are included within Level 2 of the fair value hierarchy (see Note 4 herein for additional information on the derivative instruments). The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value:

	Fair value as of June 30, 2017
	Level 1		Level 2			Level 3		Total
Liabilities:
Derivative instruments		—		(3,626	)		—		(3,626	)
Total fair value	$	—	$	(3,626	)	$	—	$	(3,626	)

	Fair value as of December 31, 2016
	Level 1		Level 2			Level 3		Total
Liabilities:
Derivative instruments		—		(3,468	)		—		(3,468	)
Total fair value	$	—	$	(3,468	)	$	—	$	(3,468	)

At June 30, 2017, the fair value of the Company’s long-term debt approximated the carrying value.

6.	Stock Based Compensation

On May 16, 2017, the shareholders approved the Amended and Restated 2014 CARBO Ceramics Inc. Omnibus Incentive Plan (the “Amended and Restated 2014 Omnibus Incentive Plan”). Under the Amended and Restated 2014 Omnibus Incentive Plan, the Company may grant cash-based awards, stock options (both non-qualified and incentive) and other equity-based awards (including stock appreciation rights, phantom stock, restricted stock, restricted stock units, performance shares, deferred share units or share-denominated performance units) to employees and non-employee directors. The amount paid under the Amended and Restated 2014 Omnibus Incentive Plan to any single participant in any calendar year with respect to any cash-based award shall not exceed $5,000. Awards may be granted with respect to a number of shares of the Company’s Common Stock that in the aggregate does not exceed 1,450,000 shares prior to the fifth anniversary of its effective date, plus (i) the number of shares that are forfeited, cancelled or returned, and (ii) the number of shares that are withheld from the participants to satisfy an option exercise price or minimum statutory tax withholding obligations. No more than 100,000 shares may be granted to any single participant in any calendar year. Equity-based awards may be subject to performance-based and/or service-based conditions. With respect to stock options and stock appreciation rights granted, the exercise price shall not be less than the market value of the underlying Common Stock on the date of grant. The maximum term of an option is ten years. Restricted stock awards granted generally vest (i.e., transfer and forfeiture restrictions on these shares are lifted) proportionately on each of the first three anniversaries of the grant date, but subject to certain limitations, awards may specify other vesting periods. As of June 30, 2017, 745,594 shares were available for issuance under the Amended and Restated 2014 Omnibus Incentive Plan. Although the 2009 CARBO Ceramics Inc. Omnibus Incentive Plan (the “2009 Omnibus Incentive Plan”) has expired, certain nonvested restricted shares granted under that plan remain outstanding in accordance with its terms.

A summary of restricted stock activity and related information for the six months ended June 30, 2017 is presented below:

	Shares			Weighted-Average Grant-Date Fair Value Per Share
Nonvested at January 1, 2017		339,140		$	28.59
Granted		297,685		$	10.30
Vested		(143,094	)	$	36.02
Forfeited		(37,024	)	$	18.42
Nonvested at June 30, 2017		456,707		$	15.17

As of June 30, 2017, there was $5,178 of total unrecognized compensation cost related to restricted shares granted under both the expired 2009 Omnibus Incentive Plan and the Amended and Restated 2014 Omnibus Incentive Plan. That cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the six months ended June 30, 2017 was $2,002.

The Company made market-based cash awards to certain executives of the Company pursuant to the Amended and Restated 2014 Omnibus Incentive Plan. As of June 30, 2017, the total target award outstanding was $2,822. The payout of awards can range from 0% to 200% based on the Company’s Relative Total Shareholder Return calculated over a three year period beginning January 1 of the year each grant was made.

The Company also made phantom stock awards to key employees pursuant to the Amended and Restated 2014 Omnibus Incentive Plan. The units subject to a phantom stock award vest and cease to be forfeitable in equal annual installments over a three-year period. Participants awarded units of phantom stock are entitled to a lump sum cash payment equal to the fair market value of a share of Common Stock on the vesting date. In no event will Common Stock of the Company be issued with regard to outstanding phantom stock awards. As of June 30, 2017, there were 163,215 units of phantom stock granted under the Amended and Restated 2014 Omnibus Incentive Plan, of which 4,189 have vested and 8,234 have been forfeited. As of June 30, 2017, nonvested units of phantom stock under the Amended and Restated 2014 Omnibus Incentive Plan had a total value of $1,033, a portion of which is accrued as a liability within Accrued Payroll and Benefits. Compensation expense for these units of phantom stock will be recognized over the three-year vesting period. The amount of compensation expense recognized each period will be based on the fair value of the Company’s common stock at the end of each period.

7.	Long-Term Debt and Notes Payable

On March 2, 2017, the Company entered into an Amended and Restated Credit Agreement (the “New Credit Agreement”) with Wilks Brothers, LLC (“Wilks”) to replace its current term loan with Wells Fargo Bank, National Association (“Wells Fargo”) and provide the Company with additional liquidity for a longer term. The New Credit Agreement is a $65,000 facility maturing on December 31, 2022, that consists of a $52,651 term loan that was made at closing to pay off Wells Fargo and an additional term loan of $12,349 that was made in a single advance to the Company in July 2017 after the Company satisfied certain post-closing conditions. The $52,651 term loan was a non-cash transaction to the Company as Wilks directly paid Wells Fargo and assumed the New Credit Agreement. The Company’s obligations bear interest at 9.00% and are guaranteed by its two domestic operating subsidiaries. No principal repayments are required until maturity (except in unusual circumstances), and there are no financial covenants. In lieu of making cash interest payments, the Company has the option during the first two years of the loan to make interest payments as payment-in-kind, or PIK, by applying an 11.00% rate to the interest payment due (instead of the 9.00% cash interest rate) and capitalizing the resulting amount to the outstanding principal balance of the loan. The Company is required to provide Wilks 30 day notice of its intent to exercise this option for an interest payment. The Company does not anticipate utilizing this option and has therefore accrued interest expense using the 9.00% cash interest rate.

The loan cannot be prepaid during the first three years without making the lenders whole for interest that would have been payable over the entire remaining term of the loan. The Company’s obligations under the New Credit Agreement are secured by: (i) a pledge of all accounts receivable and inventory, (ii) cash in certain accounts, (iii) domestic distribution assets residing on owned real property, (iv) the Company’s Marshfield, Wisconsin and Toomsboro, Georgia plant facilities and equipment, and (v) certain real property interests in mines and minerals. Other liens previously in favor of Wells Fargo were released.

As of June 30, 2017, the Company’s outstanding debt under its New Credit Agreement was $52,651. During the six months ended June 30, 2017, the Company expensed $455 of debt issuance costs relating to the previous Wells Fargo Amended Credit Agreement. As of June 30, 2017, the Company had $825 of unamortized debt issuance costs relating to the New Credit Agreement that are presented as a direct reduction from the carrying amount of the long-term debt obligation. The Company had $10,230 and $11,980 in standby letters of credit issued through Wells Fargo as of June 30, 2017 and December 31, 2016, respectively, primarily as collateral relating to our natural gas commitments and railcar leases. As of December 31, 2016, the Company’s outstanding debt under its previous Wells Fargo Amended Credit Agreement was $55,901, of which $13,000 was classified as current and $42,901 was classified as long-term. As of December 31, 2016, the Company had $497 of debt issuance costs that are presented as a direct reduction from the carrying amount of the long-term debt obligation. For the year ended December 31, 2016, the weighted average interest rate was 6.447% based on LIBOR-based rate borrowings.

On March 2, 2017, in connection with entry into the New Credit Agreement, the Company issued a Warrant (the “Warrant”) to Wilks. Subject to the terms of the Warrant, the Warrant entitles the holder thereof to purchase up to 523,022 shares of the Common Stock, at an exercise price of $14.91 per share, payable in cash. The Warrant expires on December 31, 2022. Based on a Schedule 13D filing with the SEC, as of March 10, 2017, Wilks owned 9.6% of the Company’s outstanding common stock, and should Wilks fully exercise the Warrant to purchase an additional 523,022 shares, it would hold 11.5% of the Company’s outstanding common stock. The Company allocated the proceeds received of $52,651 to each of these two instruments based on their relative fair values. Accordingly, the Company recorded long-term debt of $48,780 and warrants of $3,871 at inception. The amount associated with the Warrant was recorded as an increase to additional paid-in capital. The original issue discount of the long-term debt will be amortized using the effective interest method over the term of the loan. As of June 30, 2017, the unamortized original issue discount was $3,707.

In May 2016, the Company received proceeds of $25,000 from the issuance of separate unsecured Promissory Notes (the “Notes”) to two of the Company’s Directors. Each Note matures on April 1, 2019 and bears interest at 7.00%. On March 2, 2017, in connection with the New Credit Agreement, the Notes were amended to provide for payment-in-kind, or PIK, interest payments at 8.00% until the lenders under the New Credit Agreement receive two consecutive semi-annual cash interest payments. On April 1, 2017, the Company made a $997 interest payment as PIK, and capitalized the resulting amount to the outstanding principal balance. As of June 30, 2017, the outstanding principal balance of the Notes was $25,997.

Interest cost for the six months ended June 30, 2017 and 2016 was $3,965 and $2,747, respectively, of which $0 and $80 was capitalized into the cost of property, plant and equipment in the six months ended June 30, 2017 and 2016, respectively. Interest cost primarily includes interest expense relating to our debts as well as amortization and the write-off of debt issuance costs and amortization of the original issue discount associated with the New Credit Agreement and Warrant.

In June 2017, the Company entered into an agreement with a financing company to finance certain insurance premiums in the amount of $1,246. Payments are due monthly through April 1, 2018 with an effective interest rate of 0.91%. The liability is included in Notes Payable within Current Liabilities on the Consolidated Balance Sheet.

8.	Shareholders’ Equity

On July 28, 2016, the Company filed a prospectus supplement and associated sales agreement related to an at-the-market (“ATM”) equity offering program pursuant to which the Company may sell, from time to time, common stock having an aggregate offering price of up to $75,000 through Cowen and Company LLC, as sales agent, for general corporate purposes. As of June 30, 2017, the Company had sold a total of 3,405,709 shares of its common stock under the ATM program for $46,612, or an average of $13.69 per share, and received proceeds of $45,564, net of commissions of $1,048. These sales occurred in August 2016 and September 2016, and the Company has not utilized the program since those sales.

As of June 30, 2017, the Company’s net investment that is subject to foreign currency fluctuations totaled $15,626, and the Company has recorded a cumulative foreign currency translation loss of $33,649, all related to the Russian Ruble. This cumulative translation loss is included in and is the only component of accumulated other comprehensive loss within shareholders’ equity. No income tax benefits have been recorded on these losses as a result of the uncertainty about recoverability of the related deferred income tax benefits.

9.	New Accounting Pronouncements

In August 2015, the FASB issued ASU No. 2015-14, “ Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date ,” which revises the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”) to interim and annual periods beginning after December 15, 2017, with early adoption permitted no earlier than interim and annual periods beginning after December 15, 2016. In May 2014, the FASB issued ASU 2014-09, which amends current revenue guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Upon initial evaluation, the Company does not believe there will be a material impact on its consolidated financial statements, and is currently evaluating the potential impact on disclosures. The Company’s analysis of proppant sales contracts under ASC 606 supports the recognition of revenue at a point in time, typically when title passes to the customer upon delivery, for the majority of contracts, which is consistent with the current revenue recognition model. The Company is still evaluating the potential impact, if any, on sales contracts relating to the sale of fracture stimulation software and environmental products and services. The Company expects to utilize the modified retrospective approach, which requires a cumulative adjustment to retained earnings and no adjustments to prior periods. The Company does not expect a material cumulative adjustment upon adoption based on the annual revenue generated from the sale of fracture stimulation software and environmental products and services.

10.	Segment Information

The Company has two operating segments: 1) oilfield technologies and services and 2) environmental products and services. Discrete financial information is available for each operating segment. Management of each operating segment reports to our Chief Executive Officer, the Company’s chief operating decision maker, who regularly evaluates income before income taxes as the measure to evaluate segment performance and to allocate resources. The accounting policies of each segment are the same as those described in the summary of significant accounting policies in Note 1 of the consolidated financial statements included in the annual report on Form 10-K for the year ended December 31, 2016.

The Company’s oilfield technologies and services segment manufactures and sells technology ceramic, base ceramic, and frac sand proppants for use primarily in the hydraulic fracturing of natural gas and oil wells. All of the Company’s ceramic proppant products have similar production processes and economic characteristics and are marketed predominantly to pressure pumping companies that perform hydraulic fracturing for major oil and gas companies. The Company’s manufacturing facilities also produce ceramic pellets for use in various industrial technology applications, including but not limited to casting and milling. This segment also promotes increased production and Estimated Ultimate Recovery (“EUR”) of oil and natural gas by providing industry leading technology to Design, Build, and Optimize the Frac ^TM . Through our wholly-owned subsidiary StrataGen, Inc., we sell one of the most widely used fracture stimulation software under the brand FracPro ^® and provide fracture design and consulting services to oil and natural gas E&P companies under the brand StrataGen.

Our environmental products and services segment is intended to protect operators’ assets, minimize environmental risks, and lower lease operating expense (“LOE”). AGPI, a wholly-owned subsidiary of ours, provides spill prevention, containment and countermeasure systems for the oil and gas industry. AGPI uses proprietary technology designed to enable its clients to extend the life of their storage assets, reduce the potential for hydrocarbon spills and provide containment of stored materials.

Summarized financial informatio n for the Company’s operating segments for the three and six months ended June 30, 2017 and 2016 is shown in the following tables. Intersegment sales are not material.

	Oilfield Technologies and Services			Environmental Products and Services			Total
	($ in thousands)
Three Months Ended June 30, 2017
Revenue from external customers	$	37,202		$	6,370		$	43,572
(Loss) income before income taxes		(25,436	)		115			(25,321	)
Depreciation and amortization		11,340			331			11,671
Three Months Ended June 30, 2016
Revenue from external customers	$	17,677		$	2,974		$	20,651
Loss before income taxes		(30,644	)		(994	)		(31,638	)
Depreciation and amortization		11,753			404			12,157
Six Months Ended June 30, 2017
Revenue from external customers	$	66,823		$	11,419		$	78,242
Loss before income taxes		(57,199	)		(278	)		(57,477	)
Depreciation and amortization		23,434			667			24,101
Six Months Ended June 30, 2016
Revenue from external customers	$	47,086		$	6,667		$	53,753
Loss before income taxes		(66,644	)		(1,779	)		(68,423	)
Depreciation and amortization		23,606			842			24,448

11.	Legal Proceedings

The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

12.	Subsequent Events

In July 2017, the Company satisfied certain post-closing conditions of the New Credit Agreement and received additional proceeds of $12,349 from the Wilks. As of July 27, 2017, the outstanding principal balance of the New Credit Agreement was $65,000.

On July 21, 2017, the Company entered into a Share Purchase Agreement to sell our Russian proppant business for $22,000. The transaction is subject to local regulatory approval and is expected to close during the third quarter of 2017. The net book value of net assets held by our Russian proppant business is $16,113 as of June 30, 2017. The Company also has recorded a cumulative translation adjustment loss of $33,649 as a reduction of shareholders’ equity as of June 30, 2017. Given the terms of the agreement involve the sale of our Russian proppant business, we anticipate reclassifying this amount out of accumulated other comprehensive loss and into earnings upon the close of the transaction during the third quarter. The exact amount of the loss recorded on this transaction will depend on foreign exchange rates on the date of close.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

CARBO Ceramics Inc. (“we,” “us,” “our” or our “Company”) is a technology company that provides products and services to the global oil and gas and industrial markets to enhance value for its clients. The Company conducts its business within two operating segments: 1) oilfield technologies and services and 2) environmental products and services.

Our oilfield technologies and services segment includes the manufacturing and selling of technology ceramic, base ceramic, and frac sand proppant products for use primarily in the hydraulic fracturing of oil and natural gas wells, Fracpro® software for the design of fracture treatments, and StrataGen consulting services for the optimizing of well completions. Hydraulic fracturing is the most widely used method of increasing production from oil and natural gas wells. The hydraulic fracturing process consists of pumping fluids down a natural gas or oil well at pressures sufficient to create fractures in the hydrocarbon-bearing rock formation. A granular material, called proppant, is suspended and transported in the fluid and fills the fracture, “propping” it open once high-pressure pumping stops. The proppant filled fracture creates a conductive channel through which the hydrocarbons can flow more freely from the formation to the well and then to the surface.

There are three primary types of proppant that can be utilized in the hydraulic fracturing process: sand, resin coated sand and ceramic. Sand is the least expensive proppant, resin-coated sand is more expensive and ceramic proppant is typically the most expensive. The higher initial cost of ceramic proppant is justified by the fact that its use in certain well conditions results in an increase in the production rate of oil and natural gas, an increase in the total oil or natural gas that can be recovered from the well and, consequently, an increase in cash flow for the operators of the well. The increased production rates are primarily attributable to the higher strength and more uniform size and shape of ceramic proppant versus alternative materials. We are one of the world’s largest suppliers of ceramic proppant.

Through our wholly-owned subsidiary StrataGen, Inc., our oilfield technologies and services segment also promotes increased production and EUR of oil and natural gas by selling a widely used fracture stimulation software under the brand FracPro®, and providing fracture design and consulting services to oil and natural gas E&P companies under the brand StrataGen.

FracPro® provides a suite of stimulation software solutions used for designing fracture treatments and for on-site real-time analysis. Use of FracPro has enabled our clients to recognize and remedy potential stimulation problems. FracPro has been integrated with third-party reservoir simulation software, furthering its reach and utility.

Our specialized consulting team operating under the name “StrataGen” works with operators around the world to help optimize well placement, fracture treatment design and production enhancement. The broad range of expertise of the StrataGen consultants includes: fracture treatment design; completion support; on-site treatment supervision; quality control; post-treatment evaluation and optimization; reservoir and fracture studies; rock mechanics and software application and training.

Our industrial technology products are produced at the same manufacturing facilities that produce ceramic proppant. We produce and sell ceramic pellets for use in various industrial technology applications, including but not limited to casting and milling.

We also have begun plant trials at our manufacturing facilities to produce products other than base ceramic proppant. Those mineral processing plant trials have proven successful and have led to increased revenue generation. We continue to develop additional opportunities within the industrial, agricultural and oil and gas industries to reduce our slowing and idling costs.

Our environmental products and services segment is intended to protect operators’ assets, minimize environmental risks, and lower lease operating expense (“LOE”). Asset Guard Products Inc. (“AGPI”), the only subsidiary of ours to operate in this segment, provides spill prevention, containment and countermeasure systems for the oil and gas industry. AGPI uses proprietary technology to make products designed to enable its clients to extend the life of their storage assets, reduce the potential for hydrocarbon spills and provide containment of stored materials. AGPI was formerly known as Falcon Technologies and Services, Inc.

Industry Conditions

During the three months ended June 30, 2017, the average price of West Texas Intermediate (“WTI”) crude oil increased 6% to $48.24 per barrel compared to $45.41 per barrel during the same period in 2016. The average North American rig count increased 115% during the three months ended June 30, 2017 to 1,007 rigs compared to 469 rigs during the same period in 2016. Although commodity prices have shown increases in the last year, they remain at significantly lower levels than prior to the severe industry downturn that began in late 2014, which has not encouraged a broad move away from low-cost completions. E&P operators that are existing or target customers of ours continued to use more raw frac sand than ceramic or resin-coated proppants as a percentage of overall proppant consumption during the three months ended June 30, 2017. We expect this trend to continue as our customers are under increasing pressure to consider lower up-front cost alternatives in the current commodity price environment, notwithstanding the superior performance results of our ceramic products. These events, along with an oversupplied ceramic proppant market that is

liquidating imported inventory, and low oil and natural gas prices, kept demand and average prices low for our proppants during the three months ende d June 30, 2017.

Generally, demand for most of our products and services depends primarily upon the supply of and demand for natural gas and oil and on the number of natural gas and oil wells drilled, completed or re-completed worldwide. More specifically, the demand for most of our products and services is dependent on the number of oil and natural gas wells that are hydraulically fractured to stimulate production. Because the demand for these products and services is also dependent on the commodity price of oil and natural gas, lower commodity prices result in fewer of our premium products being purchased. In addition to rig counts and commodity prices, our results of operations are also significantly affected by a host of other factors, including but not limited to (a) well completions activity, which is not necessarily correlated with rig count, (b) customer preferences, (c) new product and technology adoption (including of our KRYPTOSPHERE, CARBOAIR and SCALEGUARD technologies), (d) imports and competition, (e) changes in the product mix of what we sell, (f) costs of developing our products and services and running our business, and (g) changes in our strategy and execution. Current demand for proppant is extremely dynamic, but even if rig count and commodity prices remain constant, our business results are also highly dependent on these additional factors.

Critical Accounting Policies

The consolidated financial statements are prepared in accordance with U.S. GAAP, which require us to make estimates and assumptions (see Note 1 to the consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2016). We believe that some of our accounting policies involve a higher degree of judgment and complexity than others. As of December 31, 2016, our critical accounting policies included revenue recognition, estimating the recoverability of accounts receivable, inventory valuation, accounting for income taxes, accounting for long-lived assets, accounting for derivative instruments, and accounting for abnormally low production levels. These critical accounting policies are discussed more fully in our annual report on Form 10-K for the year ended December 31, 2016.

There have been no changes in our evaluation of our critical accounting policies since December 31, 2016.

Results of Operations

Three Months Ended June 30, 2017

Revenues . Oilfield technologies and services segment revenues of $37.2 million for the three months ended June 30, 2017 increased 110% compared to $17.7 million for the same period in 2016. The increase was mainly attributable to an increase in frac sand sales, technology product sales, in addition to an increase in base ceramic product sales. We also saw revenue increases from our consulting and software businesses. Our worldwide product sales volumes and average selling price per pound in the three months ended June 30, 2017 compared to the same period in 2016 were as follows:

	Three months ended
Product Sales	June 30,
(Volumes in million lbs)	2017				2016
	Volumes		Average Price / lb		Volumes		Average Price / lb
Ceramic		96	$	0.25		71	$	0.22
Northern White Sand		496		0.02		41		0.02
Total		592	$	0.06		112	$	0.15

North American (defined as Canada and U.S.) ceramic proppant sales volume increased 50% in the three months ended June 30, 2017 compared to the same period in 2016, primarily due to higher sales of technology products and base ceramic products. International (excluding Canada) ceramic proppant sales volumes increased 15%.

Primarily due to the change in product mix, the average selling price per pound of all proppant sold by us was $0.06 during the three months ended June 30, 2017 compared to $0.15 for the same period in 2016.

Environmental products and services segment revenues of $6.4 million for the three months ended June 30, 2017 increased 114% compared to $3.0 million in the same period in 2016. The increase was mainly attributable to an increase in oil and natural gas industry activity.

Gross Loss. Oilfield technologies and services segment gross loss for the three months ended June 30, 2017 was $14.4 million, or 39% of revenues, compared to gross loss of $19.8 million, or 112% of revenues, for the same period in 2016. Gross loss improved primarily due to an increase in oil and natural gas industry activity and the resulting increases in our revenues combined with the Company’s initiative to reduce our cost base and utilize our idled assets.

Environmental products and services segment gross profit for the three months ended June 30, 2017 was $1.0 million compared to gross loss of $0.2 million for the same period in 2016. This $1.2 mil lion improvement was largely due to a shift in the segment’s revenue mix towards more profitable product sales combined with an increase in oil and natural gas industry activity.

Consolidated cost of sales for the three months ended June 30, 2017 and 2016 included the following:

	Three months ended
	June 30,
(In thousands)	2017		2016
Primary cost of sales	$	45,896	$	28,489
Slowing and idling production		10,797		13,515
Loss (gain) on derivative instruments		309		(824	)
Other charges (gains)		3		(517	)
Total Cost of Sales	$	57,005	$	40,663

Selling, General and Administrative (SG&A) and Other Operating Expenses. Oilfield technologies and services segment SG&A totaled $9.4 million for the three months ended June 30, 2017 compared to $9.2 million for the same period in 2016.

Environmental products and services segment SG&A was flat at $0.8 million for the three months ended June 30, 2017 and 2016.

Income Taxes. Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, provides the carrying value of deferred tax assets should be reduced by the amount not expected to be realized. A company should reduce deferred tax assets by a valuation allowance if, based on the weight of all available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. ASC 740 requires all available evidence, both positive and negative, be considered to determine whether a valuation allowance for deferred tax assets is needed in the financial statements. Additionally there can be statutory limitations and losses also assessed on the deferred tax assets should certain conditions arise. As a result of the significant decline in oil and gas activities and net losses incurred over the past several quarters, we determined during the three months ended March 31, 2017 that it was more likely than not that a portion of our deferred tax assets will not be realized in the future. Our valuation allowance against a portion of our deferred taxes as of June 30, 2017 was $19.7 million. Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities. As a result, income tax benefit was $0.5 million, or 2.0% of pretax loss, for the three months ended June 30, 2017 compared to income tax benefit of $11.3 million, or 35.8% of pretax loss, for the same period in 2016.

Six Months Ended June 30, 2017

Revenues . Oilfield technologies and services segment revenues of $66.8 million for the six months ended June 30, 2017 increased 42% compared to $47.1 million for the same period in 2016. The increase was mainly attributable to an increase in technology product sales and an increase in frac sand sales. These increases were partially offset by decreases in base ceramic proppant sales. Our worldwide product sales volumes and average selling price per pound in the six months ended June 30, 2017 compared to the same period in 2016 were as follows:

	Six months ended
Product Sales	June 30,
(Volumes in million lbs)	2017				2016
	Volumes		Average Price / lb		Volumes		Average Price / lb
Ceramic		178	$	0.25		191	$	0.22
Northern White Sand		866		0.02		116		0.02
Total		1,044	$	0.06		307	$	0.15

North American (defined as Canada and U.S.) ceramic proppant sales volume decreased 8% in the six months ended June 30, 2017 compared to the same period in 2016, primarily due to lower sales of base ceramic proppant, partially offset by higher sales of technology products. International (excluding Canada) ceramic proppant sales volumes decreased 5%.

Primarily due to the change in product mix, the average selling price per pound of all proppant sold by us was $0.06 during the six months ended June 30, 2017 compared to $0.15 for the same period in 2016.

Environmental products and services segment revenues of $11.4 million for the six months ended June 30, 2017 increased 71% compared to $6.7 million in the same period in 2016. The increase was mainly attributable to an increase in oil and natural gas industry activity.

Gross Loss. Oilfield technologies and services segment gross loss for the six months ended June 30, 2017 was $34.3 million, or 51% of revenues, compared to gross loss of 43.4 million, or 92% of revenues, for the same period in 2016. Gross loss improved primarily due to an increase in oil and natural gas industry activity and the resulting increases in our revenues combined with the Company’s initiative to reduce our cost base and utilize our idled assets. In addition, the Company did not incur severance costs during the six months ended June 30, 2017 compared to $6.2 million of severance for the same period in 2016.

Environmental products and services segment gross profit for the six months ended June 30, 2017 was $1.4 million compared to gross loss of $0.3 million for the same period in 2016. This $1.7 million improvement was largely due to a shift in the segment’s revenue mix towards more profitable product sales combined with an increase in oil and natural gas industry activity.

Consolidated cost of sales for the six months ended June 30, 2017 and 2016 included the following:

	Six months ended
	June 30,
(In thousands)	2017		2016
Primary cost of sales	$	87,921	$	68,610
Slowing and idling production		22,009		23,222
Loss (gain) on derivative instruments		1,200		(597	)
Other charges		3		6,171
Total Cost of Sales	$	111,133	$	97,406

Selling, General and Administrative (SG&A) and Other Operating Expenses. Oilfield technologies and services segment SG&A totaled $19.4 million for the six months ended June 30, 2017 compared to $19.9 million for the same period in 2016 due to the continued focus on cash preservation.

Environmental products and services segment SG&A was flat at $1.6 million for the six months ended June 30, 2017 and 2016.

Consolidated other operating expense was $0 and $0.9 million for the six months ended June 30, 2017 and 2016, respectively. Other operating expense in 2016 was primarily related to a $1.1 million long-term bauxite impairment partially offset by gains on asset sales.

Income Taxes. Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, provides the carrying value of deferred tax assets should be reduced by the amount not expected to be realized. A company should reduce deferred tax assets by a valuation allowance if, based on the weight of all available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. ASC 740 requires all available evidence, both positive and negative, be considered to determine whether a valuation allowance for deferred tax assets is needed in the financial statements. Additionally there can be statutory limitations and losses also assessed on the deferred tax assets should certain conditions arise. As a result of the significant decline in oil and gas activities and net losses incurred over the past several quarters, we determined during the three months ended March 31, 2017 that it was more likely than not that a portion of our deferred tax assets will not be realized in the future. Our valuation allowance against a portion of our deferred taxes as of June 30, 2017 was $19.7 million. Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities. As a result, income tax benefit was $0.2 million, or 0.4% of pretax loss, for the six months ended June 30, 2017 compared to income tax benefit of $23.4 million, or 34.3% of pretax loss, for the same period in 2016.

Outlook

We continue to execute on our strategy to drive both revenue growth and profitability improvement. The second quarter resulted in a 26% sequential revenue increase and strong sequential incremental operating margins. We anticipate technology products, industrial ceramic products and mineral processing opportunities to lead our revenue growth and return to profitability, and now believe our revenue growth in 2017 will be at least a 60% increase over 2016.

Although the commodity price environment remains tenuous in the oil and gas industry, we are optimistic about our oilfield business for the second half of 2017.

Technology product sales are tracking as expected and existing second half of 2017 opportunities are strong compared to the first half of 2017. KRYPTOSPHERE HD continues to see success in deep wells, specifically the Lower Tertiary Gulf of Mexico, where all super majors have now selected the product for use. Currently, there are several wells slated for completion with KRYPTOSPHERE HD in the second half of 2017. Additional technologies, such as SCALEGUARD, continue to grow as well.

We expect the base ceramic business to see higher volumes in the second half as compared to the first half of 2017. We are focused on improving the pricing. We have had modest price increases in base cerami c over the last couple of quarters, and we expect this trend to continue as the industry should move from an inventory liquidation mode, into a mode of increased pricing to produce profit on manufactured proppant. We believe the negative returns throughou t the base ceramic industry should lead to increased industry pricing moving forward, given the basic logic that companies want to provide a positive economic return on business.

The frac sand business has grown substantially this year and is part of delivering a complete suite of product offerings to our oil and gas clients. Given the strong demand for frac sand, we ramped to full utilization at our Marshfield, Wisconsin sand plant during the second quarter of 2017. We anticipate similar levels of sand sales in the third quarter of 2017 as compared to the second quarter of 2017. In addition to increased sand volumes, we are also benefiting from rail car revenue generated from leased rail cars dedicated to this business.

We believe the work completed in the second quarter of 2017, to solidify our industrial product offering and increase our sales channels, will allow us to continue to grow industrial products and services in the second half of 2017. Our current product suite, including new products we are introducing in the industrial arena, should allow us to grow this business over the long-term.

We believe AssetGuard, our environmental business, will generally follow industry activity in the second half of 2017. Industrial product sales continue to be identified as we focus resources on growing this business.

Given the sequential improvement in EBITDA in the second quarter of 2017, our expected revenue increases and benefits from fixed cost reductions, we believe our second half of 2017 cash burn and EBITDA should improve.

We are focused on returning CARBO to profitability, and believe our strategy to reduce reliance on any single business line will make us a stronger company in the future.

In July 2017, we entered into a Share Purchase Agreement to sell our Russian proppant business for $22 million. The transaction is subject to local regulatory approval and is expected to close during the third quarter of 2017. In addition, we continue to explore certain asset monetization opportunities to further strengthen the balance sheet.

Liquidity and Capital Resources

At June 30, 2017, we had cash and cash equivalents and restricted cash of $50.6 million compared to cash and cash equivalents and restricted cash of $91.7 million at December 31, 2016. During the six months ended June 30, 2017, we generated $0.2 million from the effect of exchange rate changes on cash. Uses of cash included $34.9 million used in operating activities, $3.3 million in repayments on our long-term debt, $1.2 million for capital expenditures, $0.9 million for payments of debt issuance costs, $0.5 million for purchases of our common stock, and $0.5 million in repayments on notes payable. In July 2017, we satisfied certain post-closing conditions relating to the New Credit Agreement, and as a result, we received proceeds from long-term debt of $12.3 million. In July 2017, we entered into a Share Purchase Agreement to sell our Russian proppant business for $22 million. The transaction is subject to local regulatory approval and is expected to close during the third quarter of 2017.

On January 19, 2016, our Board of Directors suspended our policy of paying quarterly cash dividends. We estimate that our total capital expenditures for the remainder of 2017 will be less than $2.0 million. Due to market conditions, the completion of the second line at the manufacturing facility in Millen, Georgia and the second phase of a plant retrofit with KRYPTOSPHERE® technology have been suspended until such time that market conditions warrant completion.

We anticipate that cash on hand will be sufficient to meet planned operating expenses and other cash needs for at least one year from the date of this Form 10-Q. Our view regarding sufficiency of cash and liquidity is primarily based on our financial forecast for 2017 and 2018, which is impacted by various assumptions regarding demand and sales prices for our products. Generally, we expect demand for our products and the sales prices to increase in the remainder of 2017 and 2018 compared to 2016. Although we have observed certain factors in the first half of 2017 that could be indicative of improving industry conditions, our financial forecasts are based on estimates of customer demand, which is highly volatile in the current operating environment, and we have no committed sales backlog with our customers. As a result, there is inherent uncertainty in our forecasts.

Off-Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of June 30, 2017.

Forward-Looking Information

The statements in this Quarterly Report on Form 10-Q that are not historical statements, including statements regarding our future financial and operating performance and liquidity and capital resources, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may”, “will”, “estimate”, “intend”, “continue”, “believe”, “expect”, “anticipate”, “should”, “could”, “potential”, “opportunity”, or other similar terminology. All forward-looking statements are based on management's current expectations and estimates, which involve risks and uncertainties that could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are:

•

changes in the cost of raw materials and natural gas used in manufacturing our products;

•

risks related to our ability to access needed cash and capital;

•

our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants;

•

our ability to manage distribution costs effectively;

•

our ability to successfully implement strategic changes in our business;

•

changes in demand and prices charged for our products;

•

technological, manufacturing and product development risks;

•

our dependence on and loss of key customers and end users;

•

potential declines or increased volatility in oil and natural gas prices that adversely affect our customers, the energy industry or our production costs;

•

potential reductions in spending on exploration and development drilling in the oil and natural gas industry that reduce demand for our products and services;

•

seasonal sales fluctuations;

•

an increase in competition in the proppant market, including imports from foreign countries;

•

logistical and distribution challenges relating to certain resource plays that do not have the type of infrastructure systems that are needed to efficiently support oilfield services activities;

•

the development of alternative stimulation techniques that would not benefit from the use of our existing products and services, such as extraction of oil or gas without fracturing;

•

changes in foreign and domestic governmental regulations, including environmental restrictions on operations and regulation of hydraulic fracturing;

•

increased regulation of emissions from our manufacturing facilities;

•

the development and utilization of alternative proppants for use in hydraulic fracturing;

•

general global economic and business conditions;

•

weather-related risks and other risks and uncertainties;

•

changes in foreign and domestic political and legislative risks;

•

risks of war and international and domestic terrorism;

•

risks associated with foreign operations and foreign currency exchange rates and controls; and

•

the potential expropriation of assets by foreign governments.

Additional factors that could affect our future results or events are described from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”). Please see the discussion set forth under the caption “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2016, under the caption “Risk Factors” in this report, and similar disclosures in subsequently filed reports with the SEC. We assume no obligation to update forward-looking statements, except as required by law.

ITEM 3.

QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk through foreign currency fluctuations that could impact our investments in Russia. As of June 30, 2017, our net investments subject to foreign currency fluctuations totaled $15.6 million and we had recorded cumulative foreign currency translation loss of $33.6 million, all related to the Russian Ruble. This cumulative translation loss is included in Accumulated Other Comprehensive Loss. From time to time, we may enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. There were no such foreign exchange contracts outstanding at June 30, 2017. No income tax benefits have been recorded on these losses as a result of the uncertainty about recoverability of the related deferred income tax benefits.

We are also exposed to market risk in the price of natural gas, which is used in production by our domestic manufacturing facilities and is subject to volatility. In an effort to mitigate potential volatility in the cost of natural gas purchases and reduce exposure to short-term spikes in the price of the commodity, from time to time, we enter into contracts to purchase a portion of our anticipated monthly natural gas requirements at specified prices. At June 30, 2017, we had contracted for a total of 3,060,000 MMBtu of natural gas at an average price of $4.37 per MMBtu through December 31, 2018.

ITEM 4.

CONTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of June 30, 2017, management had carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurances of achieving their control objectives. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)	Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2017 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHE R INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We are subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, we do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A.

RISK FACTORS

There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2016 except as follows. The risk factors below update the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2016:

We may not have sufficient cash and/or be able to access liquidity alternatives in the credit and capital markets to meet our liquidity needs.

Our primary sources of liquidity are cash on hand and cash flow from operations. Our ability to fund our working capital and capital expenditures and other obligations depends on our future operating performance and cash from operations and other liquidity-generating transactions, which are in turn subject to prevailing oil and natural gas prices, economic conditions and other factors, many of which are beyond our control.

If our future operating performance falls materially below our expectations, our plans prove to be materially inaccurate, or industry conditions do not materially improve, we may require additional financing. Even if additional or alternative financing becomes available to us, future financing transactions may significantly increase the Company’s interest expense, which could in turn reduce our financial flexibility and our ability to fund other activities and could make us more vulnerable to changes in operating performance or economic downturns generally. The inability to generate sufficient cash, modify our New Credit Agreement, or obtain replacement or additional financing, or an event of default under our New Credit Agreement, could have a material adverse effect on our financial condition.

We therefore cannot provide any assurance that we will be able to access the capital or credit markets on acceptable terms or timing, or at all. Access to the capital markets and the cost and availability of credit may be adversely affected by factors beyond our control, including turmoil in the financial services industry, volatility in securities trading markets, the continuing downturn in the oil and gas industry and general economic conditions. Currently, we no longer qualify as a “well-known seasoned issuer,” which previously enabled us to, among other things, file automatically effective shelf registration statements. Now, even if we are able to access the public capital markets, any attempt to do so could be more expensive or subject to significant delays when compared with previous periods.

The outstanding indebtedness under our New Credit Agreement is secured by a substantial portion of our domestic assets and guaranteed by our two domestic operating subsidiaries, subject to certain exceptions.

The outstanding indebtedness under our New Credit Agreement is secured by (i) a pledge of all accounts receivable and inventory, (ii) cash in certain accounts, (iii) domestic distribution assets residing on owned real property, (iv) our Marshfield, Wisconsin and Toomsboro, Georgia plant facilities and equipment, and (v) certain real property interests in mines and minerals. In the event of a default, our lenders may (1) elect to declare all outstanding borrowings made under the New Credit Agreement and the guaranties of the two operating subsidiaries, together with accrued interest and other fees, to be immediately due and payable; (2) exercise their set-off rights; and/or (3) enforce and foreclose on their security interest and liquidate some or all of such pledged assets. Any of these actions could, individually or in the aggregate, have a substantial negative impact on our financial condition and results of operations.

ITEM 2.

UNREGISTERED SALES OF EQUI TY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchases of Common Stock during the quarter ended June 30, 2017:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan ⁽¹⁾		Maximum Number of Shares that May be Purchased Under the Plan ⁽¹⁾
04/01/17 to 04/30/17		—			—		—		2,000,000
05/01/17 to 05/31/17		—			—		—		2,000,000
06/01/17 to 06/30/17		1,923		$	7.87		—		2,000,000
Total		1,923	⁽²⁾				—

(1)

On January 28, 2015, we announced the authorization by our Board of Directors for the repurchase of up to two million shares of our Common Stock. The Plan is effective until all shares have been purchased under the Plan, or until such date that our Board of Directors cancels the Plan. No shares have been purchased under the Plan.

(2)	Represents shares of stock withheld for the payment of withholding taxes upon the vesting of restricted stock.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.

MINE SAFETY DISCLOSURE

Our U.S. manufacturing facilities process mined minerals, and therefore are viewed as mine operations subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the recently proposed Item 106 of Regulation S-K (17 CFR 229.106) is included in Exhibit 95 to this quarterly report.

ITEM 5.

OTHER INFORMATION

On July 21, 2017, subsidiaries of the Company Carbo Ceramics (Mauritius) Inc. and Carbo LLC (together, the “Sellers”) entered into a Share Purchase Agreement with Petro Welt Technologies AG and PeWeTe Evolution Limited (together, the “Purchasers”) to sell the Company’s Russian proppant business.

Under the Terms of the Share Purchase Agreement, the Purchasers will pay an aggregate purchase price of $22,000,000 (subject to certain net working capital and net debt purchase price adjustments) for all of the shares of CARBO Ceramics Cyprus Limited held by the Sellers. The Share Purchase Agreement contains certain customary warranties (the “Warranties”) and certain customary covenants. The Share Purchase Agreement also provides that the Sellers’ liability to the Purchasers for losses stemming from breaches of the Sellers’ Warranties will be capped at certain agreed levels and in no case more than the purchase price, and subject to a minimum deductible.

The transaction is subject to customary local regulatory approval and satisfaction of other customary closing conditions and is expected to close during the third quarter of 2017.

The foregoing description of the Share Purchase Agreement and the transactions contemplated does not purport to be complete and is qualified in its entirety by reference to the Share Purchase Agreement itself.

ITEM 6.

E XHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:

10.1		Amended and Restated 2014 CARBO Ceramics Inc. Omnibus Incentive Plan

10.2		Share Purchase Agreement between CARBO Ceramics (Mauritius) Inc. and CARBO LLC and Petro Welt Technologies AG and PeWeTe Evolution Limited, dated as of July 21 2017. *

31.1		Rule 13a-14(a)/15d-14(a) Certification by Gary A. Kolstad

31.2		Rule 13a-14(a)/15d-14(a) Certification by Ernesto Bautista III

32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95		Mine Safety Disclosure

101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, formatted in XBRL: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Loss; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements.

* The schedules and Exhibit A to the Share Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

SIGNAT URES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CARBO CERAMICS INC.

		/s/ G ary A. Kolstad
		Gary A. Kolstad
		President and Chief Executive Officer

		/s/ Ernesto Bautista III
		Ernesto Bautista III
		Chief Financial Officer

	Date: July 27, 2017

EXHIBIT INDEX


EXHIBIT		DESCRIPTION

10.1		Amended and Restated 2014 CARBO Ceramics Inc. Omnibus Incentive Plan

10.2		Share Purchase Agreement between CARBO Ceramics (Mauritius) Inc. and CARBO LLC and Petro Welt Technologies AG and PeWeTe Evolution Limited, dated as of July 21 2017. *

31.1		Rule 13a-14(a)/15d-14(a) Certification by Gary A. Kolstad.

31.2		Rule 13a-14(a)/15d-14(a) Certification by Ernesto Bautista III.

32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95		Mine Safety Disclosure.

101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, formatted in XBRL: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Loss; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements.

Exhibit 10.1

AMENDED AND RESTATED 2014 CARBO CERAMICS INC. OMNIBUS INCENTIVE PLAN

1.	Purpose of the Plan

This 2014 CARBO Ceramics Inc. Omnibus Incentive Plan is intended to promote the interests of the Company and its stockholders by providing the key employees of the Company, and eligible non-employee directors of CARBO Ceramics, with incentives and rewards to encourage them to continue in the service of the Company. The Plan is designed to serve this goal by providing such employees and eligible non-employee directors with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company.

2.	Definitions

As used in the Plan or in any instrument governing the terms of any Award, the following definitions apply to the terms indicated below:

(a) “Award” means an Option or Other Award granted pursuant to the terms of the plan.

(b) “Board” means the Board of Directors of CARBO Ceramics.

(d) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

(e) “Committee” means the Compensation Committee of CARBO Ceramics or such other committee appointed by the Board from time to time to administer the Plan (and to otherwise exercise and perform the authority and functions assigned to the Committee under the terms of the Plan) that meets the criteria set forth in Section 4 of the Plan.

(f) “Common Stock” means the common stock of CARBO Ceramics, par value

$0.01 per share, or any other security into which such common stock shall be changed pursuant to the adjustment provisions of Section 10 of the Plan.

(g) “Company” means CARBO Ceramics, together with its Subsidiaries.

(h) “Covered Employee” means a Participant who at the time of reference is a “covered employee” as defined in Section 162(m) of the Code.

(i) “Director” means a member of the Board who is not at the time of reference an employee of the Company.

(j) “Disability” shall mean any physical or mental impairment which qualifies a Participant for (i) disability benefits under any long-term disability plan maintained by the Company, (ii) workers’ compensation total disability benefits or (iii) Social Security disability benefits, or as otherwise determined by the Board. For purposes of this Plan, a Participant’s employment shall be deemed to have terminated as a result of Disability on the

date as of which he or she is first entitled to receive disability benefits under such policy, law or regulation; provided that with respect to any Award that is subject to Section 409A of the Code, if such Award provides for any payment or distribution upon a Participant’s (i) Disability, then “Disability” shall have the meaning given to such term in Section 1.409A-3(i)(4) of the Treasury Regulations or (ii) termination of employment as a result of Disability, then such Participant’s employment shall be deemed to have terminated as a result of Disability on the date on which such Participant experiences a Separation from Service.

(k) “Effective Date” means the date on which the Plan is approved by the stockholders of CARBO Ceramics.

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

(m) “Fair Market Value” means, with respect to a share of Common Stock, as of the applicable date of determination, (i) the closing price of a share of Common Stock, as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading, on the date of determination (or, if not reported on such date, on the next preceding date on which such price was reported) or (ii) if the Common Stock is not listed or admitted to trading on any securities exchange, the fair market value of a share of Common Stock as reasonably determined by the Committee in its sole discretion using a reasonable valuation method.

(n) “Option” means a stock option to purchase shares of Common Stock granted to a Participant pursuant to Section 6.

(o) “Other Award” means an award granted to a Participant pursuant to Section 7.

(p) “Participant” means a Director or employee of the Company who is eligible to participate in the Plan and to whom one or more Awards have been granted pursuant to the Plan and, following the death of any such Person, his successors, heirs, executors and administrators, as the case may be.

(q) “Performance-Based Compensation” means compensation that satisfies the requirements of Section 162(m) of the Code for deductibility of remuneration paid to Covered Employees.

(r) “Performance Measures” means such measures as are described in Section 8 on which Performance Targets are based in order to qualify certain awards granted hereunder as Performance-Based Compensation.

(s) “Performance Percentage” means the factor determined pursuant to a Performance Schedule that is to be applied to a Target Award and that reflects actual performance compared to the Performance Target.

(t) “Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award that is intended to qualify as Performance-Based Compensation. Performance Periods may be overlapping.

(u) “Performance Schedule” means a schedule or other objective method for determining the applicable Performance Percentage to be applied to each Target Award.

(v) “Performance Target” means performance goals and objectives with respect to Performance Measures for a Performance Period.

(w) “Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act, including any “group” within the meaning of Section 13(d)(3) under the Exchange Act.

(x) “Plan” means this 2014 CARBO Ceramics Inc. Omnibus Incentive Plan, as it may be amended from time to time.

(y) “Securities Act” means the Securities Act of 1933, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.

(z) “Separation from Service” shall have the meaning set forth in Section 1.409A- 1(h) of the Treasury Regulations.

(aa) “Specified Employee” shall have meaning set forth in Section 1.409A-1(i) of the Treasury Regulations.

(bb) “Subsidiary” shall mean any entity that is directly or indirectly controlled by CARBO Ceramics or any entity, including an acquired entity, in which CARBO Ceramics has a significant equity interest, as determined by the Committee in its sole discretion, provided that with respect to any Award that is subject to Section 409A of the Code, “Subsidiary” shall mean a corporation or other entity in a chain of corporations or other entities in which each corporation or other entity, starting with CARBO Ceramics, has a controlling interest in another corporation or other entity in the chain, ending with such corporation or other entity. For purposes of the preceding sentence, the term “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations, provided that the language “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations. Notwithstanding the foregoing, for the purpose of determining whether a corporation or other entity is a Subsidiary for purposes of Section 5(a) hereof, if the Awards proposed to be granted to employees of such corporation or other entity would be granted based upon legitimate business criteria, the term “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations, provided that the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Code Section 1.414(c)-2(b)(2)(i). For purposes of determining ownership of an interest in an organization, the rules of Sections 1.414(c)-3 and 1.414(c)-4 of the Treasury Regulations apply.

(cc) “Target Award” means a target Award determined by the Committee to be payable upon satisfaction of any applicable Performance Targets.

(dd) “Treasury Regulations” shall mean the regulations promulgated under the Code by the United States Internal Revenue Service, as amended.

(ee) “Voting Securities” means, at any time, CARBO Ceramics’ then outstanding voting securities.

3.	Stock Subject to the Plan and Limitations on Awards

(a)

Stock Subject to the Plan

The maximum number of shares of Common Stock that may be covered by Awards granted under the Plan shall not exceed 1,450,000 shares of Common Stock in the aggregate. The maximum number of shares of Common Stock that may be issued through Options designated as “incentive stock options” within the meaning of Section 422 of the Code under the Plan shall not exceed 1,450,000 shares of Common Stock in the aggregate. The shares referred to in the preceding sentences of this paragraph shall in each case be subject to adjustment as provided in Section 10 and the following provisions of this Section 3. Shares of Common Stock issued under the Plan may be either authorized and unissued shares or treasury shares, or both, at the sole discretion of the Committee.

For purposes of the preceding paragraph, shares of Common Stock covered by Awards shall only be counted as used to the extent they are actually issued and delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. For purposes of clarification, in accordance with the preceding sentence, if an Award is settled for cash or if shares of Common Stock are withheld to pay the exercise price of an Option or to satisfy any tax withholding requirement in connection with an Award, only the shares issued (if any), net of the shares withheld, will be deemed delivered for purposes of determining the number of shares of Common Stock that are available for delivery under the Plan. In addition, if shares of Common Stock are issued subject to conditions which may result in the forfeiture, cancellation or return of such shares to the Company, any portion of the shares forfeited, cancelled or returned shall be treated as not issued pursuant to the Plan. In addition, if shares of Common Stock owned by a Participant (or such Participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the Company in payment of any obligation in connection with an Award, the number of shares tendered shall be added to the number of shares of Common Stock that are available for delivery under the Plan. Shares of Common Stock covered by Awards granted pursuant to the Plan in connection with the assumption, replacement, conversion or adjustment of outstanding equity-based awards in the context of a corporate acquisition or merger (within the meaning of Section 303A.08 of the New York Stock Exchange Listed Company Manual) shall not count as used under the Plan for purposes of this Section 3(a).

(b)

Individual Award Limits

Subject to adjustment as provided in Section 10, the maximum number of shares of Common Stock that may be covered by Awards granted under the Plan to any single Participant in any calendar year shall not exceed 100,000 shares. The amount paid under the Plan to any single Participant in any calendar year with respect to any cash-based Award shall not exceed $5,000,000.

4.	Administration of the Plan

The Plan shall be administered by a committee of the Board of Directors consisting of two or more persons, each of whom qualifies as a “non-employee director” (within the meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act), an “outside director” within the meaning of Treasury Regulation Section 1.162-27(e)(3) and as “independent” within the meaning of any applicable stock exchange or similar regulatory authority. The Committee shall, consistent with the terms of the Plan, from time to time designate those employees and Directors of the Company who shall be granted Awards under the Plan and the amount, type and other terms and conditions of such Awards. All of the powers and responsibilities of the Committee under the Plan may be delegated by the Committee, in writing, to any subcommittee thereof. In addition, the Committee may from time to time authorize a subcommittee consisting of one or more members of the Board (including members who are employees of the Company) or officers of CARBO Ceramics to grant Awards to persons who are not “executive officers” of CARBO Ceramics (within the meaning of Rule 16a-1 under the Exchange Act), subject to such restrictions and limitation as the Committee may specify and in accordance with (and only to the extent permitted by) Section 157 of the Delaware General Corporation Law.

The Committee shall have full discretionary authority to administer the Plan, including discretionary authority to interpret and construe any and all provisions of the Plan and the terms of any Award (and any agreement evidencing any Award) granted hereunder and to adopt and amend from time to time such rules and regulations for the administration of the Plan as the Committee may deem necessary or appropriate. Without limiting the generality of the foregoing, the Committee shall determine whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment and whether employment for any Person other than the Company shall constitute employment for any purposes of the Plan. The employment of a Participant with the Company shall be deemed to have terminated for all purposes of the Plan if such person is employed by or provides services to a Person that is a Subsidiary of CARBO Ceramics and such entity ceases to be a Subsidiary of CARBO Ceramics, unless the Committee determines otherwise. Decisions of the Committee shall be final, binding and conclusive on all parties.

On or after the date of grant of an Award under the Plan, the Committee may, subject to applicable law and the limitations and requirements set forth herein, (i) accelerate the date on which any such Award becomes vested, exercisable or transferable, as the case may be, (ii) extend the term of any such Award, including, without limitation, extending the period following a termination of a Participant’s employment during which any such Award may remain outstanding, (iii) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such Award or (iv) provide for the payment of dividends or dividend equivalents with respect to any such Award; provided , that the Committee shall not have any such authority to the extent that the grant of such authority would cause any tax to become due under Section 409A of the Code.

No member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such

member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company.

5.	Eligibility

(a) The Persons who shall be eligible to receive Awards pursuant to the Plan shall be those employees and Directors of the Company whom the Committee shall select from time to time, including those key employees (including officers of CARBO Ceramics, whether or not they are members of the Board) who are largely responsible for the management, growth and protection of the business of the Company. With respect to employees subject to U.S. income tax, Options and stock appreciation rights shall only be granted to such employees who provide direct services to CARBO Ceramics or a Subsidiary of CARBO Ceramics as of the date of grant of the Option or stock appreciation right. Each Award granted under the Plan shall be evidenced by an instrument in writing in form and substance approved by the Committee.

(b) Employees of Subsidiaries may participate in the Plan upon approval of Awards to such employees by the Committee. A Subsidiary’s participation in the Plan may be conditioned upon the Subsidiary’s agreement to reimburse the Company for costs and expenses of such participation, as determined by the Company. The Committee may terminate the Subsidiary’s participation in the Plan at any time and for any reason. If a Subsidiary’s participation in the Plan shall terminate, such termination shall not relieve it of any obligations theretofore incurred by it under the Plan, except with the approval of the Committee, and the Committee shall determine, in its sole discretion, the extent to which employees of the Subsidiary may continue to participate in the Plan with respect to previously granted Awards. Unless the Committee determines otherwise, a Subsidiary’s participation in the Plan shall terminate upon the occurrence of any event that results in such entity no longer constituting a Subsidiary as defined herein; provided, however, that such termination shall not relieve such Subsidiary of any of its obligations to the Company theretofore incurred by it under the Plan, except with the approval of the Committee. Notwithstanding the foregoing, unless otherwise specified by the Committee, upon any such Subsidiary ceasing to be a Subsidiary as defined herein, the Participants employed by such Subsidiary shall be deemed to have terminated employment for purposes of the Plan. With respect to Awards subject to Section 409A of the Code, for purposes of determining whether a distribution is due to a Participant, such Participant’s employment shall be deemed terminated as described in the preceding sentence only if the Committee determines that a Separation from Service has occurred.

Options

The Committee may from time to time grant Options, subject to the following terms and conditions:

(a)

Exercise Price

The exercise price per share of Common Stock covered by any Option shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date on which such Option is granted. The agreement evidencing the award of each Option shall clearly identify such Option as either an “incentive stock option” within the meaning of Section 422 of the Code or as a non-qualified stock option.

(b)

Term and Exercise of Options

(1) Each Option shall become vested and exercisable on such date or dates, during such period and for such number of shares of Common Stock as shall be determined by the Committee and specified in the agreement evidencing such Option; provided , however that no Option shall be exercisable after the expiration of ten years from the date such Option is granted; and, provided , further , that each Option shall be subject to earlier termination, expiration or cancellation as provided in the Plan or in the agreement evidencing such Option.

(2) Each Option may be exercised in whole or in part. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof.

(3) An Option shall be exercised by such methods and procedures as the Committee determines from time to time, including without limitation through net physical settlement or other method of cashless exercise.

(4) Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent and distribution and may be exercised, during the lifetime of a Participant, only by the Participant; provided , however that the Committee may (but shall not be obligated to) permit Options that are not incentive stock options to be sold, pledged, assigned, hypothecated, transferred, or disposed of, on a general or specific basis, subject to such conditions and limitations as the Committee may determine.

(c)

Effect of Termination of Employment or Other Relationship

The agreement evidencing the award of each Option shall specify the consequences with respect to such Option (if any) of the Participant’s termination of employment or service as a Director or other relationship between the Company and the Participant holding the Option, a leave of absence and the Participant’s death or Disability.

(d)

Special Rules for Incentive Stock Options

(1) The aggregate Fair Market Value of shares of Common Stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of CARBO Ceramics or any of its “subsidiaries” (within the meaning of Section 424 of the Code) shall not exceed $100,000. Such Fair Market Value shall be determined as of the date on which each such incentive stock option is granted. In the event that the aggregate Fair Market Value of shares of Common Stock with respect to such incentive stock options exceeds $100,000, then incentive stock options granted hereunder to such Participant shall, to the extent and in the order required by regulations promulgated under the Code (or any other authority having the force of regulations), automatically be deemed to be non-qualified stock options, but all other terms and provisions of such incentive stock options shall remain unchanged. In the absence of such regulations (and authority), or in the event such regulations (or authority) require or permit a designation of which Options shall cease to constitute incentive stock options, incentive stock options granted hereunder shall, to the extent of such excess and in the order in which they were granted, automatically be deemed to be non-qualified stock options, but all other terms and provisions of such incentive stock options shall remain unchanged.

(2) No incentive stock option may be granted to an individual if at the time of the proposed grant, such individual owns stock possessing more than ten percent of the total combined voting power of all classes of stock of CARBO Ceramics or any of its “subsidiaries” (within the meaning of Section 424 of the Code), unless (i) the exercise price of such incentive stock option is at least one hundred and ten percent of the Fair Market Value of a share of Common Stock at the time such incentive stock option is granted and (ii) such incentive stock option is not exercisable after the expiration of five years from the date such incentive stock option is granted.

7.	Other Awards

(a) The Committee may grant cash-based, equity-based or equity-related awards not otherwise described herein in such amounts and subject to such terms and conditions as the Committee shall determine. Without limiting the generality of the preceding sentence, each such Other Award may (i) involve the transfer of actual shares of Common Stock to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of shares of Common Stock, (ii) be subject to performance-based and/or service-based conditions, (iii) be in the form of cash, stock appreciation rights, phantom stock, restricted stock, restricted stock units, performance shares, deferred share units or share-denominated performance units, (iv) be designed to comply with applicable laws of jurisdictions other than the United States and (v) be designed to qualify as Performance-Based Compensation; provided , that each equity-based or equity-related Other Award shall be denominated in, or shall have a value determined by reference to, a number of shares of Common Stock that is specified (or will be determined using a formula that is specified) at the time of the grant of such Other Award. The exercise price per share of Common Stock covered by any stock appreciation right shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date on which such stock appreciation right is granted, and the compensation payable pursuant to any stock appreciation right shall not exceed the excess of the Fair Market Value of a share of Common Stock on the date on which such stock appreciation right is exercised over the exercise price.

(b) The agreement evidencing each Other Award shall specify the consequences with respect to such Award (if any) of the Participant’s termination of employment or service as a Director or other relationship between the Company and the Participant holding such Award, a leave of absence, and the Participant’s death or Disability.

(c) Notwithstanding any provision of this Plan to the contrary, and except as provided in this Section 7(c) and with respect to Performance-Based Compensation as described in Section 8 hereof, Awards shall not vest more rapidly than ratably over a three-year period; provided , however , that (i) to the extent permitted by Section 409A of the Code, the Committee may, in its sole discretion, provide for accelerated vesting of any such Award on account of a Participant’s retirement, death, Disability, leave of absence, termination of employment or any other similar event, (ii) to the extent permitted by Section 409A of the Code, the Committee may, in its sole discretion, provide for accelerated vesting of any such Award upon the achievement of performance criteria specified by the Committee, related to a period of performance of one year or more, and (iii) up to twenty percent (20%) of the shares of Common Stock reserved for issuance under the Plan may be granted subject to Awards with such other vesting requirements (if any) as the Committee may establish in its sole discretion (which number of shares shall not include any shares subject to Performance-Based Compensation Awards).

8.	Performance-Based Compensation

(a)

Calculation

The amount payable with respect to an Award that is intended to qualify as Performance- Based Compensation shall be determined in any manner permitted by Section 162(m) of the Code.

(b)

Discretionary Reduction

The Committee may, in its discretion, reduce or eliminate the amount payable to any Participant with respect to an Award that is intended to qualify as Performance-Based Compensation, based on such factors as the Committee may deem relevant, but the Committee may not increase any such amount above the amount established in accordance with the relevant Performance Schedule. For purposes of clarity, the Committee may exercise the discretion provided for by the foregoing sentence in a non-uniform manner among Participants.

(c)

Performance Measures

The Performance Targets upon which the payment or vesting of any Award (other than Options and stock appreciation rights) to a Covered Employee that is intended to qualify as Performance- Based Compensation depends shall relate to one or more of the following Performance Measures: (i) net income or operating net income (before or after taxes, interest, depreciation, amortization, and/or nonrecurring/unusual items), (ii) return on assets, return on capital, return on equity, return on economic capital, return on other measures of capital, return on sales or other financial criteria, (iii) revenue or net sales, (iv) gross profit or operating gross profit, (v) cash flow, (vi) productivity or efficiency ratios, (vii) share price or total stockholder return, (viii) earnings per share, (ix) budget and expense management, (x) customer and product measures, including market share, high value client growth, and customer growth, (xi) working capital turnover and targets, (xii) margins, (xiii) economic value added or other value added measurements, (xiv) sales volume or other sales performance criteria, (xv) goals related to the research, development, implementation or marketing of new products or business initiatives, and (xvi) safety record and/or performance, as determined by statistical or numerical calculations for safety matters, such as number of lost-time accidents or total recordable incidence rate (TRIR), in any such case (A) considered absolutely or relative to historic performance or relative to one or more other businesses and (B) determined for the Company or any business unit or division thereof.

Within 90 days after the beginning of a Performance Period, and in any case before 25% of the Performance Period has elapsed, the Committee shall establish (I) Performance Measures and Performance Targets for such Performance Period, (II) Target Awards for each Participant, and (III) Performance Schedules for such Performance Period.

The measurement of any Performance Measure(s) may exclude the impact of charges for restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles and as identified in the Company’s audited financial statements, including the notes thereto. Any Performance Measure(s) may be used to measure the performance of any Participant or group of Participants, or the Company or a Subsidiary as a whole or any business unit of the Company or any Subsidiary or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group

of comparator companies, or a published or special index that the Committee, in its sole discretion, deems appropriate.

Nothing in this Section 8 is intended to limit the Committee’s discretion to adopt conditions with respect to any Award that is not intended to qualify as Performance-Based Compensation that relate to performance other than the Performance Measures. In addition, the Committee may, subject to the terms of the Plan, amend previously granted Awards in a way that disqualifies them as Performance-Based Compensation.

In the event that the requirements of Section 162(m) of the Code and the regulations thereunder change to permit Committee discretion to alter the Performance Measures without obtaining stockholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining stockholder approval.

9.	Payments and Deferrals

(a) Payment of vested Awards may be in the form of cash, Common Stock or combinations thereof as the Committee shall determine, subject to such terms, conditions, restrictions and limitations as it may impose. The Committee may (i) postpone the exercise of Options or stock appreciation rights (but not beyond their expiration dates), (ii) require or permit Participants to elect to defer the receipt or issuance of shares of Common Stock pursuant to Awards or the settlement of Awards in cash under such rules and procedures as it may establish, in its discretion, from time to time, (iii) provide for deferred settlements of Awards including the payment or crediting of earnings on deferred amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in common share equivalents, (iv) stipulate in any agreement evidencing an Award, either at the time of grant or by subsequent amendment, that a payment or portion of a payment of an Award be delayed in the event that Section 162(m) of the Code (or any successor or similar provision of the Code) would disallow a tax deduction by the Company for all or a portion of such payment; provided , that the period of any such delay in payment shall be until the payment, or portion thereof, is tax deductible, or such earlier date as the Committee shall determine in its sole discretion. Notwithstanding the forgoing, with respect to any Award subject to Section 409A of the Code, the Committee shall not take any action described in the preceding sentence unless it determines that such action will not result in any adverse tax consequences for any Participant under Section 409A of the Code.

(b) If, pursuant to any Award granted under the Plan, a Participant is entitled to receive a payment on a specified date, such payment shall be deemed made as of such specified date if it is made (i) not earlier than 30 days before such specified date and (ii) not later than December 31 of the year in which such specified date occurs or, if later, the fifteenth day of the third month following such specified date, in each case provided that the Participant shall not be permitted, directly or indirectly, to designate the taxable year in which such payment is made.

(c) Notwithstanding the foregoing, if a Participant is a Specified Employee at the time of his or her Separation from Service, any payment(s) with respect to any Award subject to Section 409A of the Code to which such Participant would otherwise be entitled by reason of such Separation from Service shall be made on the date that is six months after the Participant’s Separation from Service (or, if earlier, the date of the Participant’s death).

(d) If, pursuant to any Award granted under the Plan, a Participant is entitled to a series of installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. For purposes of the preceding sentence, the term “series of installment payments” has the same meaning as provided in Section 1.409A-2(b)(2)(iii) of the Treasury Regulations.

10.	Adjustment Upon Certain Changes

(a) In the event of any change in the Company’s capital structure on account of (i) any extraordinary dividend, stock dividend, stock split, reverse stock split, or any similar equity restructuring, or (ii) any combination or exchange of equity securities, merger, consolidation, recapitalization, reorganization, divesture or other distribution (other than ordinary cash dividends) of assets to stockholders, or any other similar event affecting the Company’s capital structure, to the extent necessary to prevent the enlargement or diminution of the rights of Participants, the Committee shall make such adjustments as it deems necessary or appropriate to (A) the maximum number of shares of Common Stock that may be issued through Awards under the Plan, (B) the maximum number of shares of Common Stock that may be issued through Options under the Plan, (C) to the extent permitted under Section 162(m) of the Code, the maximum number of shares that may be granted to any individual Participant under the Plan; (D) the number or kind of shares subject to an outstanding Award; (E) subject to the limitation contained in Section 10(d), the exercise price applicable to an outstanding Award; (F) to the extent permitted under Section 162(m) of the Code, any measure of performance that relates to an outstanding Award; and (G) any other terms or conditions of outstanding Awards as the Committee in its discretion deems appropriate, in each case in order to reflect such change in the Common Stock.

(b) Subject to any required action by the stockholders of the Company, in the event that the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of shares of Common Stock receive securities of another corporation), the Awards outstanding on the date of such merger or consolidation shall pertain to and apply to the securities that a holder of the number of shares of Common Stock subject to any such Awards would have received in such merger or consolidation (it being understood that if, in connection with such transaction, the stockholders of the Company retain their shares of Common Stock and are not entitled to any additional or other consideration, the Awards shall not be affected by such transaction).

(c) In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company’s assets, (iii) a merger or consolidation involving the Company in which the Company is not the surviving corporation or (iv) a merger or consolidation in which the Company is the surviving corporation but the holders of shares of Common Stock receive securities of another corporation and/or other property, including cash, the Committee shall (x) provide for the exchange of each Option or Other Award outstanding immediately prior to such event (whether or not then exercisable or vested) for a right with respect to some or all of the property for which the stock underlying such Option or Other Award is exchanged and, incident thereto, make any adjustment in the exercise price of the Options or stock appreciation rights or the number or kind of securities or amount of property subject to any Award and/or (y) cancel, effective immediately prior to such event, any outstanding Award (whether or not exercisable or vested) and in full consideration of such cancellation pay to the Participant an amount in cash, with respect to each underlying share of Common Stock, equal to the excess of (A) the value, as determined by the Committee in its discretion of securities and/or property (including cash) received by such holders

of shares of Common Stock as a result of such event over (B) the exercise price, if applicable, in each case, as the Committee may consider, in its sole discretion, necessary or appropriate to prevent dilution or enlargement of rights.

(d) Notwithstanding any provision of this Plan to the contrary, in no event shall (i) any repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule) of Awards issued under the Plan be permitted at any time under any circumstances or (ii) any new Awards be issued in substitution for outstanding Awards previously granted to Participants if such action would be considered a repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule).

(e) Notwithstanding anything to the contrary in this Section 10, any action taken under this Section 10: (i) with respect to incentive stock options, shall be taken only to the extent that it does not constitute a “modification” within the meaning of Section 424(h)(3) of the Code, (ii) shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act, (iii) with respect to Awards subject to Section 409A of the Code, shall conform to the requirements of Section 409A of the Code, and (iv) with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code, shall be taken only to the extent that the Committee determines that such actions may be taken without causing the Company to be denied a tax deduction on account of Section 162(m) of the Code. The Company shall give each Participant notice of an adjustment, substitution, cancellation or other action hereunder and, upon notice, such adjustment, substitution, cancellation or other action shall be conclusive and binding for all purposes. Notwithstanding the foregoing, the Committee may, in its discretion, decline to take action under this Section 10 with respect to any Award if the Committee determines that such action would violate (or cause the Award to violate) applicable law or result in adverse tax consequences to the Participant or to the Company. No provision of this Section 10 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code.

(f) Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of CARBO Ceramics or any other corporation. Except as expressly provided in the Plan, no issuance by CARBO Ceramics of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to, or the terms related to, any Award.

11.	Rights Under the Plan

Except as otherwise expressly provided in any Award grant agreement, no person shall have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to any Award granted pursuant to the Plan until the date (if any) of the issuance of a stock certificate with respect to such shares or the date as of which the Company records the Participant or his or her nominee as the owner of such shares, free and clear of any restrictions or conditions pursuant to the Plan or any grant agreement hereunder, in its books and records. Except as otherwise expressly provided in Section 10 hereof, no adjustment of any Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued or such record is made. Nothing in this Section 11 is intended, or should be construed, to limit the authority

of the Committee to cause the Company to make payments based on the dividends that would be payable with respect to any share of Common Stock underlying an Award if such share were issued or outstanding on the record date of such dividends, or from granting rights hereunder related to such dividends.

The Company shall not have any obligation to establish any separate fund or trust or other segregation of assets to provide for payments under the Plan. To the extent any person acquires any rights to receive payments hereunder from the Company, such rights shall be no greater than those of an unsecured creditor.

12.	No Special Employment Rights; No Right to Award

(a) Nothing contained in the Plan or any Award shall confer upon any Participant any right with respect to the continuation of his or her employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate such employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.

(b) No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of an Award to a Participant at any time shall neither require the Committee to grant any subsequent Award to such Participant (or any Award to any other Participant or other person) at any time, nor preclude the Committee from making subsequent grants to such Participant or any other Participant or other person.

13.	Securities Matters

(a) CARBO Ceramics shall be under no obligation to effect the registration pursuant to the Securities Act of any shares of Common Stock to be issued hereunder or to effect similar compliance under any state or non-U.S. laws. Notwithstanding anything herein to the contrary, CARBO Ceramics shall not be obligated to cause to be issued or delivered any certificates evidencing shares or recordation by the Company of the Participant or his or her nominee as the owner of Common Stock pursuant to the Plan unless and until CARBO Ceramics is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Committee may require, as a condition to the issuance and delivery of certificates evidencing shares or recordation by the Company of the Participant or his or her nominee as the owner of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Committee deems necessary or desirable.

(b) The exercise of any Option granted hereunder shall only be effective at such time as counsel to CARBO Ceramics shall have determined that the issuance and delivery of shares of Common Stock pursuant to such exercise is in compliance with all applicable laws and regulations and the requirements of any securities exchange on which shares of Common Stock are traded. CARBO Ceramics may, in its sole discretion, defer the effectiveness of an exercise of an Option hereunder or the issuance or transfer of shares of Common Stock pursuant to any Award pending or to ensure compliance under federal, state or non-U.S. securities laws. CARBO Ceramics shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Option or the issuance or transfer of shares of Common Stock pursuant to any Award. During the

period that the effectiveness of the exercise of an Option has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

14.	Withholding Taxes

(a)

Payment of Taxes

Participants shall be solely responsible for any applicable taxes (including without limitation income and excise taxes) and penalties, and any interest that accrues thereon, which they incur in connection with the receipt, vesting, settlement or exercise of any Award. Notwithstanding any provision of this Plan to the contrary, in no event shall the Company or any Subsidiary be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment under U.S. or non-U.S. law, including, without limitation, Section 409A of the Code.

(b)

Cash Remittance

Whenever shares of Common Stock are to be issued upon the exercise, grant or vesting of an Award, and whenever any cash amount shall become payable in respect of any Award, CARBO Ceramics shall have the right to require the Participant to remit to CARBO Ceramics in cash an amount sufficient to satisfy federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant, vesting or payment prior to the delivery of any certificate or certificates for such shares or recordation by the Company of the Participant or his or her nominee as the owner of such shares or the effectiveness of the lapse of such restrictions or making of such payment. In addition, upon the exercise or settlement of any Award in cash, or any payment with respect to any Award, CARBO Ceramics shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, settlement or payment.

(c)

Stock Remittance

At the election of the Participant, subject to the approval of the Committee, when shares of Common Stock are to be issued upon the exercise, grant or vesting of an Award, the Participant may tender to CARBO Ceramics a number of shares of Common Stock that have been owned by the Participant for at least six months (or such other period as the Committee may determine) having a Fair Market Value at the tender date determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.

(d)

Stock Withholding

At the election of the Participant, subject to the approval of the Committee, when shares of Common Stock are to be issued upon the exercise, grant or vesting of an Award, CARBO Ceramics shall withhold a number of such shares having a Fair Market Value at the exercise date determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.

15.	Amendment or Termination of the Plan

(a) The Plan and any Award may be amended, suspended or terminated at any time by the Board, provided that no amendment shall be made without stockholder approval, if stockholder approval is required under then applicable law, including any applicable tax, stock exchange or accounting rules, and further provided that no amendment to the Plan or any Award shall violate the prohibition on repricing contained in Section 10(d). Notwithstanding the foregoing, with respect to Awards subject to Section 409A of the Code, any amendment, suspension or termination of the Plan or any such Award shall conform to the requirements of Section 409A of the Code. Except as otherwise provided in Section 15(b), no termination, suspension or amendment of the Plan or any Award shall adversely affect the right of any Participant with respect to any Award theretofore granted, as determined by the Committee, without such Participant’s written consent.

(b) The Committee may amend or modify the terms and conditions of an Award to the extent that the Committee determines, in its sole discretion, that the terms and conditions of the Award violate or may violate Section 409A of the Code; provided , however, that (i) no such amendment or modification shall be made without the Participant’s written consent if such amendment or modification would violate the terms and conditions of any other agreement between the Participant and the Company and (ii) unless the Committee determines otherwise, any such amendment or modification of an Award made pursuant to this Section 15(b) shall maintain, to the maximum extent practicable, the original intent of the applicable Award provision without contravening the provisions of Section 409A of the Code. The amendment or modification of any Award pursuant to this Section 15(b) shall be at the Committee’s sole discretion and the Committee shall not be obligated to amend or modify any Award or the Plan, nor shall the Company be liable for any adverse tax or other consequences to a Participant resulting from such amendments or modifications or the Committee’s failure to make any such amendments or modifications for purposes of complying with Section 409A of the Code or for any other purpose. To the extent the Committee amends or modifies an Award pursuant to this Section 15(b), the Participant shall receive notification of any such changes to his or her Award and, unless the Committee determines otherwise, the changes described in such notification shall be deemed to amend the terms and conditions of the Award and the applicable agreement governing the terms of such Award.

16.	No Obligation to Exercise

The grant to a Participant of an Award shall impose no obligation upon such Participant to exercise such Award.

17.	Transfers Upon Death

Upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executors or administrators of the Participant’s estate or by any person or persons who shall have acquired such right to exercise by will or by the laws of descent and distribution. No transfer by will or the laws of descent and distribution of any Award, or the right to exercise any Award, shall be effective to bind CARBO Ceramics unless the Committee shall have been furnished with (a) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been

applicable to the Participant and to be bound by the acknowledgements made by the Participant in connection with the grant of the Award.

18.	Expenses and Receipts

The expenses of the Plan shall be paid by CARBO Ceramics. Any proceeds received by CARBO Ceramics in connection with any Award will be used for general corporate purposes.

19.	Change in Control.

(a) Unless otherwise set forth in the instrument evidencing an Award, upon a Change in Control, (i) each outstanding Award that is eligible to vest based solely on the passage of time and/or the Participant’s continued service to the Company shall become fully vested and exercisable or settled in cash or stock, as applicable, and all restrictions thereon shall lapse and (ii) each outstanding Award that is eligible to vest based on the achievement of performance criteria shall vest and become exercisable or settled in cash or stock, as applicable, and the restrictions thereon shall lapse, with respect to the number of shares of Common Stock underlying such Award or the amount of cash that is equal to (a) the total number of shares of Common Stock underlying such Award or cash amount under an Award (including a Participant’s Target Award) that is eligible to vest based on performance during a performance period that includes the date of the Change in Control multiplied by (b) a fraction, the numerator of which is the number of days during such performance period that have elapsed prior to (and including) the date of the Change in Control and the denominator of which is the total number of days in such performance period, in each case as determined by the Committee. Any portion of a performance-based vesting award that does not vest pursuant to clause (ii) of the preceding sentence shall be forfeited as of the date of the Change in Control and the Participant shall have no further rights with respect thereto. With respect to any Award not described in the first sentence of this Section 19, the effect of a Change in Control on such Award (if any) shall be set forth in the instrument governing the terms of such Award.

(b) For purposes of the Plan and any agreement governing the terms of any Award hereunder, the term “Change in Control” means the occurrence of any of the following after the Effective Date: (i) the occurrence of a change in control of the Company of a nature that would be required to be reported or is reported in response to Item 5.01 of the current report on Form 8- K, as in effect on the Effective Date, pursuant to Sections 13 or 15(d) of the Exchange Act; or (ii) any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s outstanding securities (other than any Person who was a “beneficial owner” of securities of the Company representing 30% or more of the combined voting power of the Company’s outstanding securities prior to the Effective Date); or (iii) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board, provided that any person becoming a director subsequent to the Effective Date whose appointment to fill a vacancy or to fill a new Board position was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same nominating committee serving under an Incumbent Board, shall be, for purposes of this clause (iii), considered as though he were a member of the Incumbent Board; or (iv) the occurrence of any of the following of which the Incumbent Board does not approve (A) merger or consolidation in which the Company is not the surviving corporation or (B) sale of all or substantially all of the assets of the Company; or (v) consummation of a plan of reorganization, merger or consolidation of the Company with one or

more corporations as a result of which the outstanding shares of the class of securities then subject to the plan of reorganization are exchanged or converted into cash or property or securities not issued by the Company, which was approved by stockholders pursuant to a proxy statement soliciting proxies from stockholders of the Company, by someone other than the then current management of the Company.

Notwithstanding the foregoing and for the purposes of timing of payment, distribution or settlement only, a Change in Control shall not be deemed to occur under this Section 19 of this Plan with respect to any Award that constitutes “non-qualified deferred compensation” within the meaning of Section 409A of the Code, unless the events that have occurred would also constitute a “Change in the Ownership or Effective Control of a Corporation or in the Ownership of a Substantial Portion of the Assets of a Corporation” under Treasury Department Final Regulation 1.409A-3(i)(5), or any successor thereto.

20.	Governing Law

The Plan and the rights of all persons under the Plan shall be construed and administered in accordance with the laws of the State of Delaware without regard to its conflict of law principles.

21.	Effective Date and Term of Plan

The 2014 CARBO Ceramics Inc. Omnibus Incentive Plan was adopted by the Board on January 21, 2014, subject to the approval of the Plan by the stockholders of CARBO Ceramics. No grants of Awards may be made under the Plan after the fifth anniversary of the Effective Date.

Exhibit 10.2

EXECUTION VERSION

SHARE PURCHASE AGREEMENT

between

CARBO CERAMICS (MAURITIUS) INC.

and

CARBO LLC

and

Petro Welt Technologies AG

and

PeWeTe Evolution Limited

Dated as of 21 July 2017

EXECUTION VERSION

Table of Contents

	Page
Article I
DEFINITIONS
Section 1.01 Definitions	1
Section 1.02 Interpretation	9
Section 1.03 Headings	9
Section 1.04 Exhibits and Schedules	9
Section 1.05 Obligations Joint and Several	9
Article II
SALE AND PURCHASE
Section 2.01 Sale and Purchase	10
Section 2.02 Advance.	10
Section 2.03 Closing	11
Section 2.04 Consideration Adjustment	12
Article III
WARRANTIES OF THE SELLERS
PART A – TITLE AND CAPACITY WARRANTIES
Section 3.01 Organisation; Authorization; Validity	13
Section 3.02 No Violations	13
Section 3.03 Consents and Approvals	13
Section 3.04 Title; Ownership	13
Section 3.05 Proceedings	14
Section 3.06 Solvency	14
PART B – BUSINESS WARRANTIES
Section 3.07 Organization; Qualification	15
Section 3.08 No Default; Permits	15
Section 3.09 Financial Statements	15
Section 3.10 Absence of Certain Changes	15
Section 3.11 Taxes	16
Section 3.12 Environmental Matters	16
Section 3.13 Intellectual Property	17
Section 3.14 Legal Compliance, Disputes and Investigations	17
Section 3.15 Material Contracts	17
Section 3.16 Assets	18

EXECUTION VERSION

Section 3.17 Property	18
Section 3.18 Financial Indebtedness	18
Section 3.19 Related Parties	18
Section 3.20 Employees and Management	18
Article IV
APPLICATION OF WARRANTIES
Section 4.01 Survival	19
Section 4.02 The Warrantor’s Knowledge	19
Section 4.03 Disclosure	19
Article V
WARRANTIES OF THE BUYERS
Section 5.01 Organization; Authorization; Validity	20
Section 5.02 No Violations	20
Section 5.03 Consents and Approvals	20
Section 5.04 Proceeds	20
Section 5.05 Proceedings	20
Section 5.06 Solvency	21
Section 5.07 Sanctions	21
Article VI
COVENANTS
Section 6.01 Conduct of Business	21
Section 6.02 Leakage	21
Section 6.03 Gross-up	21
Section 6.04 Further Actions	22
Section 6.05 Rebranding	22
Section 6.06 Licensing	23
Section 6.07 Non-Solicitation.	23
Article VII
CONDITIONS PRECEDENT
Section 7.01 Conditions Precedent for the Sellers and the Buyer	24
Section 7.02 Conditions Precedent for the Buyer	24
Section 7.03 Conditions Precedent for the Sellers	24
Section 7.04 Satisfaction of Conditions Precedent	25

EXECUTION VERSION

Article VIII
TERMINATION
Section 8.01 Termination	25
Section 8.02 Effect of Termination	26
Article IX
LIMITATIONS ON LIABILITY
Section 9.01 Limitations on Liability	26
Section 9.02 Conduct of Claims	29
Article X
MISCELLANEOUS
Section 10.01 Waivers and Amendments	29
Section 10.02 Notices	29
Section 10.03 Counterparts	30
Section 10.04 Entire Agreement	30
Section 10.05 Severability	31
Section 10.06 Confidentiality	31
Section 10.07 Third Party Rights	32
Section 10.08 Assignment	32
Section 10.09 Expenses	32
Section 10.10 Language	32
Section 10.11 Conversion	32
Section 10.12 Agreement Survives Closing	32
Section 10.13 No Partnership	32
Article XI
GOVERNING LAW AND ARBITRATION
Section 11.01 Governing Law	32
Section 11.02 Arbitration	33
SCHEDULES
Schedule 1 Closing	*
Schedule 2 Properties	*
Schedule 3 Closing Accounts	*
EXHIBITS
Exhibit A Sellers Bank Account Details	*
Exhibit B Patent And Know-How Use License Agreement	54

iii

EXECUTION VERSION

SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT, dated as of 21 July 2017, is made between Petro Welt Technologies AG , a company organized and existing under the law of Austria with registration number FN 69011m (“ PWT Austria ”), PeWeTe Evolution Limited a company organized and existing under the law of Cyprus with registration number HE 355246 (“ PWT Cyprus ”, each of PWT Austria and PWT Cyprus a “ Buyer ” and together, the “ Buyers ”), CARBO Ceramics (Mauritius) Inc. , a company organized and existing under the law of the Republic of Mauritius (“ CARBO Mauritius ”) and CARBO LLC , a corporation organized and existing under the law of Delaware (“ CARBO Delaware , each of CARBO Mauritius and CARBO Delaware a “ Seller ” and together, the “ Sellers ”, and together with the Buyers, the “ Parties ”).

RECITALS

WHEREAS, the Sellers collectively own the Purchase Shares (as defined below) in Holdco (as defined below);

WHEREAS, the Company (as defined below) is a wholly-owned subsidiary of Holdco;

WHEREAS, the Sellers seek to sell the Purchase Shares to the Buyers, and the Buyers seek to buy the Purchase Shares, on the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the promises and of the mutual agreements herein contained, the Parties hereby agree as follows:

Article I
DEFINITIONS

Section 1.01 Definitions . As used in this Agreement, the following terms shall have the following meanings:

“ Adjusted Purchase Price ” means the amount payable by the Buyers to the Sellers for the Purchase Shares, being the Purchase Price, subject to any adjustment required under Section 2.04.

“ Advance ” means US$ 1,600,000 (one million, six hundred thousand U.S. Dollars).

“ Affiliate ” means, with respect to any Person: (i) any Person in which such first Person has a direct or indirect Controlling Interest; (ii) any other Person that directly, or through one or more intermediaries, is a Controlling Person of such first Person; and (iii) any other Person that has the same direct or indirect Controlling Person as such first Person.

“ Applicable Law ” means any applicable law, statute, ordinance, code, rule, regulation, order, judgment, injunction, decree, ruling, determination, award, standard, permit or variance of any Governmental Authority, or similar provisions having the force or effect of law.

“ Arbitral Tribunal ” has the meaning given in Section 11.02(b) .

“ Award ” has the meaning specified in Section 11.02(b) .

EXECUTION VERSION

“ Balancing Payment Date ” means the date falling five Business Days after (i) the Completion Accounts Agreement Date; and (ii) the Determination Date , as the case may be .

“ Bank of Russia ” means the Central Bank of the Russian Federation.

“ Business Day ” means any day other than: (a) a Saturday or Sunday; or (b) a day on which commercial banking institutions generally are authorized or obligated by law, regulation or executive order to close in the city specified, and if no city is specified, then in any of Houston, Moscow or Nicosia.

“ Buyer ” and “ Buyers ” each has the meaning specified in the preamble .

“ Buyers Bank Account ” means the bank account denominated in US$ details of which are set out in Exhibit A, or such other account(s) as the Buyers may notify the Sellers in writing by ten (10) calendar days notice. Each Buyer hereby confirms that receipt of funds into the Buyers Bank Account comprises its effective receipt of its monies due hereunder to the Buyers.

“ CARBO Letters ” means the mark “CARBO” owned by any Seller, Holdco, the Company or their Affiliates whether registered or unregistered.

“ Claim ” means any Warranty Claim or other claim (whether for breach of contract or otherwise) asserted by the Buyer under or in connection with this Agreement.

“ Closing ” has the meaning specified in Section 2.03(a) .

“ Closing Accounts ” means the closing accounts of the Company to be prepared in accordance with Schedule 3 .

“ Closing Accounts Agreement Date ” has the meaning specified in Schedule 3 .

“ Closing Date ” has the meaning specified in Section 2.03(a) .

“ Company ” means Limited Liability Company CARBO Ceramics (Eurasia), a limited liability company organized and existing under the law of the Russian Federation and registered in the Unified State Register of Legal Entities under registration number 1046603130364.

“ Company RAS Annual Financial Statements ” means the audited unconsolidated financial statements of the Company prepared in accordance with RAS comprising the balance sheet as of 31 December and the statements of profit and loss for the year ending 31 December, together with notes comprising a summary of significant accounting policies and other explanatory information.

“ Competition Approval ” means insofar as the transactions contemplated by this Agreement require (or are deemed to require) the clearance decision with respect to the transactions contemplated by this Agreement issued by the Federal Antimonopoly Service of the Russian Federation pursuant to Federal Law No. 135-FZ of 26 July 2006 “On the Protection of Competition” (as amended).

“ Consolidation Order ” has the meaning specified in Section 11.02(i) .

EXECUTION VERSION

“ Contract ” means any agreement , contract or arrangement that is legally binding.

“ Controlling Interest ” means: (a) the ownership or control, direct or indirect, of 50% or more of the issued share capital or voting rights of a Person; (b) an ownership interest of 50% or more of a partnership or being the general partner of a partnership; (c) a right to appoint a majority of directors, executive officers or other applicable governing body of a Person; (d) the legal power to direct or cause the direction of the general management and policies of a Person; or (e) the right to receive, in relation to a Person, directly or indirectly, 50% or more of the proceeds arising from: (i) any declaration of a dividend; (ii) a distribution arising in the course of a winding up, whether solvent or insolvent; or (iii) any return of capital to shareholders of such Person.

“ Controlling Person ” means, with respect to any Person (other than a natural person), any other Person which has a Controlling Interest in such Person.

“ Critical Warranties ” means the Warranties given in Part A of Article III ( Title and Capacity Warranties ) and in Section 3.07 ( Organization; Qualification ).

“ Data Room ” means the virtual data room established for purposes of the transactions contemplated by this Agreement containing documents and information made available to the Buyer, the contents of which are recorded on the DVD attached to the Disclosure Letter.

“ Determination Date ” has the meaning specified in Schedule 3 .

“ Disagreement Notice ” has the meaning specified in Schedule 3 .

“ Disclosure Letter ” means the letter of the same date as this Agreement from both Sellers to the Buyer written for the purposes set out in Section 4.03 and setting out particulars for specific Warranties, delivered to the Buyer before the execution of this Agreement (as may be supplemented by the Second Disclosure Letter).

“ Dispute ” has the meaning specified in Section 11.02(a) .

“ Disputed Details ” has the meaning specified in Schedule 3 .

“ Draft Closing Accounts ” has the meaning specified in Schedule 3 .

“ Effective Time ” has the meaning specified in Schedule 3 .

“ Employees ” means the employees of the Target Companies.

“ Encumbrance ” means any mortgage, charge (whether legal or equitable and whether fixed or floating), lien, pledge or other encumbrance securing any obligation of any Person.

“ Environment ” means all or any of the following media (alone or in combination): (a) air (including the air within buildings and the air within other natural or man-made structures, whether above or below ground); (b) water (including water under or within land such as surface water, groundwater, ponds, streams, ocean waters, navigable waters, wetlands, drinking water supply, streams, drainage basins, drains and sewers); (c) soil,

EXECUTION VERSION

land, sediments and subsurface strata; and (d) any ecological systems and living organisms supported by these media, including plant, animal life and man and his property.

“ Environmental Law ” means Applicable Law regulating: (a) the pollution or protection of, or compensation for damage or harm to, the Environment; (b) conservation of resources, including threatened or endangered species; (c) releases into, or the presence in, the Environment of Hazardous Substances; and/or (d) the use, production, generation, treatment, storage, disposal, transportation, distribution, labeling, testing, processing, releasing, remediation or clean-up or handling of Hazardous Substances.

“ Expert Accountant ” has the meaning specified in Schedule 3 .

“ Fairly Disclosed ” means disclosure in such manner and in such detail as to enable an experienced buyer with the assistance of professional advisers to make a reasonably accurate assessment of the matter concerned.

“ Financial Indebtedness ” means with respect to any person, (a) all obligations for borrowed funds, (b) all obligations evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations to pay the deferred purchase price of property or services; (d) all obligations as lessee under leases which, in accordance with IFRS, are or must be recorded as capital leases, (e) all receivables sold or discounted (other than to the extent sold on a non-recourse basis), (f) the amount of all unpaid drawings under letters of credit issued for the account of such person, (g) all obligations for borrowed funds secured by any Encumbrance on any assets whether or not such person has assumed or become liable for payment of such obligations for borrowed funds, (h) derivatives or interest rate caps, collar or swap agreements or other contracts or arrangements designed to protect against fluctuations in interest rates or currency exchange rates and (i) all guarantees of such person in respect of Financial Indebtedness of others of the kinds referred to in clauses (a) through (h) above. Any of the foregoing notwithstanding, for the purposes of this Agreement, trade and other accounts payable of any Person shall not be considered Financial Indebtedness so long as such accounts are payable within 90 days of the later of the delivery of the underlying good or service or the invoice for the underlying good or service.

“ Full Title Guarantee ” means with the benefit of the implied covenants set out in Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 when a disposition is expressed to be made with full title guarantee.

“ Governmental Approval ” means any authorization, consent, approval, license, ruling, permit, certification, exemption, waiver or registration by or with any Governmental Authority.

“ Governmental Authority ” means any executive, judicial, legislative, administrative, branch, ministry, department, agency, office, organization, authority or other body (including any state pension, medical and social insurance funds) of any federal, national, state or local governmental authority or union of any such government authorities (other than any commercial entity acting in a commercial capacity).

“ Hazardous Substances ” means any natural or artificial substance of any nature whatsoever (whether in the form of a solid, liquid, gas or vapour alone or in combination with any other substance) which is capable of causing harm or damage to the Environment or to public health or welfare or capable of causing a nuisance, including

EXECUTION VERSION

controlled, special, hazardous, toxic or dangerous wastes or pollutants or that is a substance, waste or material regulated, defined, designated or controlled by Environmental Law.

“ Holdco ” means CARBO Ceramics Cyprus Limited, a limited liability company organized and existing under the law of the Republic of Cyprus with registration number HE 142788.

“ Holdco IFRS Annual Financial Statements ” the audited unconsolidated financial statements of Holdco prepared in accordance with IFRS comprising the statement of financial position as of 31 December and the statements of comprehensive income, changes in equity and cash flows for the year ending 31 December, together with notes comprising a summary of significant accounting policies and other explanatory information.

“ Holdco Participatory Interest ” has the meaning specified in Section 3.04(d) .

“ IFRS ” means the International Financial Reporting Standards issued by the International Accounting Standards Committee in effect as of the date of the relevant financial statements.

“ Information ” has the meaning specified in Section 10.06(a) .

“ Intellectual Property ” means:

(a)

patents, utility models and rights in inventions;

(b)

rights in each of know-how, confidential information and trade secrets; trademarks, service marks, rights in logos, trade names, rights in each of get-up and trade dress and domain names;

(c)

(d)

rights in get-up, rights in inventions, rights in know-how and any other intellectual property rights; and

(e)

all rights or forms of protection subsisting now or in the future, having equivalent or similar effect to the rights referred to in paragraphs (a) to (d ) above, anywhere in the world and registered includes registrations and applications for registration;

in each case: (i) anywhere in the world; (ii) whether unregistered or registered (including all applications, rights to apply and rights to claim priority); and (iii) including all divisionals, continuations, continuations-in-part, reissues, extensions , re-examinations and renewals.

“ Key Employee ” means any of the following employees of the Company as at the date hereof: (i) Nikitina Anna Aleksandrovna (in Russian – Никитина Анна Александровна ), (ii) Sukovatov Vyacheslav Yurevich (in Russian – Суковатов Вячеслав Юрьевич ) and (iii) Ibatullin Ildar Akhmetovich (in Russian – Ибатуллин Ильдар Ахметович ).

“ LCIA ” has the meaning specified in Section 11.02(a) .

“ Leakage ” means:

EXECUTION VERSION

(a) t he declaration, making or payment of any dividend or other distribution of profits or assets or return of capital (including by way of any reduction, redemption or repayment of share capital) by the Company or Holdco to the Parent Group ;

(b) the payment of any other sum by the Company or Holdco to the Parent Group ;

(c) the sale, purchase, transfer or disposal of any asset, right or other benefit by the Company or Holdco to the Parent Group ;

(d) any forfeiture or loss of assets arising from third party rights created over any of the assets or participation interests (shares) of the Company or Holdco in favour of the Parent Group ;

(e) the assumption of any indebtedness of any kind incurred (or any guarantee or indemnity or similar arrangement given in respect thereof) by the Company or Holdco in favour of the Parent Group ;

(f) any amendment of the terms of its borrowing or indebtedness in the nature of borrowing owed by the Company or Holdco to the Parent Group for the benefit of the Parent Group ;

(g) any amounts or obligations owed to the Company or Holdco by the Parent Group being cancelled, waived or forgiven by the Company or Holdco;

(h) any payment of any fees, costs or expenses (including any management, monitoring or directors’ fees or bonuses or payments of a similar nature) incurred or made for the benefit of the Parent Group by the Company or Holdco;

(i) any Tax payable by the Company or Holdco as a consequence of any and all of the foregoing; or

(j) any agreement, understanding or arrangement made or entered into by the Company to do or give effect to any of the foregoing.

“ License Agreement ” has the meaning specified in Section 6.06 .

“ Long Stop Date ” means August 31, 2017 subject to the extension for Closing contemplated by Section 2.03(a).

“ Losses ” means all damages, fines, penalties, losses and liabilities and all properly documented out-of-pocket costs (including reasonable legal costs), expenses (including irrecoverable taxation), disbursements or other payments actually suffered.

“ Material Adverse Effect ” means a material adverse effect on: (a) the business of the Company that would be expected to decrease annual revenue or total assets (excluding depreciation and amortization) of the Company, with reference to the Company RAS Annual Financial Statements as of, and for the year ending 31 December 2016, by at least 25%; or (b) the ability or legality of a Seller to enter into this Agreement or to perform or comply with its material obligations hereunder.

“ Material Contracts ” has the meaning specified in Section 3.15 .

EXECUTION VERSION

“ Net Debt ” means the net debt of the Compan y as calculated in accordance with Schedule 3 .

“ Net Working Capital ” means the net working capital of the Company as calculated in accordance with Schedule 3 .

“ Ordinary Course of Business ” means the ordinary course of business consistent with past practice (including with respect to quantity and frequency) of the Company.

“ Organizational Documents ” means, with respect to a company, the charter, the memorandum of association, articles of association, or equivalent constitutional document in its jurisdiction of incorporation.

“ Parent Group ” means CARBO Ceramics Inc. and its subsidiaries (excluding Holdco and the Company).

“ Parties ” has the meaning specified in the preamble and “Party” means any of them.

“ Payment Confirmation ” has the meaning specified in Schedule 1 .

“ Permit ” means any license, registration, consent, permit, variance, franchise, notice, authorization and/or approval from a Governmental Authority.

“ Permitted Leakage ” means:

(a) any Leakage made in the Ordinary Course of Business (including under current license agreements for use of intellectual property);

(b) any cash payment of dividends or reduction of capital;

(c) any payment made in respect of salaries, pension contributions, benefits or expenses due to any officer or employee of the Company or Holdco in the ordinary course of their employment consistent with past practice, which shall be made in accordance with, and shall not exceed the amounts to which they are legally entitled under, their respective employment agreements.

“ Person ” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental entity or any entity with legal capacity recognized by any Applicable Law.

“ Properties ” means the buildings and land plots which are set out in Schedule 2 ( Properties ).

“ Purchase Price ” means US$22,000,000 (twenty-two million U.S. Dollars). The Purchase Price shall be denominated and paid by the Buyer in US$.

“ Purchase Shares ” means 18,000 ordinary shares of Holdco with a par value of US$1 each, representing 100 percent of the issued and outstanding shares comprising the capital of Holdco.

EXECUTION VERSION

“ RAS ” means the accounting and financial reporting standards generally accepted in the Russian Federation as adopted by Federal Law No 402-FZ of 6 December 2011 “On Accounting” (as amended) , together with accounting policy regulations, statements and orders as adopted by the Russian Ministry of Finance .

“ Response Date ” has the meaning specified in Schedule 3 .

“ Rubles ” or “ RUB ” means the lawful currency of the Russian Federation from time to time.

“ Rules ” has the meaning specified in Section 11.02(a) .

“ Second Disclosure Letter ” means any letter (including any schedules, appendices or exhibits thereto) from the Sellers to the Buyer delivered pursuant to Section 4.03 .

“ Seller ” and “ Sellers ” each has the meaning specified in the preamble.

“ Sellers Bank Account ” means, for the purposes of receiving the Purchase Price, the bank account denominated in US$ details of which are set out in Exhibit A, or such other account(s) as the Sellers may notify the Buyers in writing by ten (10) calendar days notice. Each Seller hereby confirms that receipt of the Purchase Price into the Sellers Bank Account comprises its effective receipt of its respective share of the Purchase Price.

“ Significant Loss ” has the meaning specified in Section 7.02(a) .

“ Signing Date ” means the date of this Agreement.

“ Target Company ” means each of the Company and Holdco, and “ Target Companies ” means both of them.

“ Target Net Debt ” means zero.

“ Target Net Working Capital ” means the amount of RUB628,000,000 (six hundred twenty eight million Rubles).

“ Tax ”, “ Taxation ” or “ Taxes ” means: (a) all forms of taxation, levies, imposts, contributions, duties, liabilities and charges in the nature of taxation and all related withholdings or deductions of any nature (including, for the avoidance of doubt, obligatory pension, medical and social fund contributions and corresponding obligations elsewhere); and (b) all fines, penalties, charges and interest payable in connection therewith; in each case as imposed by a Governmental Authority.

“ Tax Authority ” means any taxing or other authority competent to impose any liability in respect of Taxation or responsible for the administration and/or creation or enforcement of any Tax Law.

“ Tax Law ” means Applicable Law in relation to Tax.

“ Tax Warranties ” means the Warranties given in Section 3.11 ( Taxes) .

“ Third Party Claim ” has the meaning specified in Section 9.02 .

EXECUTION VERSION

“ U.S. Dollars ” , “ USD ” or “ US$ ” means the lawful currency of the United States of America from time to time.

“ US$ Conversion Rate ” means, for any date, the official exchange rate for the conversion of U.S. Dollars (US$) into Rubles (RUB) (or Rubles (RUB) into U.S. Dollars (US$), as applicable) quoted by the Bank of Russia for, and effective on, such date.

“ Warranties ” means the warranties set forth in Article III .

“ Warranty Claim ” means any Claim arising from the Warranties.

Section 1.02 Interpretation .

(a) The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. Whenever the words “include”, “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” The words describing the singular number shall include the plural and vice versa, words denoting either gender shall include both genders and words denoting natural persons shall include corporations and partnerships and vice versa. References to this Agreement or to another document include a reference to this Agreement or such other document as varied, amended, modified, novated or supplemented from time to time. A reference to any Person (including a Party) in any capacity includes its successors and permitted assigns and subsequent successors and permitted assigns. Any reference to a legal term for any action, remedy, method or form of judicial proceeding, legal document, court or other legal concept or matter under English law will be deemed to include reference to the corresponding or most similar legal term in any jurisdiction other than England, to the extent that such jurisdiction is relevant to the transactions contemplated by this Agreement or the terms of this Agreement.

(b) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favouring or disfavouring any Person by virtue of the authorship of any provisions of this Agreement.

Section 1.03 Headings . Headings of the Articles, Sections, Exhibits and Schedules of this Agreement and the Table of Contents are for convenience only, and shall be given no substantive or interpretative effect whatsoever.

Section 1.04 Exhibits and Schedules . The Exhibits and Schedules hereto shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

Section 1.05 Obligations Joint and Several . The obligations of the Sellers hereunder are joint and several. The obligations of the Buyers hereunder are joint and several.

EXECUTION VERSION

Article II
SALE AND PURCHASE

Section 2.01 Sale and Purchase . CARBO Mauritius shall sell and transfer to PWT Austria, and PWT Austria shall purchase and accept, legal and beneficial ownership of 17,980 Purchase Shares with Full Title Guarantee free and clear of all Encumbrances with effect from Closing on the terms and subject to the conditions set forth herein. CARBO Delaware shall sell and transfer to PWT Cyprus, and PWT Cyprus shall purchase and accept, legal and beneficial ownership of 20 Purchase Shares with Full Title Guarantee free and clear of all Encumbrances with effect from Closing on the terms and subject to the conditions set forth herein. Subject to the satisfaction (or waiver by the Party whose obligations hereunder are subject to such satisfaction) of the conditions precedent set forth in Article VII , on the Closing Date:

(a) PWT Austria shall pay the aggregate Purchase Price (less the Advance that has been paid into the Sellers Bank Account) on behalf of itself and PWT Cyprus by wire transfer of immediately available funds to the Sellers Bank Account, it being agreed that:

(i) the aggregate consideration for the purchase of the 17,980 Purchase Shares held by CARBO Mauritius is USD 21,975,556; and

(ii) the aggregate consideration for the purchase of the 20 Purchase Shares held by CARBO Delaware is USD 24,444;

(b) each Seller shall transfer to each Buyer the Purchase Shares by way of transferring them to the respective Buyer with Full Title Guarantee, free and clear of all Encumbrances;

(c) the Purchase Shares shall be sold together with all rights attached to them at the Closing Date or subsequently becoming attached to them, including rights to receive dividends; and

(d) the Buyers are not obliged to complete the purchase, and the Sellers are not obliged to complete the sale, of any of the Purchase Shares unless the purchase by the Buyers of all of the Purchase Shares is completed simultaneously.

Section 2.02 Advance .

(a) No later than 16:00 hours (Houston time) on July 26, 2017, PWT Austria shall pay the Advance to the Sellers Bank Account.

(b) The Parties agree that if:

(i) Closing does not occur hereunder due to a breach of this Agreement by a Seller and this Agreement has been terminated, then the Sellers shall no later than the third Houston Business Day after the date of such termination pay the Advance to the Buyers by wire transfer to Buyers Bank Account;

(ii) Closing does not occur hereunder due to a breach of this Agreement by a Buyer and this Agreement has been terminated, then the

EXECUTION VERSION

Sellers shall be entitled to keep and retain and have the benefit of the Advance (without prejudice to any other rights and remedies of a Seller hereunder);

(iii) Closing does not occur hereunder due to the condition precedent set out in Section 7.01(a) not being satisfied and this Agreement has been terminated, then the Sellers shall no later than the third Houston Business Day after the date of such termination pay the Advance (less the amount of USD 275,000, which amount the Buyers shall be entitled to keep and retain and have the benefit of) to Buyers by wire transfer to Buyers Bank Account.

Section 2.03 Closing .

(a) On the terms and subject to the conditions set forth herein, the closing of the transactions provided for in this Section 2.03 (the “ Closing ”) shall take place at the Moscow offices of Cleary Gottlieb Steen & Hamilton LLC (or such other place as mutually agreed between the Parties) on August 31, 2017, if the relevant Party notified the other Parties of the satisfaction or waiver of the final condition precedent (other than any conditions required to be satisfied at the Closing) contained in Article VII no later than on August 30, 2017, provided that if the only condition precedent remaining outstanding on August 30 is Competition Approval as contemplated by Section 7.01(a) where the application for such approval remains outstanding and under consideration, and further provided that the Buyers have used their reasonable efforts to obtain such Competition Approval as soon as reasonable practicable and submitted such application for approval no later than July 27, 2017, then the date of Closing shall be extended to the second Business Day after the date of receipt of Competition Approval but in no case later than September 12, 2017. The actual time and date of the Closing are herein referred to as the “ Closing Date ”.

(b) At Closing each Party shall do all those things respectively required of it under this Article II and in Schedule 1 . The Buyers are not obliged to complete this Agreement unless the Sellers comply with all their obligations under this Article II and Schedule 1 . The Sellers are not obliged to complete this Agreement unless the Buyers comply with all their obligations under this Article II and Schedule 1 .

(c) If Closing does not take place on the Closing Date because a Party fails to comply with any of its obligations under this Article II and Schedule 1 (whether such failure amounts to a repudiatory breach or not), the Buyers (where the defaulting Party is a Seller) or the Sellers (where the Defaulting Party is a Buyer) may by notice to the defaulting Party:

(i) proceed to Closing to the extent reasonably practicable (without limiting its rights under this Agreement);

(ii) postpone Closing to a date not more than five (5) Business Days after the Closing Date; or

(iii) terminate this Agreement.

(d) If a Party postpones Closing to another date in accordance with this Section 2.03 , the provisions of this Agreement apply as if that other date is the Closing Date (provided Closing may only be postponed once).

EXECUTION VERSION

(e) If a Party terminates this A greement pursuant to Section 2.03(c)(iii) , each Party ’ s further rights and obligations cease immediately on such termination, but such termination does not affect a Party ’ s accrued rights and obligations as at the date of termination , including those accrued rights and obligations arising from or relating to the other Party’s failure to comply with its obligations under this Agreement prior to such termination .

Section 2.04 Consideration Adjustment.

(a) Following Closing, the Closing Accounts shall be prepared in accordance with Schedule 3 .

(b) On the Balancing Payment Date the amount of the Adjusted Purchase Price shall be calculated between the Parties after the following additions and deductions to the Purchase Price (and further taking into account any interim payment made as contemplated by paragraph 4 of Part 3 of Schedule 3 ):

(i) if the amount of the Net Debt as shown in the Closing Accounts is:

(A) less than the Target Net Debt, the Buyers shall pay to the Sellers to the Sellers Bank Account, as an increase in the Adjusted Purchase Price, an amount equal to the difference; or

(B) greater than the Target Net Debt, the Sellers shall pay to the Buyers to the Buyers Bank Account, as a reduction in the Adjusted Purchase Price, an amount equal to the difference;

(ii) if the amount of the Net Working Capital as shown in the Closing Accounts is:

(A) at least US$100,000 (one hundred thousand U.S. Dollars) less than the Target Net Working Capital, the Sellers shall pay to the Buyers to the Buyers Bank Account, as a reduction in the Adjusted Purchase Price, the amount by which such shortfall is greater than US$100,000 (one hundred thousand U.S. Dollars); or

(B) at least US$100,000 (one hundred thousand U.S. Dollars) more than the Target Net Working Capital, the Buyers shall pay to the Sellers to the Sellers Bank Account, as an increase in the Adjusted Purchase Price, the amount by which such excess is greater than US$100,000 (one hundred thousand U.S. Dollars).

(c) All payments pursuant to paragraph (b) above shall be made on the Balancing Payment Date. A Party shall be entitled to set off any amount due from the other Party(ies) pursuant to paragraph (b) from amounts that it owes to such Party(ies) pursuant to this Agreement.

EXECUTION VERSION

Article III
WARRANTIES OF THE SELLER S

PART A – TITLE AND CAPACITY WARRANTIES

Each of the warranties set out in this Article III shall be separate and independent and shall not be limited by reference to any other section of this Agreement save as expressly provided otherwise. The warranties set out in this Article III shall be deemed to be given at the date of this Agreement and shall be deemed to be repeated immediately before the Closing with reference to the facts then existing. The Sellers each warrant to the Buyers on a joint and several basis as follows:

Section 3.01 Organisation; Authorization; Validity .

(a) Each Seller is duly organized and validly existing and registered under the Applicable Laws of its jurisdiction of organization.

(b) Each Seller has full legal capacity, power and authority and has taken all corporate action required of it, to enter into this Agreement, carry out its obligations hereunder and consummate the transactions contemplated hereby. The execution, delivery and performance by each Seller of this Agreement and the consummation by each Seller of the transactions contemplated hereby, have been duly authorized on the part of each Seller.

(c) This Agreement has been duly executed and delivered by each Seller, and (assuming due and valid authorization, execution and delivery hereof by each Buyer) is a valid and binding obligation of each Seller, enforceable against each Seller in accordance with its terms, except enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally.

Section 3.02 No Violations . The execution, delivery or performance of this Agreement and the consummation by each Seller of the transactions contemplated hereby do not and will not: (a) conflict with, or result in a breach of or default under, any terms or conditions of its Organizational Documents; (b) conflict with or violate any Applicable Law applicable to each Seller, Holdco or the Company; or (c) result in any violation, breach, conflict, default or event of default under the terms of any contract to which each Seller, Holdco or the Company is a party.

Section 3.03 Consents and Approvals . The execution, delivery and performance of this Agreement by each Seller does not and will not require any consent, approval, authorization or other action by any third party or any Governmental Approval other than Competition Approval.

Section 3.04 Title; Ownership .

(a) Each Seller is the sole legal and beneficial owner of, and has good and valid title directly to, the Purchase Shares it is selling hereunder, free and clear of all Encumbrances.

EXECUTION VERSION

(b) The Purchase Shares comprise 100 percent of the issued and allotted share capital of Holdco, have been validly issued and allotted and each is fully paid or credited as fully paid .

(c) No Person has the right (whether exercisable now or in the future and whether or not contingent) to call for the allotment, conversion, redemption, repayment, issue, registration, sale or transfer of any share or loan capital or other securities giving rise to a right over or interest in, the capital of Holdco, under any option, agreement or other arrangement (including rights of pre-emption).

(d) Holdco is the sole legal and beneficial owner of the participatory interests in the Company representing 100 percent of the total participatory interests in the Company (the “ Holdco Participatory Interest ”), free and clear from all Encumbrances.

(e) No Person has the right (whether exercisable now or in the future and whether or not contingent) to call for the allotment, conversion, redemption, repayment, issue, registration, sale or transfer of any equity or loan capital or other securities giving rise to a right over or interest in, the capital of the Company, under any option, agreement or other arrangement (including rights of pre-emption).

Section 3.05 Proceedings . There are no:

(a) outstanding judgments, orders, injunctions or decrees of any governmental or regulatory body or arbitration tribunal against or affecting the Sellers;

(b) lawsuits, actions or proceedings pending or, to the warrantor’s knowledge, threatened against or affecting the Sellers; or

(c) investigations by any governmental or regulatory body which are pending or, to the warrantor’s knowledge, threatened against the Sellers;

and which, in each case of (a), (b), or (c), have a material effect on the ability of any of the Sellers to perform its obligations under this Agreement.

Section 3.06 Solvency . No order has been made, petition presented or meeting convened for the winding up of the Sellers, nor any other action taken in relation to the appointment of an administrator, liquidator, receiver, administrative receiver, compulsory manager or any provisional liquidator (or equivalent in any other jurisdiction) (or other process whereby the business is terminated and the assets of the company concerned are distributed amongst the creditors and/or shareholders or other contributors); in respect of the Sellers, there are no proceedings under any applicable insolvency, reorganisation or similar laws in any relevant jurisdiction against the Sellers, and no events have occurred which, under Applicable Laws, would justify any such proceedings.

EXECUTION VERSION

PART B – BUSINESS WARRANTIE S

Section 3.07 Organization; Qualification .

(a) The Company is a limited liability company duly organized and validly existing under the law of the Russian Federation and has all requisite power and authority to own, lease and operate the properties and assets it now owns, leases and operates. The Company is duly qualified and licensed to do business (to the extent required under Applicable Law) in the Russian Federation.

(b) Holdco is a limited liability company duly organized and validly existing under the law of Cyprus and has all requisite power and authority to own, lease and operate the properties and assets it now owns, leases and operates. Holdco is duly qualified and licensed to do business (to the extent required under Applicable Law) in Cyprus.

Section 3.08 No Default; Permits .

(a) Neither Target Company is in material default or violation of any term, condition or provision of (i) its Organizational Documents or (ii) any Applicable Law.

(b) Each Target Company possesses all Permits that are required for the conduct of its business. Neither Target Company is in material violation of any such Permit, and all such Permits are in full force and effect.

Section 3.09 Financial Statements .

(a) The Company RAS Annual Financial Statements as of and for the years ending 31 December 2014, 2015 and 2016, which have been placed in the Data Room, were each prepared in accordance with RAS.

(b) The Holdco IFRS Annual Financial Statements as of and for the years ending 31 December 2014, 2015 and 2016, which have been placed in the Data Room, present a true and fair view of the financial position and results of operations and cash flow of Holdco in accordance with IFRS, and have been prepared in accordance with IFRS.

(c) The accounting records of each Target Company are up-to-date and have, in all material respects, been maintained on a proper and consistent basis and in accordance with all Applicable Laws. They contain an accurate and complete record of all matters required to be entered in them or which are otherwise entered in them.

(d) The accounting records of each of the Company and Holdco are in the possession and under control of the Company and Holdco, respectively.

Section 3.10 Absence of Certain Changes . Since 31 December 2016, except as set forth in the Disclosure Letter or as permitted between the Signing Date and the Closing Date under Section 6.01 :

(a) each Target Company has been operating in the Ordinary Course of Business;

EXECUTION VERSION

(b) n either Target Company ha s acquired or disposed of any asset or agreed to acquir e or dispose of an asset other than in the Ordinary Course of Business or on arm’s length terms ;

Section 3.11 Taxes .

(a) Each Target Company has paid all Tax which it has become liable to pay and which has fallen due for payment, other than any liability for Tax which is being contested in good faith.

(b) Each Target Company has made all deductions, withholdings and retentions in respect of, or on account of, any Tax (including payroll Taxes) which it is obliged to make and accounted in full, where required to do so, to the appropriate Governmental Authority for all amounts so deducted or retained.

(c) All returns, computations, notices and information which are or have been required to be made or given by each Target Company for any Tax purpose have been made or given within the requisite periods and were, when made or given, correct in all material respects.

(d) Each Target Company has prepared, kept and preserved complete, accurate and up-to-date records and primary accounting documents as and to the extent required by the Tax Law for such periods as required under Tax Law.

(e) Each Target Company has at all times in all material respects complied with applicable transfer pricing rules under Applicable Law.

(f) Neither Target Company has any outstanding disputes with the Tax Authorities or is a party to any pending claims either at an administration level or in any court of law with any Tax Authority, in each case for the amounts of more than US$ 100,000 (one hundred thousand dollars).

(g) Neither Target Company will become liable to pay any Tax or suffer an alteration in the manner in which it is assessed to pay Tax, or lose any relief or allowance otherwise available to it as a result of Closing.

(h) Each Target Company is and has at all times been resident for Tax purposes in the jurisdiction in which it was incorporated and is not and has not at any time been treated as resident in any other jurisdiction for any Tax purpose (including for the purpose of any double Tax treaty).

Section 3.12 Environmental Matters .

(a) To the warrantor’s knowledge, the Company’s activities and operations are in compliance in all material respects with all Environmental Laws.

(b) The Company has not received (i) any written notice alleging any material liability in relation to any material breach of Environmental Laws; and (ii) any enforcement, prohibition, stop, remediation, improvement or any other notice from any Governmental Authority with regard to any material breach of Environmental Laws.

EXECUTION VERSION

(c) T he Company has no outstanding disputes with any Governmental Authority in relation to any alleged breach of Environmental Laws either at an administration level or in any court of law , in each case for the amount of more than US$ 10 0,000 ( one hundred thousand U.S. Dollars) .

Section 3.13 Intellectual Property .

(a) To the warrantor’s knowledge, the current and former activities of the Company do not infringe the Intellectual Property Rights of any third party in any material respect.

(b) To the warrantor’s knowledge, the Intellectual Property Rights owned by the Company are not being infringed, used in an unauthorised manner or opposed by any third party.

Section 3.14 Legal Compliance, Disputes and Investigations .

(a) No Target Company is engaged in any material litigation, administrative or arbitration proceedings, or other material proceedings or hearings, before any Governmental Authority or (to warrantor’s knowledge) is the subject of any material investigation, inquiry or enforcement proceedings by any Governmental Authority. To the warrantor’s knowledge, no such proceedings, investigation or enquiry have been threatened or are pending.

(b) To the warrantor’s knowledge, no Target Company has:

(i) made any direct or indirect unlawful payment to any foreign or domestic Governmental Authority or government official or employee in connection with its business;

(ii) paid any bribe, pay-off, influence payment or other unlawful payment in connection with its business; or

(iii) breached any anticorruption or anti-bribery Applicable Laws of any jurisdiction in connection with its business.

Section 3.15 Material Contracts .

(a) The Data Room contains complete, true and accurate copies of all Material Contracts of the Company and Holdco, including any amendments thereto.

(b) Neither the Company nor Holdco is in material default of any terms, condition or provision of any Material Contract, nor, to warrantor’s knowledge, is any counterparty.

(c) No Target Company is a party to any Material Contract that is not in the Ordinary Course of Business or not on an arm’s length basis.

For purposes of this Section 3.15 , “ Material Contracts ” means any Contract that requires or is likely to require consideration payable by or to the Target Company in excess of US$ 500,000 (five hundred thousand U.S. Dollars) in the aggregate over any twelve-month period.

EXECUTION VERSION

Section 3.16 Assets .

(a) The Company is the owner or lessee of all assets that are material to the business of the Company and used in the conduct of its business as currently conducted, and, in all material respects, has a good and marketable title to such assets and its title has been appropriately registered.

(b) All equipment in use by the Company and material to its operations is, in all material respects, in satisfactory condition and state of repair, subject to normal wear and tear.

Section 3.17 Property .

(a) The Properties comprise all the material land and buildings owned, leased, controlled, occupied or used by the Company. The Company is the registered owner or tenant (as applicable) of each Property as required by Applicable Law. The information in respect of the Properties set out in Schedule 2 ( Properties ) is accurate in all material respects.

(b) The Company holds all material technical documentation (including manuals and plans) that are required for the operation of the buildings listed in Schedule 2 ( Properties ).

(c) In relation to the Properties where the interest of the Company is based on a lease agreement: (i) there are no subsisting notices in writing alleging any material breach of any material covenant or condition contained in the lease agreement, on the part of the tenant; (ii) all the lease agreements are in full force; and (iii) to the warrantor’s knowledge, there are no material legal defects in the title or right of the landlord to grant such leases to the Company.

Section 3.18 Financial Indebtedness . No Target Company has given or entered into any guarantee or other Encumbrance security agreement or arrangement or is responsible for the indebtedness, or for the default in the performance of any obligation, of any other Person.

Section 3.19 Related Parties . Except as set forth in the Disclosure Letter, there is no outstanding material indebtedness or other liability, actual or contingent, between a Target Company and the Parent Group, and there is no Material Contract between a Target Company and the Parent Group.

Section 3.20 Employees and Management .

(a) Other than as set forth in the Disclosure Letter, no Employee has budgeted annual remuneration (including bonus) from any Target Company in excess of RUB 6,000,000 (six million roubles) in 2017.

(b) No Target Company is obliged to, or has made any provision to increase or vary, any Employee’s salary, bonus, or other remuneration, which would in aggregate increase the Target Companies’ total costs in respect of all Employees by more than 5 per cent per annum.

EXECUTION VERSION

(c) Other than any amounts payable by the Parent Group, n o Target Company has any share incentive scheme, equity-linked scheme or profit-sharing scheme for the benefit of any director or Employee.

(d) Other than as set forth in the Disclosure Letter, the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby will not (other than any amounts payable by the Parent Group): (i) entitle any current or former employee, consultant, director or shareholder of a Target Company to any payment; (ii) increase the amount of compensation due to any such person; or (iii) accelerate the vesting or funding of any compensation or other benefit for any such person.

(e) There are no collective bargaining agreements or other arrangements between any Target Company and any trade union, staff association, trade association, works council or other body representing employees.

(f) Each Target Company is not and has never been a party to any pension agreement or arrangement.

(g) The terms of all employment contracts of each Target Company comply in all material respects with Applicable Laws in the sphere of labour and employment.

Article IV
APPLICATION OF WARRANTIES

Section 4.01 Survival . The Warranties shall remain in full force and effect notwithstanding the Closing as set forth in Section 9.01(d) .

Section 4.02 The Warrantor’s Knowledge . In each Warranty set forth in Article III where any statement is qualified as being made to the warrantor’s knowledge or any similar expression to that effect such shall mean to the actual knowledge of the following individuals: Christopher Powell, Ernesto Bautista III and Don P. Conkle; each such person having made due and careful enquiries in relation to the matters being warranted .

Section 4.03 Disclosure .

(a) Disclosure . The Warranties are qualified to the extent of those matters Fairly Disclosed in the Disclosure Letter in accordance with this Section 4.03 , provided that no disclosure can be made against the Warranties set out in Section 3.18 ( Financial Indebtedness ). The Disclosure Letter shall, for the sake of convenience, be arranged in sections corresponding to the numbered sections contained in Article III , but any matter Fairly Disclosed shall be considered disclosed against all Warranties.

(b) Second Disclosure Letter . The Sellers may, at any time prior to 17:00 p.m. (Moscow time) on the second calendar day prior to the scheduled Closing Date, deliver to the Buyers the Second Disclosure Letter. Any matter Fairly Disclosed in the Second Disclosure Letter (in respect of any fact, matter, event or circumstance that arises after the date of this Agreement (but not before)) shall be considered disclosed against the Warranties when repeated immediately before Closing. The Second Disclosure Letter shall, for the sake of convenience, be arranged in sections corresponding to the numbered

EXECUTION VERSION

sections contained in Article III , but any matter F airly D isclosed shall be considered disclosed against all Warranties .

Article V
WARRANTIES OF THE BUYERs

Each of the warranties set out in this Article V shall be separate and independent and shall not be limited by reference to any other section of this Agreement save as expressly provided otherwise. The warranties set out in this Article V shall be deemed to be given at the date of this Agreement and shall be deemed to be repeated immediately before the Closing with reference to the facts then existing. The Buyers jointly and severally warrant to each Seller as follows:

Section 5.01 Organization; Authorization; Validity .

(a) Each Buyer is duly organized and validly existing and registered and in good standing under the Applicable Laws of its jurisdiction of organization.

(b) Each Buyer has full legal capacity, power and authority and has taken all corporate action required of it, to enter into this Agreement, carry out its obligations hereunder and consummate the transactions contemplated hereby. The execution, delivery and performance by each Buyer of this Agreement and the consummation by it of the transactions contemplated hereby, have been duly authorized on its part.

(c) This Agreement has been duly executed and delivered by each Buyer, and (assuming due and valid authorization, execution and delivery hereof by the Sellers) is a valid and binding obligation of each Buyer, enforceable against it in accordance with its terms, except enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally.

Section 5.02 No Violations . The execution, delivery or performance of this Agreement and the consummation by each Buyer of the transactions contemplated hereby do not and will not: (a) conflict with, or result in a breach of or default under, any terms or conditions of its Organizational Documents; (b) conflict with or violate any Applicable Law applicable to it; or (c) result in any violation, breach, conflict, default or event of default under the terms of any contract to which it is a party or by which its assets may be bound.

Section 5.03 Consents and Approvals . The execution, delivery and performance of this Agreement by each Buyer does not and will not require any consent, approval, authorization or other action by any third party or any Governmental Approval other than Competition Approval.

Section 5.04 Proceeds . The Buyers are, and will at all relevant times remain, able to pay the Purchase Price to the Sellers from their existing available cash resources.

Section 5.05 Proceedings . There are no:

(a) outstanding judgments, orders, injunctions or decrees of any governmental or regulatory body or arbitration tribunal against or affecting any Buyer;

EXECUTION VERSION

(b) lawsuits, actions or proceedings pending or threatened against or affecting any Buyer ; or

and which, in each case, have a material adverse effect on the ability of a Buyer to perform its obligations under this Agreement.

Section 5.06 Solvency . No order has been made, petition presented or meeting convened for the winding up of a Buyer, nor any other action taken in relation to the appointment of an administrator, liquidator, receiver, administrative receiver, compulsory manager or any provisional liquidator (or equivalent in any other jurisdiction) (or other process whereby the business is terminated and the assets of the company concerned are distributed amongst the creditors and/or shareholders or other contributors) in respect of a Buyer, there are no proceedings under any applicable insolvency, reorganisation or similar laws in any relevant jurisdiction against a Buyer, and no events have occurred which, under Applicable Laws, would justify any such proceedings.

Section 5.07 Sanctions . Each Buyer, and each beneficial owner of each Buyer, is not subject to any economic or trade sanction laws or regulations or restrictive measures enacted, administered or enforced by any governmental authority of the United States of America, and no Buyer is acting on behalf of any person so subject.

Article VI
COVENANTS

Section 6.01 Conduct of Business . From the Signing Date to the Closing Date, except as contemplated by this Agreement or as otherwise agreed to in writing by the Buyers, the Sellers shall procure that the Target Companies operate in the Ordinary Course of Business.

Section 6.02 Leakage . Except as agreed to in writing by the Buyers, each Seller undertakes that no Leakage other than Permitted Leakage will be paid to or benefitted by the Parent Group for the period from the Signing Date to the Closing Date.

Section 6.03 Gross-up . A ll sums payable by one Party (the payor) to another Party (the payee) under or in relation to this Agreement shall be paid free and clear of all deductions or withholdings for Taxes unless the deduction or withholding is required by Applicable Law. If any such amounts are required to be withheld or deducted from any such payment, the payor shall pay such additional amounts as may be necessary to ensure that the net amount actually received by the payee after such withholding or deduction is equal to the amount that the payee would have received had no such withholding or deduction been required; provided, however, that no such additional amounts shall be payable in respect of (i) any Taxes imposed on the payee by reason of any connection between the payee and the taxing jurisdiction other than entering into this Agreement and receiving payments hereunder, or (ii) any Taxes imposed by reason of payee’s failure to timely comply with any certification, identification, information, registration, documentation or other reporting requirement reasonably required by the payor if such compliance is required by law, regulation, administrative practice or an applicable treaty or agreement as a precondition to exemption from, or reduction in the rate of deduction or withholding of any Taxes for which the payor is

EXECUTION VERSION

required to pay additional amounts pursuant to this Agreement. If the payee pays any Taxes or other amounts that the payor is required to pay pursuant to this Section 6.03 , the payor shall reimburse it on demand in full in the currency in which such Taxes or other amounts are paid.

Section 6.04 Further Actions . Subject to the terms and conditions herein provided, each of the Parties hereto agrees to use its reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under all Applicable Laws to consummate and make effective the transaction contemplated by this Agreement.

Section 6.05 Rebranding . (a) As soon as reasonably practicable after the Closing and in any event by December 31, 2017, the Buyers shall:

(i) change the name of each of the Company and Holdco to a name which does not include the (i) CARBO Letters, (ii) any translation or transliteration of the CARBO Letters, (iii) any trademark, trade name or other mark belonging to the Sellers or their Affiliates, or (iv) any letters, trade name or trademark substantially or confusingly similar to any of the foregoing; and

(ii) cease to use or display, or assist others to use or display, any trademarks owned by the Sellers or their Affiliates (including any translation or transliteration thereof) or any mark or word which is substantially or confusingly similar therewith, whether as part of the Company’s (or Holdco’s) name, as trade names, trademarks, logos, domain names or otherwise.

(b) The Company and Holdco are hereby entitled to continue using until December 31, 2017 all “carbo.ru” and “carbo.com” email addresses (the “ Old Email Addresses ”) and email boxes (the “ Old Email Boxes ”) used by the Company, Holdco or their employees before the Closing (the “ Post-Closing Use ”), provided that the Buyers shall instruct the employees of the Company to forward any New Incoming Emails that relate to the business of CARBO Delaware or any of its Affiliates to the email address notified by a Seller to the Buyers for such purpose. The Post-Closing Use includes in particular: (i) full access to the information (including emails) stored in the Old Email Boxes including the right to copy, delete, amend, send (resend) or otherwise use this information, (ii) redirection of all incoming emails (the “ New Incoming Emails ”) from the Old Email Addresses to the email addresses to be notified by any of the Buyers to the Sellers (with or without copying of such incoming emails to the Old Email Boxes – this to be decided by the Buyers at their sole discretion and to be notified to the Sellers). The Sellers shall procure (i) the Post-Closing Use free of charge, (ii) that from the Closing no person or entity (including the Sellers and their employees) will have access to the information stored in the Old Email Boxes or to the New Incoming Emails except for the Company, Holdco or persons authorized by the Buyers (by notifying the Sellers of such persons), (iii) the deletion of all information from the Old Email Boxes (including all New Incoming Emails) without keeping any copies thereof (or parts thereof) upon expiration of the above specified period or earlier at the request of a Buyer with a provision of a written confirmation on the deletion of all information.

(c) For the avoidance of any doubt, the Company, Holdco, the Buyers and their Affiliates are entitled after the expiration of the above specified period and without any time limitations:

EXECUTION VERSION

(i) to use the current company names of the Company and Holdco (the “ Old Names ”) for reporting, information disclosure or in other cases when it is required by applicable law or in relation to any ongoing proceedings or matters that were commenced prior to the change of the company names (as required above) where it is difficult or impractical or impossible to use the new company names ;

(ii) to mention the Old Names in their documents, websites, or otherwise with reference that the Old Names were some time ago company names of the Company and Holdco;

(iii) to keep and use without any restrictions or limitations all the documents containing references to or mention of the Old Names and issued prior to the change of the company names (including reports, financial statements, etc.).

Section 6.06 Licensing .

(a) Subject to the provisions of Section 6.05 ( Rebranding ), at Closing, the Sellers shall procure the execution of a new patent and know-how use license agreement between the Company and CARBO Ceramics Inc. (in the form attached hereto as Exhibit B) to ensure that the Company is licensed to the extent necessary to be able to do business in the same manner as conducted by the Company before the Closing (the “License Agreement”).

(b) The Sellers and their Affiliates shall give all reasonable assistance to the Buyers to procure the registration of the License Agreement upon its execution in accordance with all Applicable Laws.

Section 6.07 Non-Solicitation .

(a) From the date hereof until the 3 ^rd (third) anniversary of the Closing Date, the Sellers shall not, and shall cause its Affiliates not to, directly or indirectly, without the prior written consent of the Buyers, solicit or induce any Key Employee (i) to become employed or engaged (whether as an employee, consultant or otherwise) by any Seller and/or its Affiliates (whether or not such employment or engagement would be in breach of his/her employment or other obligations) or (ii) to cease or modify their relationships with the Company in a manner adverse to the Company.

(b) If at any time any provision of Section 6.07 is or becomes illegal, invalid or unenforceable under the Applicable Laws of any jurisdiction, but would be legal, valid and enforceable if any part of that provision were deleted or the period or area of its application were reduced, such provision shall apply with such modification as may be necessary to make it legal, valid and enforceable.

EXECUTION VERSION

Article VII
CONDITIONS PRECEDENT

Section 7.01 Conditions Precedent for the Sellers and the Buyer . The obligations of the Sellers and the Buyers to consummate the transaction contemplated hereby are subject to:

(a) the satisfaction prior to the Closing Date of the condition that Competition Approval has been obtained and remains in effect; and

(b) no litigation has been initiated by any Governmental Authority in respect of the transaction contemplated hereby which has not been withdrawn and which would, if successful, prohibit or cause the consummation of such transaction to be unlawful; and

(c) no Governmental Authority has issued any ruling or decree (including an order of a court upon litigation brought by a third party), which remains outstanding and in force, that prohibits Closing hereunder.

Section 7.02 Conditions Precedent for the Buyer . The obligation of the Buyers to purchase the Purchase Shares is subject to the satisfaction at or prior to the Closing Date of each of the following conditions (unless satisfaction of any such condition is expressly waived, in whole or in part, by the Buyers in writing):

(a) Warranties . Notwithstanding any disclosure in the Second Disclosure Letter, no Critical Warranty shall be untrue or inaccurate in any respect when made or when repeated as of the Closing Date, and no other Warranty of the Sellers shall be untrue or inaccurate when made or when repeated as of the Closing Date to the extent, in the case of such other Warranties only (and not the Critical Warranties), that a Significant Loss arises. For the purposes of this Section 7.02(a) , a “Significant Loss” arises if the matter, event or circumstance that gives rise to the Warranty being untrue or inaccurate may reasonably be expected to result in one or more Warranty Claims which amount (in aggregate if more than one) to 20% (or more) of the Purchase Price.

(b) Performance . Each Seller shall have performed and complied with, in all material respects, the agreements, covenants, conditions and obligations required by this Agreement.

(c) Holdco Financial Indebtedness . As of Closing, Holdco has no Financial Indebtedness and its net working capital (as calculated under IFRS and with reference to the relevant line items in respect of all accounts payable and accounts receivable in its financial statements) equals to zero.

(d) No Material Adverse Effect . Since the Signing Date, no event or circumstance shall have occurred or arisen that has a Material Adverse Effect (including no such event or circumstance has been disclosed in the Second Disclosure Letter) .

Section 7.03 Conditions Precedent for the Sellers . The obligation of the Sellers to consummate the transaction contemplated hereby is subject to the satisfaction at or prior to the Closing Date of each of the following conditions (unless satisfaction of any such condition is expressly waived, in whole or in part, by the Sellers in writing):

EXECUTION VERSION

(a) Warranties . Each of the warranties of each Buyer shall be true and accurate, in each case when made and as of the Closing Date as if made at and as of such time.

(b) Performance . Each Buyer shall have performed and complied with, in all material respects, the agreements, covenants, conditions and obligations required by this Agreement.

(c) Transfer . Each Buyer has provided to the Sellers the information necessary for the submission by the Sellers of a transfer order for the transfer of the Purchase Shares to such Buyer under this Agreement.

Section 7.04 Satisfaction of Conditions Precedent . The Sellers and the Buyers shall use their reasonable efforts to procure that the condition in Section 7.01(a) is satisfied as soon as reasonably practicable after the date hereof and shall promptly notify each other of the satisfaction of such condition, together with evidence as may be reasonably requested by the other Parties. The Sellers shall use their reasonable efforts to procure that the conditions in Section 7.02 are satisfied as soon as reasonably practicable after the date hereof and shall promptly notify the Buyers of the satisfaction of each such condition, together with evidence as may be reasonably requested by the Buyers. The Buyers shall use their reasonable efforts to procure that the conditions in Section 7.03 are satisfied as soon as reasonably practicable after the date hereof and shall promptly notify the Sellers of the satisfaction of each such condition, together with evidence as may be reasonably requested by the Sellers.

Article VIII
TERMINATION

Section 8.01 Termination . Notwithstanding anything herein or elsewhere to the contrary, this Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to Closing:

(a) by written agreement of the Parties;

(b) by a Buyer if:

(i) the Closing shall not have occurred on or before the Long Stop Date provided, however, that the Buyers may not terminate this Agreement pursuant to this Section 8.01(b)(i) if the failure of the Buyers to perform any of the agreements, covenants and obligations required to be performed at or prior to the Closing by the Buyers, or the failure of the Buyers to satisfy any condition precedent, has been the primary cause of, or the primary factor that resulted in, the failure of the Closing to occur on or before such date;

(ii) a Seller materially breaches or fails to perform or comply with any of its covenants and agreements contained herein; or

(iii) an event or circumstance has occurred or arisen since the Signing Date that has a Material Adverse Effect; or

(iv) there is a material breach by the Sellers of any of the Critical Warranties.

EXECUTION VERSION

(i) the Closing shall not have occurred on or before the Long Stop Date provided, however, that the Sellers may not terminate this Agreement pursuant to this Section 8.01(c)(i) if the failure of the Sellers to perform any of their agreements, covenants and obligations required to be performed at or prior to the Closing, or the failure of the Sellers to satisfy any condition precedent, has been the primary cause of, or the primary factor that resulted in, the failure of the Closing to occur on or before such date; or

(ii) a Buyer materially breaches or fails to perform or comply with any of its covenants and agreements contained herein; or

(iii) there is a material breach by a Buyer of any of its warranties; or

(iv) the Advance has not been timely paid and remains unpaid.

Section 8.02 Effect of Termination . In the event of the termination of this Agreement as provided in Section 8.01 , written notice thereof shall forthwith be given to the other Parties specifying the provision hereof pursuant to which such termination is made. The Parties shall have no further liability or obligation under this Agreement except in respect of claims which arose before or gave rise to termination. The following provisions of this Agreement shall survive termination and remain in full force and effect: Article I ( Definitions ), Section 2.02 ( Advance ) , this Section 8.02 , Section 9.01 ( Limitations on Liability ), Article X ( Miscellaneous ) and Article XI ( Governing Law and Arbitration ).

Article IX
LIMITATIONS ON LIABILITY

Section 9.01 Limitations on Liability .

(a) Minimum Claim . None of the Sellers shall have any liability in respect of any Warranty Claim made by the Buyers (other than in respect of any of the Critical Warranties and the Tax Warranties for which this paragraph (a) shall not apply): (i) if such Warranty Claim is less than US$100,000 (one hundred thousand U.S. dollars) (“ De Minimis Claims ”); and (ii) unless and until the liability in respect of the Warranty Claim when aggregated with the liability in respect of all other Warranty Claims made by the Buyer (excluding De Minimis Claims and excluding Claims in respect of the Critical Warranties and the Tax Warranties) exceeds US$1,000,000 (one million U.S. dollars), in which case the Buyers may claim for the whole amount and not merely the excess.

(b) Maximum Liabilities .

(i) The maximum aggregate liability of the Sellers in respect of any and all Claims shall not exceed the Purchase Price.

(ii) Without prejudice to paragraph (i) above, the aggregate liability of the Sellers for Warranty Claims (other than in respect of any of the Critical Warranties and the Tax Warranties for which this paragraph (ii) shall not apply) shall not exceed 50% of the Purchase Price.

EXECUTION VERSION

(c) Application of C ash . The Parties agree that the amount of cash held by the Target Companies at Closing may be applied by the Sellers to offset any Claims.

(d) Time Limitations . The Sellers will not be liable in respect of:

(i) a Warranty Claim (other than in respect of the Tax Warranties and the Critical Warranties) unless a Buyer has served a written notice on the Sellers on or before 30 June 2019;

(ii) any Claims in respect of the Tax Warranties unless a Buyer has served a written notice on the Sellers on or before 30 June 2021;

(iii) any other Claims (including any Claim in respect of the Critical Warranties) unless a Buyer has served a written notice on the Sellers on or before 30 June 2020,

in each case setting out in reasonable detail the facts, matters or circumstances giving rise to the Claim, and the relevant Buyer’s then best estimate of the amount of the Claim, and provided further that such Buyer has properly issued and served proceedings in respect of any Claim:

(A) where a Claim relates to a contingent liability or a liability which is not capable of being quantified, within six (6) months of such liability ceasing to be contingent and becoming an actual liability, or of such liability becoming capable of being quantified, as the case may be; or

(B) in all other cases, within six (6) months of serving such written notice.

(e) No Liability for Consequential or Indirect Damages . No Party shall be liable to the other Party (including under any Warranty Claim) for any loss of business, goodwill, contracts, profits or revenue or for any consequential, incidental, special or indirect loss or damage or punitive or exemplary damages.

(f) Boxing of Tax Warranties . Each Buyer acknowledges and agrees that the only Warranties given in relation to Taxation are the Tax Warranties, and no claim can be made in relation to Tax under any Warranty that is not a Tax Warranty.

(g) Matters Disclosed . No Seller shall be liable for any Warranty Claim (other than in respect of a Critical Warranty, for which this paragraph (g) does not apply) if and to the extent that the fact, matter, event or circumstance giving rise to such Warranty Claim has been Fairly Disclosed in the Disclosure Letter or in any of the documents placed in the Data Room.

(h) Matters Provided for in the Financial Statements/Closing Accounts . No Seller shall be liable for any Warranty Claim if and to the extent that the fact, matter, event or circumstance giving rise to such Warranty Claim is: (i) expressly disclosed, allowed, provided for or reserved for in the Company RAS Annual Financial Statements as of and for the year ending 31 December 2016 or the Holdco IFRS Financial Statements as of and for the year ending 31 December 2016 or (ii) addressed by the Closing Accounts as contemplated by Section 2.04 ( Consideration Adjustment ).

EXECUTION VERSION

(i) Matters Capable of R emedy . If a fact or circumstance that gives rise to a Claim is capable of remedy, the Seller s will not be liable in respect of that Claim to the extent that the relevant breach is remedied within thirty (3 0) calendar days following notification of the fact or circumstance by a Buyer to the Seller s under paragraph (d) above.

(j) Contingent Liabilities . If any Claim is based upon a liability which is contingent only, the Sellers shall not be liable unless and until such contingent liability gives rise to an obligation to make a payment. This is without prejudice to the right of a Buyer to give notice of the Claim in accordance with Section 9.01(d) before such time.

(k) No liability for Warranty Claims arising from acts or omissions of Buyers . No Seller shall be liable for any Warranty Claim to the extent that it would not have arisen but for, or has been increased or not reduced as a result of, any voluntary, act, omission or transaction carried out by a Buyer and/or its Affiliates.

(l) No Liability for Retrospective Legislation or Changes in Rates of Tax . The Sellers shall not be liable in respect of any Claims to the extent that such Claims are attributable to, or such Claims are increased as a result of, any legislation not in force at the date hereof or to any change of law, rates of tax, regulation, directive, requirements or administrative practice, which in each case is not in force at the date hereof.

(m) No Double Recovery . No Buyer shall be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity more than once in respect to one shortfall, damage, deficiency, breach or other set of circumstances that give rise to one or more Claims.

(n) Subsequent Recovery . Where a Seller has made a payment in discharge to a Buyer in relation to any Warranty Claim and any Buyer (including the Target Companies) is entitled to recover (whether by insurance, payment, discount, credit, relief or otherwise) from a third party a sum which indemnifies or compensates any Buyer (in whole or in part) in respect of the liability or loss which is the subject of a Warranty Claim, each Buyer shall: (i) promptly notify such Seller of the fact and provide such information as the Seller may reasonably require; (ii) take all reasonable steps or proceedings as such Seller may require to enforce such right; and (iii) pay to the relevant Seller(s) as soon as reasonably practicable after receipt any amount recovered in excess of the Losses incurred by the Buyers (taking into account such payment in discharge), less any reasonable costs and expenses incurred by a Buyer or its Affiliate (if any) in recovering or receiving the same and any Tax suffered on the recovery or receipt thereof.

(o) Duty to Mitigate . Each Buyer shall use reasonable steps to avoid or mitigate any loss or damage which it may suffer in consequence of any breach by a Seller of the terms of this Agreement.

(p) No Exclusion for Fraud . Nothing in this Agreement shall limit or exclude the liability of any Party in the case of its fraud.

(q) Remedies under Contract . Each Buyer acknowledges and agrees that the only remedy available to it for breach of any provision of this Agreement shall be for damages in breach of contract under the terms of this Agreement, and not rescission of this Agreement or damages in tort or under any statute (whether under the Misrepresentation Act 1967 or otherwise) nor any other remedy.

EXECUTION VERSION

Section 9.02 Conduct of Claims . If a Buyer becomes aware of any claim, action or demand made against it by a third party that could give rise to a Claim (a “ Third Party Claim ” ):

(a) such Buyer shall, as soon as reasonably practicable, notify the Sellers setting out the relevant facts and circumstances relating to the Third Party Claim (to the extent such information is available to such Buyer);

(b) such Buyer shall keep the Sellers informed of all material developments in relation to the Third Party Claim (to the extent such information is available to such Buyer); and

(c) such Buyer shall make no settlement or compromise or admission or liability relating to the Third Party Claim without the prior written consent of the Sellers, which consent shall not be unreasonably withheld or delayed.

Article X
MISCELLANEOUS

Section 10.01 Waivers and Amendments . No modification of or amendment to this Agreement shall be valid unless set forth in an instrument in writing signed by each of the Parties. Any waiver of any term or condition of this Agreement must be set forth in an instrument in writing signed by the waiving Party and must refer specifically to the term or condition to be waived and to the circumstances of such waiver. No such waiver shall be deemed to constitute a waiver applicable either to other circumstances involving the same term or condition or to any other term or condition of this Agreement.

Section 10.02 Notices .

(a) All notices, consents and other communications hereunder shall be in writing and in the English language and shall have been duly given:

(i) when delivered by hand or by courier; or

(ii) when successfully transmitted by electronic mail (with a confirming copy of such communication to be sent as provided in paragraph (a)(i)),

to the Party for whom intended, at the address or e-mail address of such Party set forth below (or at such other address or e-mail address for a Party as shall be specified by like notice):

(A)

If to the Sellers:


Attention:	Ernesto Bautista III and Christopher Powel
Address:	CARBO Ceramics Inc. Energy Center II 575 N. Dairy Ashford Rd. Suite 300 Houston, Texas, USA TX 77079

EXECUTION VERSION


E-mail addresses:	ernesto.bautista@carboceramics.com; christopher.powell@carboceramics.com

with a copy to:

Attention:	Scott Senecal and Maxim Izvekov
Address:	Cleary Gottlieb Steen & Hamilton LLC Paveletskaya Square 2/3 Moscow 115054
E-mail address:	ssenecal@cgsh.com ; mizvekov@cgsh.com

(B)

If to the Buyers:


Attention:	Yury A. Semenov
Address:	Petro Welt Technologies AG Kärntner Ring 11-13, 1010 Vienna, Austria
E-mail address:	Yury.Semenov@pewete.com

with a copy to:

Attention:	Alyona Kucher
Address:	Debevoise & Plimpton LLP Business Center Mokhovaya 4/7 Vozdvizhenka St., bldg. 2 Moscow, 125009
E-mail address:	ankucher@debevoise.com

(b) Any notice or other communication not received on a Business Day in the city of the recipient or received after 17:00 hours local time on a Business Day in the city of the recipient shall be deemed to be received on the next following Business Day in the city of the recipient.

Section 10.03 Counterparts . This Agreement may be executed in multiple counterparts, all of which shall together be considered one and the same agreement.

Section 10.04 Entire Agreement .

(a) This Agreement (including the documents and the instruments referred to herein) constitutes the entire agreement and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. In the event of any inconsistency between this Agreement and any document executed or delivered to effect the purposes of this Agreement, this Agreement shall govern as among the Parties.

(b) Each Party confirms on behalf of itself and its Affiliates that in entering into this Agreement it has not relied on any representation, warranty, assurance, covenant, indemnity, undertaking or commitment which is not expressly set out or referred to in this Agreement.

EXECUTION VERSION

Section 10.05 Severability .

(a) If for any reason one or more of the provisions or undertakings of this Agreement shall be held to be invalid but would have been held to be valid if part of the wording of the same was deleted or the period or scope of the same reduced, then the said provisions or undertakings of this Agreement shall apply with such deletion or modification as may be necessary to make them valid and effective.

(b) Without prejudice to Section 10.05(a) , the illegality, invalidity or unenforceability of any provision of this Agreement under the laws of any jurisdiction shall not affect its legality, validity or enforceability under the laws of any other jurisdiction, nor the legality, validity or enforceability of any other provisions of this Agreement. The Parties shall then use all reasonable endeavours to replace the illegal, invalid or unenforceable provisions by a legal, valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the illegal, invalid or unenforceable provision.

Section 10.06 Confidentiality .

(a) The Parties agree that the existence and contents of this Agreement, the transactions contemplated hereby, and the information relating to such transactions (including the information shared with a Buyer during its due diligence process) (the “ Information ”) is confidential and disclosure thereof shall be limited to the Parties and the Parties’ Affiliates and their respective employees, agents, representatives or advisors, as applicable, on a need-to-know basis for the sole purpose of implementing the proposed transactions. The Parties shall take reasonable steps to assure that their Affiliates, employees, agents, representatives and advisors comply with the provisions of this Section 10.06.

(b) In the event that a Party is required by legal process, a Governmental Authority or otherwise by operation of law to disclose any of the Information, it shall provide prompt notice of such requirement to the other Parties so that the other Parties may seek a protective order or other appropriate remedy. Such Party will disclose only that portion of the Information which it is legally required to disclose. Such Party may also rely on advice of legal counsel with respect to its obligations of disclosure as contemplated in this Section 10.06 .

(c) The obligations of the Parties provided for in this Section 10.06 shall survive two (2) years after the termination of this Agreement.

(d) The provisions of Section 10.06(a) will not apply to the Information:

(i) which is or becomes generally available to the public;

(ii) which is or becomes lawfully available from a source other than the Parties or their representatives without any obligation restricting use or disclosure; or

(iii) which that Party lawfully possessed prior to obtaining it from another Party.

EXECUTION VERSION

(e) Subject to paragraph (b) above, no Party will make or cause to be made any press or public announcements about this Agreement, its subject matter or the transactions contemplated hereby; unless otherwise mutually agreed. In any event, the form and content of any announcement shall be jointly reviewed by the Parties .

Section 10.07 Third Party Rights . No term of this Agreement may be enforced by a person who is not a Party to this Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 or otherwise.

Section 10.08 Assignment . Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties (whether by operation of law or otherwise) without the prior written consent of the other Parties, and any assignment in contravention of this requirement shall be null and void. This Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective permitted successors and assigns.

Section 10.09 Expenses . Each Party to this Agreement shall bear its own expenses incurred in connection with the negotiation, preparation, execution and performance of this Agreement.

Section 10.10 Language . Although this Agreement may be translated into other languages, any non-English version of this Agreement is for informational purposes only. In the event of any discrepancies between the English and any non-English version of this Agreement or any dispute regarding the interpretation of any provision in the English or any non-English version of this Agreement, the English version of this Agreement shall prevail and questions of interpretation shall be addressed solely in the English language.

Section 10.11 Conversion . Any amounts to be paid under this Agreement shall be paid in U.S. Dollars (unless the Parties agree otherwise). If any amounts require to be converted from U.S. Dollars to Rubles or from Rubles to U.S. Dollars in connection with this Agreement, the Parties shall use the applicable US$ Conversion Rate.

Section 10.12 Agreement Survives Closing . This Agreement (other than obligations that have already been fully performed) remains in full force after Closing. The rights and remedies of the Parties shall not be affected by Closing.

Section 10.13 No Partnership . Nothing in this Agreement or in any document referred to in it shall constitute any of the Parties a partner of any other, nor shall the execution, and implementation of this Agreement confer on any Party any power to bind or impose any obligations to any third parties on the other Party or to pledge the credit of the other Party.

Article XI
GOVERNING LAW AND ARBITRATION

Section 11.01 Governing Law . This Agreement and all non-contractual or other obligations arising out of or in connection with it shall be governed by and construed in accordance with English law, without reference to its principles of conflicts of law.

EXECUTION VERSION

Section 11.02 Arbitration .

(a) The Parties agree that any dispute or difference of whatever nature howsoever arising out of, or in connection with, this Agreement (including a dispute or difference as to the breach, existence, termination or validity of this Agreement) (each, a “ Dispute ”) shall (regardless of the nature of the Dispute) be referred to and finally settled by arbitration at the London Court of International Arbitration (the “ LCIA ”) in accordance with the LCIA Arbitration Rules (the “ Rules ”) (which rules are deemed to be incorporated by reference into this Section 11.02 ).

(b) The arbitration shall be conducted by three (3) arbitrators (the “ Arbitral Tribunal ”). The claimant(s) shall nominate one arbitrator; the respondent(s) shall nominate jointly the second arbitrator; and a third arbitrator, who shall serve as Chairman, shall be appointed by the two Party-appointed arbitrators within thirty (30) calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the LCIA in accordance with the Rules. In the event an appointed arbitrator may not continue to act as an arbitrator of such panel, then the Party(ies) that appointed such arbitrator shall have the right to appoint a replacement arbitrator in accordance with the provisions of this Section 11.02 . The seat of arbitration shall be London, England. The arbitration proceedings shall be conducted and the award or decision (the “ Award ”) of the arbitrators shall be rendered in the English language.

(c) In addition to the authority conferred on the arbitration tribunal by the Rules, the arbitration tribunal shall have the authority to order such production of documents as may reasonably be requested by each of the Parties to the arbitration or by the tribunal itself. In addition to the authority conferred on the arbitration tribunal by the Rules, the arbitration tribunal shall have the authority to make such orders for interim relief, including injunctive relief, as it may deem appropriate. The Parties agree that any ruling by the arbitration tribunal on interim measures shall be deemed to be a final award with respect to the subject matter thereof and shall be fully enforceable as such.

(d) The arbitrators shall have the authority to assess the costs and expenses of the arbitration proceeding (including, but not limited to, attorneys’ fees and expenses) against one or more of the non-prevailing Parties in whatever manner or allocation the arbitrators deem appropriate.

(e) By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings and the enforcement of any Award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a national court, the Arbitral Tribunal established hereunder shall have full authority to grant provisional remedies, to order that a Party request that a national court vacate or modify any provisional relief granted by such court, and to award damages for the failure of any Party to respect the Arbitral Tribunal’s orders to that effect.

(f) The Award shall be final and binding upon the Parties as from the date rendered, and shall be the sole and exclusive remedy between the Parties regarding any Disputes presented to the Arbitral Tribunal. Judgment upon any Award may be entered in any court having jurisdiction thereof.

EXECUTION VERSION

(g) The Parties waive any rights of application or appeal to any court or tribunal of competent jurisdiction to the fullest extent permitted by law in connection with any question of law arising in the course of arbitration or with respect to any Award made except for actions to enforce this Agreement to arbitrate or an arbitral Award and except for actions seeking interim or other provisional relief to prevent irreparable harm or in aid of arbitration proceedings in any court of competent jurisdiction.

(h) Any monetary award shall be made and payable free of any tax, deduction or offset. Each Party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30 ^th ) calendar day following the date of the Award or such other date as the Award may provide. The Arbitral Tribunal shall have the authority to award any remedy or relief proposed by a claimant or respondent in accordance with the terms of this Agreement, including a declaratory judgment, specific performance of any obligation created under this Agreement or the issuance of an injunction.

(i) If more than one arbitration is begun under this Agreement, any Arbitral Tribunal constituted under this Agreement may, upon request of any Party to any of the arbitration proceedings, make an order, with the approval of the LCIA, if it considers it appropriate in the interests of justice and efficiency, that the ongoing arbitration proceedings be consolidated in one set of arbitration proceedings (a “ Consolidation Order ”). Any such request shall be made as soon as reasonably practical with written notice to all Parties to the arbitration proceedings concerned. If two or more Arbitral Tribunals constituted under this Agreement make a Consolidation Order, the Consolidation Order made first shall prevail. If two or more arbitration proceedings are consolidated under a Consolidation Order, the Arbitral Tribunal having first made the Consolidation Order shall proceed as the Arbitral Tribunal in the consolidated proceedings. The appointment of the other Arbitral Tribunal(s) shall terminate upon making of the Consolidation Order by the first Arbitral Tribunal and the other Arbitral Tribunal(s) shall be deemed to be functus officio , and the first Arbitral Tribunal shall have responsibility for determining how the cost of all other consolidated proceedings are allocated amongst the Parties. The Parties to any disputes which are the subject of a Consolidation Order shall be deemed to have participated in the constitution of the Arbitral Tribunal in the consolidated proceedings and agree that they shall be bound by any award made by the Arbitral Tribunal in the consolidated proceedings.

(j) Without prejudice to Section 11.02(i) above, claims arising out of or in connection with this Agreement may be made in a single arbitration.

[ Remainder of page intentionally left blank. Signature page follows. ]

EXECUTION VERSION

IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first written above.

Petro Welt Technologies AG
/s/ Yury A. Semenov
Name:Yury A. Semenov
Title: CEO

/s/ Valeriy V. Inyushin
Name:Valeriy V. Inyushin
Title: CFO
PeWeTe Evolution Limited
/s/ Androulla Papadopoulou
Name:Androulla Papadopoulou
Title: Director

/s/ Eliana Giannakou Hadjisavva
Name:Eliana Giannakou Hadjisavva
Title: Director
CARBO Ceramics (Mauritius) Inc.
/s/ Ernesto Bautista III
Name:Ernesto Bautista III
Title: Director
[seal]
CARBO LLC
/s/ Ernesto Bautista III
Name:Ernesto Bautista III
Title: Vice President and Treasurer

EXECUTION VERSION

Exhibit B
Patent and Know-how Use License Agreement

PATENT (INVENTIONS) & KNOW-HOW USE LICENSE AGREEMENT	ЛИЦЕНЗИОННЫЙ ДОГОВОР О ПРЕДОСТАВЛЕНИИ ПРАВА ИСПОЛЬЗОВАНИЯ ПАТЕНТОВ (ИЗОБРЕТЕНИЙ) И НОУ-ХАУ
This Patent (Inventions) & Know-how Use License Agreement (the “ Agreement ”) is made on ________________________, by and between CARBO Ceramics Inc., a legal entity incorporated and existing under the laws of Delaware with its registered address at Corporation Trust Center 1209 Orange St., Wilmington, DE 19801, U.S., postal address: 575 N. Dairy Ashford Rd., Ste. 300, Houston, Texas, U.S. 77079 ( “ Licensor ” ) , and CARBO Ceramics (Eurasia) LLC, a legal entity incorporated and existing under the laws of the Russian Federation, having its registered address at 11 Etkulsky Road, Kopeysk, Chelyabinsk Region, 456658 Russian Federation (“ Licensee ”), (individually a “ Party ” and collectively the “ Parties ” ) .	Настоящий Лицензионный договор о предоставлении права использования патентов (изобретений) и ноу-хау (« Договор ») заключен ________________________ КАРБО Керамикс Инк. ( CARBO Ceramics Inc. ), юридическим лицом, учрежденным и существующим в соответствии с законодательством штата Делавэр, зарегистрированным по адресу США, 19801, штат Делавэр, Вильмингтон, Орандж Стрит, 1209, Корпорейшн Траст Центр ( Corporation Trust Center 1209 Orange St., Wilmington, DE 19801, U.S. ), почтовый адрес: США, 77079, штат Техас, Хьюстон, Оф. 300, Н. Дэйри Эшфорд Роуд, 575 ( 575 N. Dairy Ashford Rd., Ste. 300, Houston, Texas, U.S. 77079 ) (« Лицензиар »), и ООО «КАРБО Керамикс (Евразия)», юридическим лицом, учрежденным и существующим в соответствии с законодательством Российской Федерации, зарегистрированным по адресу Российская Федерация, 456658, Челябинская обл., г. Копейск, Еткульский пр-д, д. 11 (« Лицензиат »), (по отдельности именуемыми « Сторона », а совместно – « Стороны »).
RECITALS	ПРЕАМБУЛА
WHEREAS, Licensor is the owner of the Technology (as defined below) related to the production of ceramic proppant on the territory of the Russian Federation;	ПОСКОЛЬКУ Лицензиар является собственником Технологии (согласно определению ниже), связанной с производством керамических проппантов на территории Российской Федерации;
WHEREAS, Licensee desires to obtain, and Licensor has agreed to grant, the right to use the Technology under the terms of this Agreement.	ПОСКОЛЬКУ Лицензиат желает получить, и Лицензиар соглашается предоставить, право использования Технологии в соответствии с условиями настоящего Договора,
NOW, THEREFORE, in consideration of the promises and of the mutual agreements herein contained, the Parties hereby agree as follows:	НАСТОЯЩИМ, ТЕМ САМЫМ, учитывая обязательства и взаимные договоренности, содержащиеся в настоящем Договоре, Стороны подписали соглашение о нижеследующем:

EXECUTION VERSION

ARTICLE 1 DEFINITIONS	СТАТЬЯ 1. ОПРЕДЕЛЕНИЯ
Section 1.1. Definitions . For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.1 .	Пункт 1.1 Определения . Для целей настоящего Договора следующие термины имеют значения, указанные или упомянутые в настоящем Пункте 1.1 .
“ Affiliate ” means with respect to any Person: (i) any Person in which such first Person has a direct or indirect Controlling Interest; (ii) any other Person that directly, or through one or more intermediaries, is a Controlling Person of such first Person; and (iii) any other Person that has the same direct or indirect Controlling Person as such first Person.	« Аффилированное лицо » означает в отношении любого Лица: (i) любое Лицо, в котором такое первое Лицо владеет прямо или косвенно Контролирующей долей участия; (ii) любое иное Лицо, которое прямо или через одного или более посредников является Контролирующим лицом такого первого Лица; и (iii) любое иное Лицо, которое имеет, прямо или косвенно, то же Контролирующее лицо, что и такое первое Лицо.
“ Applicable Law ” means with respect to any Person, any domestic or foreign law, ordinance, policy, guidance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree or any requirement of any Governmental Authority, in each case applicable to such Person.	« Применимое право » означает, в отношении любого Лица, любой внутренний или иностранный закон, ордонанс, политику, руководство, норму, административное толкование, положение (регламент), приказ, судебный приказ, судебный запрет, указание (директиву), судебное решение, указ или любое требование любого Государственного органа, в каждом случае применимые к такому Лицу.
“ Arbitral Tribunal ” has the meaning given to such term in Section 9.7 .	« Арбитраж » имеет значение, приведенное для данного термина в Пункте 9.7 .
“ Award ” has the meaning given to such term in Section 9.7 .	« Арбитражное решение » имеет значение, приведенное для данного термина в Пункте 9.7 .
“ Bank of Russia ” means the Central Bank of the Russian Federation.	« Банк России » означает Центральный банк Российской Федерации.
“ Consolidation Order ” has the meaning given to such term in Section 9.7 .	« Приказ об объединении » имеет значение, приведенное для данного термина в Пункте 9.7 .

EXECUTION VERSION

“ Controlling Interest ” means: (a) the ownership or control, direct or indirect, of 50% or more of the issued share capital or voting rights of a Person; (b) an ownership interest of 50% or more of a partnership or being the general partner of a partnership; (c) a right to appoint a majority of directors, executive officers or other applicable governing body of a Person; or (d) the legal power to direct or cause the direction of the general management and policies of a Person.	« Контролирующая доля участия » означает: (a) собственность или контроль, прямые или косвенные, в отношении 50% или более от выпущенного акционерного капитала или прав голоса Лица; (b) долю участия в размере 50% или более в товариществе, или статус полного товарища в товариществе; (c) право назначать большинство директоров, исполнительных должностных лиц или членов иного применимого органа управления Лица; или (d) правомочие определять направление или обеспечивать определение направления общего управления и политики Лица.
“ Controlling Person ” means, with respect to any Person (other than a natural person), any other Person which has a Controlling Interest in such Person.	« Контролирующее лицо » означает, в отношении любого Лица (помимо физических лиц), любое иное Лицо, обладающее Контролирующей долей участия в таком Лице.
“ Dispute ” has the meaning given to such term in Section 9.7 .	« Спор » имеет значение, приведенное для данного термина в Пункте 9.7 .
“ Effective Date ” has the meaning given to such term in Section 5.1 .	« Дата вступления в силу » имеет значение, приведенное для этого термина в Пункте 5.1 .
“ Governmental Authority ” means any executive, judicial, legislative, administrative, branch, ministry, department, agency, office, organization, authority or other body (including any state pension, medical and social insurance funds) of any federal, national, state or local governmental authority or union of any such government authorities (other than any commercial entity acting in a commercial capacity).	« Государственный орган » означает любой орган исполнительной, судебной, законодательной власти, административный орган, отделение, министерство, департамент, агентство, ведомство, организацию, управление или иной орган (включая любые государственные пенсионные фонды и фонды медицинского и социального страхования) любого федерального, национального, государственного органа или местного государственного органа или объединения любых таких государственных органов (помимо любых коммерческих предприятий, действующих в коммерческих целях).
“ Information ” has the meaning given to such term in Section 8.1 .	« Информация » имеет значение, приведенное для данного термина в Пункте 8.1 .
“ Improvements ” means any modification, adaptation, invention, update or other improvement relating to any item of the Products, component or part thereof, or the Technology, made during the term of this Agreement.	« Усовершенствования » означает любую модификацию, приспособление, изобретение, обновление или иное улучшение, относящиеся к любому Продукту, его компоненту или части, или к Технологии, осуществленные в течение срока действия настоящего Договора.
“ Know-how ” means information described in Exhibit B .	« Ноу-хау » означает информацию, описанную в Приложении B.

EXECUTION VERSION

“ LCIA ” has the meaning given to such term in Section 9.7 .	« ЛМАС » имеет значение, приведенное для данного термина в Пункте 9.7 .
“ Patents ” means the patents listed in Exhibit A .	« Патенты » означает патенты, перечисленные в Приложении А .
“ Person ” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental entity or any entity with legal capacity recognized by any Applicable Law.	« Лицо » означает физическое лицо, товарищество, корпорацию, деловой траст, акционерное общество, траст, объединение без образования юридического лица, совместное предприятие, государственный орган или лицо, обладающее правоспособностью, признаваемой любым Применимым правом.
“ Products ” means the products that are produced by the Licensee as of the date hereof with the use of the Technology.	« Продукты » означает продукты, производимые Лицензиатом по состоянию на дату настоящего Договора с использованием Технологии.
“ Rospatent ” means the Federal Service for Intellectual Property.	« Роспатент » означает Федеральную службу по интеллектуальной собственности.
“ Rubles ” or “ RUB ” means the lawful currency of the Russian Federation from time to time.	« Рубли » или « руб. » означает законную валюту Российской Федерации на соответствующий момент времени.
“ Rules ” has the meaning given to such term in Section 9.7 .	« Регламент » имеет значение, приведенное для данного термина в Пункте 9.7 .
“ Russian Civil Code ” means the Civil Code of the Russian Federation (the Part I dated November 30, 1994, the Part II dated January 26, 1996, the Part III dated November 26, 2001 and the Part IV dated December 18, 2006), as amended.	« ГК РФ » означает Гражданский кодекс Российской Федерации (Часть I от 30 ноября 1994 г., Часть II от 26 января 1996 г., Часть III от 26 ноября 2001 г. и Часть IV от 18 декабря 2006 г.), с учетом изменений и дополнений.
“ State Registration ” has the meaning given to such term in Section 5.2 .	« Государственная регистрация » имеет значение, приведенное для данного термина в Пункте 5.2 .
“ Technology ” means the Patents and the Know-how.	« Технология » означает Патенты и Ноу-хау.
“ Territory ” means the Russian Federation.	« Территория » означает Российскую Федерацию.
“ U.S. Dollars ” or “ US$ ” means the lawful currency of the United States of America from time to time.	« Доллары США » или « долл. США » означает законную валюту Соединенных Штатов Америки на соответствующий момент времени.
“ US$ Conversion Rate ” means, for any date, the official exchange rate for the conversion of U.S. Dollars (US$) into Rubles (RUB) (or Rubles (RUB) into U.S. Dollars (US$), as applicable) quoted by the Bank of Russia for, and effective on, such date.	« Обменный курс доллара США » означает, для любой даты, официальный обменный курс доллара США (долл. США) на рубли (руб.) (или рублей (руб.) на доллары США (долл. США), в зависимости от обстоятельств), установленный Банком России для такой даты и действующий по состоянию на такую дату.
ARTICLE 2 LICENSE	СТАТЬЯ 2. ЛИЦЕНЗИЯ
Section 2.1. Technology License .	Пункт 2.1 Лицензия на Технологию .

EXECUTION VERSION

(a) Subject to Section 2.1(b) , the Licensor hereby grants the Licensee an exclusive, non-sublicenseable and non-transferable right and license to:	(a) С учетом Пункта 2.1(b) , Лицензиар настоящим предоставляет Лицензиату исключительное, не подлежащее сублицензированию и передаче право и лицензию на:
(i) manufacture Products under or using the Technology within the Territory during the term of this Agreement; and	(i) производство Продуктов по, или с применением, Технологии на Территории в течение срока действия настоящего Договора; и
(ii) market, sell and distribute such Products within the Territory by the Licensee or its Affiliates.	(ii) предложение, продажу и распространение таких Продуктов на Территории Лицензиатом или его Аффилированными лицами.
(b) The Licensor shall have the right to, market, sell and distribute its own products produced under or using the Technology, within the Territory.	(b) Лицензиар обладает правом предлагать, продавать и распространять на Территории свои собственные продукты, произведенные по, или с применением, Технологии.
(c) In connection with such license, the Licensor shall not be required to prepare any drawings, specifications or other documents that are not in the possession of the Licensor.	(c) В связи с такой лицензией Лицензиар не обязан готовить какие-либо чертежи, спецификации или иные документы, которыми Лицензиар не обладает.
(d) In the event that the Agreement is terminated, then this license shall immediately terminate.	(d) В случае прекращения действия настоящего Договора действие лицензии незамедлительно прекращается.
Section 2.2. Improvements . If during the term of this Agreement Licensor conceives of or develops any Improvements, the Licensor shall not be obliged to inform the Licensee on such Improvements or grant the Licensee with a license or any other right to use such Improvements.	Пункт 2.2 Усовершенствования . Если в течение срока действия настоящего Договора Лицензиар придумывает или разрабатывает какие-либо Усовершенствования, то Лицензиар не обязан уведомлять Лицензиата о таких Усовершенствованиях или предоставлять Лицензиату лицензию или какое-либо иное право на использование таких Усовершенствований.
Section 2.3. Permits . The Licensee shall be responsible for obtaining all licenses and permits and for satisfying all formalities as may be required to manufacture, market, sell and distribute the Products within the Territory in accordance with Applicable Law.	Пункт 2.3 Разрешения . Лицензиат несет ответственность за получение всех лицензий и разрешений, а также за выполнение всех формальностей, которые могут требоваться для производства, предложения, продажи и распространения Продуктов на Территории в соответствии с Применимым правом.
ARTICLE 3 PAYMENTS	СТАТЬЯ 3. ПЛАТЕЖИ
Section 3.1. Consideration . The license under this Agreement is provided on a free-of-charge basis.	Пункт 3.1 Встречное предоставление . Лицензия по настоящему Договору предоставляется безвозмездно.
Section 3.2. Sale Prices . The Licensee may sell Products at such prices as Licensee, in its sole discretion, shall determine.	Пункт 3.2 Цена продажи . Лицензиат вправе продавать Продукты по таким ценам, которые Лицензиат определит сам по своему исключительному усмотрению.

EXECUTION VERSION

Section 3.3. Taxes and Duties . The Licensee shall be solely responsible for and shall pay, or reimburse the Licensor for, all taxes, duties, import deposits, assessments and other governmental charges, however designated, which are now or hereafter imposed under or by any Governmental Authority or agency, that are associated with (a) the performance by the Licensee of its obligations hereunder, or (b) the Products or their manufacture, sale or use.	Пункт 3.3 Налоги и пошлины . Лицензиат несет единоличную ответственность и обязанность по уплате или возмещению Лицензиару всех налогов, пошлин, импортных депозитов, отчислений и иных государственных сборов, независимо от их наименования, которые на настоящий момент установлены или будут установлены в будущем любым Государственным органом или ведомством и которые связаны с (a) исполнением Лицензиатом его обязательств по настоящему Договору, или (b) Продуктами или их производством, продажей или использованием.
ARTICLE 4 INTELLECTUAL PROPERTY ENFORCEMENT	СТАТЬЯ 4. ПРИНУДИТЕЛЬНОЕ ИСПОЛНЕНИЕ ПРАВ НА ИНТЕЛЛЕКТУАЛЬНУЮ СОБСТВЕННОСТЬ
Section 4.1. Enforcement of Intellectual Property Rights . If the Licensee becomes aware that any intellectual property rights comprising Technology are being infringed or misused by a third party in the Territory, the Licensee shall promptly notify the Licensor of such infringement or misuse. The Licensee shall, at its own expense, bring all necessary actions to cease such infringement or misuse. When the Licensee brings any such action, the Licensor shall provide such reasonable assistance as the Licensee may request. All damages, profits, awards and royalties obtained in connection with such action shall be for the sole benefit of the Licensee.	Пункт 4.1 Принудительное исполнение прав на интеллектуальную собственность . Если Лицензиату становится известно о нарушении или неправомерном использовании любых прав на интеллектуальную собственность, составляющую Технологию, со стороны третьего лица на Территории, Лицензиат обязан незамедлительно уведомить Лицензиара о таком нарушении или неправомерном использовании. Лицензиат обязан за свой счет подать все необходимые иски для прекращения такого нарушения или неправомерного пользования. При подаче Лицензиатом какого-либо подобного иска Лицензиар обязан оказать такое разумное содействие, которое может запросить Лицензиат. Все убытки, прибыль, взыскания и роялти, полученные в связи с таким иском, принадлежат исключительно Лицензиату.
Section 4.2. Maintenance of Intellectual Property .	Пункт 4.2 Поддержание в силе прав интеллектуальной собственности .
(a) The Licensor hereby grants the Licensee with all rights to keep the Technology valid in the Territory and pay all related necessary fees in the Territory (including patent maintenance fees).	(a) Лицензиар настоящим наделяет Лицензиата всеми правами, необходимыми для поддержания Технологии в силе на Территории и уплаты всех требуемых в связи с этим платежей на Территории (включая платежи на поддержание в силе патента).

EXECUTION VERSION

(b) The Licensor hereby authorizes the Licensee to take all necessary actions required to maintain and protect the Technology in the Territory, and the Licensee hereby undertakes to promptly take all such necessary actions (at Licensee’s expense) and waives its rights to recover any costs for them from the Licensor. The Licensee shall promptly inform the Licensor of all such actions it takes. The Licensor hereby authorizes the Licensee to take action to prolong the life of the Patents (at the cost of the Licensee), and Licensee shall promptly notify the Licensor of any such action and/or prolongation.	(b) Лицензиар настоящим уполномочивает Лицензиата совершать все необходимые действия, требуемые для поддержания в силе и охраны Технологии на Территории, и Лицензиат настоящим обязуется оперативно совершать все такие необходимые действия (за счет Лицензиата) и отказывается от прав на взыскание каких-либо расходов на них с Лицензиара. Лицензиат обязан незамедлительно уведомлять Лицензиара обо всех таких совершаемых им действиях. Лицензиар настоящим уполномочивает Лицензиата совершать действия для продления срока Патентов (за счет Лицензиата), и Лицензиат обязан незамедлительно уведомлять Лицензиара о любом таком действии и/или продлении.
ARTICLE 5 EFFECTIVE DATE AND REGISTRATION	СТАТЬЯ 5. ДАТА ВСТУПЛЕНИЯ В СИЛУ И РЕГИСТРАЦИЯ
Section 5.1. Effective Date . This Agreement is effective from the date of its execution (the “ Effective Date ”).	Пункт 5.1 Дата вступления в силу . Настоящий Договор вступает в силу с даты его заключения (« Дата вступления в силу »).
Section 5.2. Registration .	Пункт 5.2 Регистрация .
(a) The license for the use of the Patents under this Agreement is subject to state registration in Rospatent pursuant to Article 1232 of the Russian Civil Code (the “ State Registration ”).	(a) Лицензия на пользование Патентами по настоящему Договору подлежит государственной регистрации в Роспатенте в соответствии со статьей 1232 ГК РФ (« Государственная регистрация »).
(b) The Licensee shall submit to Rospatent the application for (and all other documents and information necessary for) the State Registration not more than fifteen calendar days after the Effective Date.	(b) Лицензиат обязан подать в Роспатент заявку на Государственную регистрацию (а также все иные документы и информацию, необходимые для этого) не позднее, чем через пятнадцать календарных дней после Даты вступления в силу.
(c) Concurrently with the State Registration, the Licensee shall also notify Rospatent on the termination of rights that were granted by the Licensor to the Licensee under the Patent (Inventions) & Know-how Use License Agreement of March 27, 2008 (as amended) and the Trademark Use License Agreement of March 27, 2008 (as amended).	(c) Одновременно с Государственной регистрацией Лицензиат также обязан уведомить Роспатент о прекращении прав, которые были предоставлены Лицензиаром Лицензиату по Лицензионному договору о предоставлении права использования изобретений и ноу-хау от 27 марта 2008 г. (с учетом изменений) и Лицензионному договору о предоставлении права использования товарного знака от 27 марта 2008 г. (с учетом изменений).
(d) The Licensee shall bear all costs and expenses incurred in its compliance with this Section 5.2 .	(d) Лицензиат несет все расходы и затраты, связанные с исполнением его обязательств по настоящему Пункту 5.2 .

EXECUTION VERSION

(e ) The Licensor shall give all reasonable assistance to the Licensee in connection with registration and notification procedures under paragraphs (b) and (c) above.	(e) Лицензиар обязан оказывать все разумное содействие Лицензиату в связи с процедурами регистрации и уведомления, предусмотренными пунктами (b) и (c) выше.
ARTICLE 6 INDEMNITY	СТАТЬЯ 6. ГАРАНТИЯ ВОЗМЕЩЕНИЯ УБЫТКОВ
Section 6.1. Indemnity .	Пункт 6.1 Гарантия возмещения убытков .
(a) To the fullest extent permitted by Applicable Law, the Licensor shall not be liable to the Licensee for any costs, expenses, loss or damage (whether direct, indirect or consequential and whether economic or other) arising from the Licensee’s exercise of the rights granted to it under this Agreement.	(a) В максимальной степени, допустимой в соответствии с Применимым правом, Лицензиар не обязан возмещать Лицензиату какие-либо расходы, издержки, ущерб или убытки (будь то прямые, косвенные или сопутствующие, и экономические или иные), возникающие из осуществления Лицензиатом прав, предоставленных ему по настоящему Договору.
(b) The Licensee shall indemnify the Licensor against all liabilities, costs, expenses, damages or losses (except for any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity basis) and all other professional costs and expenses) suffered or incurred by the Licensor arising out of or in connection with this Agreement, including:	(b) Лицензиат обязуется гарантировать возмещение Лицензиару всех денежных обязательств, расходов, издержек, убытков или ущерба (за исключением любых прямых или косвенных сопутствующих убытков, упущенной выгоды, ущерба репутации и любых процентов, штрафов и расходов на юридические услуги (рассчитанных исходя из полного возмещения убытков) и иных расходов и издержек на привлечение специалистов), понесенных или оплаченных Лицензиаром и возникающих из или в связи с настоящим Договором, включая:
(i) the Licensee’s exercise of the rights granted to it under this Agreement;	(i) осуществление Лицензиатом прав, предоставленных ему по настоящему Договору;
(ii) the Licensee’s breach or negligent performance or non-performance of this Agreement, including any claim relating to Products manufactured, supplied or put into use by the license under this Agreement;	(ii) нарушение или небрежное исполнение или неисполнение Лицензиатом настоящего Договора, включая любые права требования, связанные с Продуктами, произведенными, поставленными или запущенными в оборот посредством лицензии по настоящему Договору;
(iii) any claim made against the Licensor by a third party arising out of or in connection with Products.	(iii) любое право требования, заявляемое против Лицензиара третьим лицом и возникающее из или в связи с Продуктами.

EXECUTION VERSION

Section 6.2. Gross-up . If a payment due from the Licensee under this Article 6 is subject to tax (whether by way of direct assessment or withholding at its source), the Licensor shall be entitled to receive from the Licensee such amounts as shall ensure that the net receipt, after tax, to the Licensor in respect of the payment is the same as it would have been were the payment not subject to tax.	Пункт 6.2 Перерасчет . В случае, если платеж, причитающийся от Лицензиата по настоящей Статье 6 , облагается налогом (будь то прямо или посредством удержания у его источника), Лицензиар вправе получать от Лицензиата такие суммы, которые обеспечат соответствие суммы чистых поступлений после уплаты налогов в пользу Лицензиара в отношении платежа сумме, которая была бы выплачена, если бы платеж не облагался налогом.
ARTICLE 7 TERM AND TERMINATION	СТАТЬЯ 7. СРОК ДЕЙСТВИЯ И ПРЕКРАЩЕНИЕ ДЕЙСТВИЯ
Section 7.1. Term . This Agreement shall remain in force until terminated as contemplated by Section 7.2 and Section 7.3 . The license granted hereunder in respect of particular Patents expires upon the expiration of the relevant Patent, and this Agreement shall terminate when all Patents have expired.	Пункт 7.1 Срок действия . Настоящий Договор действует до прекращения его действия в соответствии с положениями Пункта 7.2 и Пункта 7.3 . Лицензия, предоставленная по настоящему Договору в отношении конкретных Патентов, истекает по истечении соответствующего Патента, и настоящий Договор прекращается по истечении действия всех Патентов.
Section 7.2. Termination . This Agreement may be terminated:	Пункт 7.2 Прекращение действия . Действие настоящего Договора может быть прекращено:
(a) at any time by written agreement of the Parties;	(a) в любой момент путем письменного соглашения Сторон;
(b) fifteen calendar days following written notice from the Licensor to the Licensee in the event that the Licensee has materially breached and not cured its obligations hereunder.	(b) в течение пятнадцати календарных дней после даты письменного уведомления Лицензиара Лицензиату в случае существенного нарушения и неустранения нарушения Лицензиатом его обязательств по настоящему Договору.

EXECUTION VERSION

Section 7.3. Effect of Termination . Upon termination of this Agreement, all then remaining rights in and to the Technology shall revert to the Licensor and the Licensee shall immediately take prompt and effective action to cease use of the Technology and deliver to the Licensor all materials in Licensee's possession disclosing confidential information of the Licensor. The termination of this Agreement shall otherwise be without prejudice to any rights accruing to either Party under this Agreement prior to the date of termination including the right to seek all legal remedies available to either Party.	Пункт 7.3 Последствия прекращения действия . После прекращения действия настоящего Договора все сохраняющиеся на тот момент права на, и в отношении Технологии возвращаются Лицензиару, и Лицензиат обязан незамедлительно предпринять оперативные и эффективные меры для прекращения использования Технологии и передачи Лицензиару всех находящихся в распоряжении Лицензиата материалов, содержащих раскрытие конфиденциальной информации Лицензиара. В остальном действие настоящего Договора прекращается без ущерба для любых прав, предоставленных любой из Сторон по настоящему Договору до даты прекращения действия, включая право на обращение за всеми средствами правовой защиты, которыми обладает любая Сторона.
ARTICLE 8 CONFIDENTIALITY	СТАТЬЯ 8. КОНФИДЕНЦИАЛЬНОСТЬ
Section 8.1. Confidentiality .	Пункт 8.1 Конфиденциальность .
(a) The Parties agree that the existence and contents of this Agreement and any information relating to this Agreement (the “ Information ”) is confidential and disclosure thereof shall be limited to the Parties and the Parties’ Affiliates and their respective employees, agents, representatives or advisors, as applicable, on a need-to-know basis for the sole purpose of implementing the Agreement. The Parties shall take reasonable steps to assure that their Affiliates, employees, agents, representatives and advisors comply with the provisions of this Section 8.1 .	(a) Стороны соглашаются с тем, что существование и содержание настоящего Договора и любой информации, связанной с ним (« Информации ») являются конфиденциальными, и их раскрытие ограничивается Сторонами и Аффилированными лицами Сторон, а также их соответствующими работниками, агентами, представителями или консультантами, в зависимости от ситуации, при действительной необходимости ознакомления с ними исключительно для цели исполнения настоящего Договора. Стороны обязаны предпринять разумные действия по обеспечению того, чтобы их Аффилированные лица, работники, агенты, представители и консультанты соблюдали положения настоящего Пункта 8.1 .
(b) In the event that a Party is required by legal process, a Governmental Authority or otherwise by operation of law to disclose any of the Information, it shall provide prompt notice of such requirement to the other Party so that the other Party may seek a protective order or other appropriate remedy. Such Party will disclose only that portion of the Information which it is legally required to disclose. Such Party may also rely on advice of legal counsel with respect to its obligations of disclosure as contemplated in this Section 8.1 .	(b) В случае, если в рамках судебного разбирательства, по требованию Государственного органа или по иной причине в силу действия закона Сторона обязана раскрыть какую-либо часть Информации, она обязана незамедлительно уведомить о таком требовании другую Сторону с тем, чтобы другая Сторона имела возможность обратиться за вынесением охранного судебного приказа или предоставлением иного средства правовой защиты. Такая Сторона вправе раскрыть лишь ту часть Информации, которую она обязана раскрыть по закону. Такая Сторона вправе опираться на рекомендации юридических консультантов в отношении ее обязательств по раскрытию в соответствии с настоящим Пунктом 8.1 .
(c) The obligations of the Parties provided for in this Section 8.1 shall survive two (2) years after the termination of this Agreement.	(c) Обязательства Сторон, предусмотренные настоящим Пунктом 8.1 , сохраняются в силе в течение 2 (двух) лет после прекращения настоящего Договора.

EXECUTION VERSION

(d) The provisions of paragraph (a) above will not apply to the Information:	(d) Положения пункта (а) выше не применяются к Информации:
(i) which is or becomes generally available to the public;	(i) которая является или становится общеизвестной широкому кругу лиц;
(ii) which is or becomes lawfully available from a source other than the Parties or their representatives without any obligation restricting use or disclosure; or	(ii) которая является или становится на законных основаниях доступна из иного источника, помимо Сторон или их представителей, без какого-либо обязательства, ограничивающего использование или раскрытие; или
(iii) which that Party lawfully possessed prior to obtaining it from another Party.	(iii) которой такая Сторона на законных основаниях обладала до ее получения от другой Стороны.
(e) Subject to paragraph (b) above, no Party will make or cause to be made any press or public announcements about this Agreement, its subject matter or the transactions contemplated hereby; unless otherwise mutually agreed.	(e) С учетом пункта (b) выше ни одна из Сторон не вправе делать или допускать осуществление каких-либо заявлений в прессе или публичных заявлений о настоящем Договоре, его предмете или сделках, предусмотренных им, если Стороны взаимно не договорились об ином.
ARTICLE 9 MISCELLANEOUS	СТАТЬЯ 9. ПРОЧИЕ УСЛОВИЯ
Section 9.1. Amendment and Modification . This Agreement may be amended, modified, or supplemented only by written agreement signed by both of the Parties.	Пункт 9.1 Поправки и изменения . В настоящий Договор могут вноситься поправки, он может изменяться или дополняться только путем соглашения в письменной форме, подписанного обеими Сторонами.
Section 9.2. Survival . The following provisions of this Agreement shall survive termination and remain in full force and effect: Article 1 ( Definitions ), Section 7.3 ( Effect of Termination) , Article 8 ( Confidentiality ) and Article 9 ( Miscellaneous ).	Пункт 9.2 Сохранение в силе . Следующие положения настоящего Договора сохраняются в силе после прекращения его действия: Статья 1 ( Определения ), Пункт 7.3 ( Последствия прекращения действия) , Статья 8 ( Конфиденциальность ) и Статья 9 ( Прочие условия ).

EXECUTION VERSION

Section 9.3. Waiver of Compliance; Consents . Any failure of a Party to comply with any obligation, covenant, agreement, or condition herein may be waived by the other Party; provided, however, that any such waiver may be made only by a writing signed by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement, or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.	Пункт 9.3 Отказ от требований; согласия . В отношении любого случая неисполнения Стороной любого обязательства, одностороннего обязательства, договоренности или условия, предусмотренных настоящим Договором, другая Сторона вправе осуществить отказ от требований, при условии, однако, что любой такой отказ может быть осуществлен исключительно в письменной форме за подписью предоставляющей его Стороны, но при этом такой отказ или отказ от строгого соблюдения такого обязательства, одностороннего обязательства, договоренности или условия не предполагают отказ от, или лишение права на возражение в отношении любых последующих или иных случаев неисполнения.
Section 9.4. Assignment . This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. The Licensee may not assign any of its rights or obligations hereunder without the prior written consent of Licensor, and any purported assignment absent such consent shall be null and void.	Пункт 9.4 Уступка . Настоящий Договор и все его положения являются обязательными к исполнению и действуют в интересах их Сторон и их соответствующих правопреемников, и разрешенных цессионариев. Лицензиат не вправе уступать какие-либо из прав или обязательств по настоящему Договору без предварительного письменного согласия Лицензиара, и любая предположительная уступка без такого согласия ничтожна.
Section 9.5. Conversion . Any amounts to be paid under this Agreement shall be paid in U.S. Dollars (unless the Parties agree otherwise). If any amounts require to be converted from U.S. Dollars to Rubles or from Rubles to U.S. Dollars in connection with this Agreement, the Parties shall use the applicable US$ Conversion Rate (with reference to the date on which damages or an obligation to make payment arose).	Пункт 9.5 Конверсия валют . Любые суммы к уплате по настоящему Договору должны уплачиваться в долларах США (если Стороны не договорились об ином). Если какие-либо суммы требуют конвертации из долларов США в рубли или из рублей в доллары США в связи с настоящим Договором, Стороны обязаны использовать применимый Обменный курс доллара США (на дату, в которую возникли убытки или платежное обязательство).
Section 9.6. Governing Law . This Agreement and all non-contractual or other obligations arising out of or in connection with it shall be governed by and construed in accordance with English law, without reference to its principles of conflicts of law.	Пункт 9.6 Применимое право . Настоящий Договор и все внедоговорные или иные обязательства, возникающие из него, или в связи с ним, подчиняются и толкуются в соответствии с английским правом, без учета его коллизионных норм.
Section 9.7. Dispute Resolution .	Пункт 9.7 Разрешение споров .

EXECUTION VERSION

deemed to be incorporated by reference into this Section 9.7 ).

(a) Стороны договариваются о том, что любой спор или разногласие любого характера, возникающие из настоящего Договора, или в связи с ним (включая спор или разногласие о нарушении, существовании, прекращении или действительности настоящего Договора) (в каждом случае – « Спор »), должны передаваться и окончательным образом разрешаться путем арбитража в Лондонском международном арбитражном суде (« ЛМАС ») в соответствии с Арбитражным регламентом ЛМАС (« Регламент ») (и такой Регламент считается включенным в настоящий Пункт 9.7 путем отсылки).

(b) The arbitration shall be conducted by three (3) arbitrators (the “ Arbitral Tribunal ”). The claimant shall nominate one arbitrator; the respondent shall nominate the second arbitrator; and a third arbitrator, who shall serve as Chairman, shall be appointed by the two Party-appointed arbitrators within 30 calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the LCIA in accordance with the Rules. In the event an appointed arbitrator may not continue to act as an arbitrator of such panel, then the Party that appointed such arbitrator shall have the right to appoint a replacement arbitrator in accordance with the provisions of this Section 9.7 . The seat of arbitration shall be London, England. The arbitration proceedings shall be conducted and the award or decision (the “ Award ”) of the arbitrators shall be rendered in the English language.

(b) Арбитражное разбирательство проводится 3 (тремя) арбитрами (« Арбитраж »). Истец назначает одного арбитра, ответчик назначает второго арбитра, а третий арбитр, исполняющий функции Председателя, назначается двумя арбитрами, назначенными Сторонами, в течение 30 календарных дней с даты подтверждения назначения второго арбитра. Если какой-либо из арбитров не был назначен в сроки, предусмотренные настоящим Пунктом или Регламентом, то такой арбитр назначается ЛМАС в соответствии с Регламентом. В случае, если назначенный арбитр не может продолжать исполнять функции арбитра в таком составе арбитража, то Сторона, назначившая такого арбитра, вправе назначить ему замену в соответствии с положениями настоящего Пункта 9.7 . Местом ведения арбитражного разбирательства является Лондон, Англия. Арбитражное разбирательство ведется, и арбитражное решение (« Арбитражное решение ») выносится арбитрами на английском языке.

(c) В дополнение к полномочиям, предоставленным арбитражу Регламентом, арбитраж уполномочен распоряжаться о предоставлении таких документов, которые могут быть обоснованно запрошены каждой из Сторон арбитражного разбирательства или самим арбитражем. В дополнение к полномочиям, предоставляемым арбитражу Регламентом, арбитраж уполномочен выносить такие приказы об обеспечительных мерах, включая судебные запреты, которые он сочтет необходимыми. Стороны договариваются о том, что любое решение арбитража об обеспечительных мерах будет считаться окончательным арбитражным решением в отношении предмета спора и будет подлежать приведению в исполнение как таковое.

EXECUTION VERSION

(d) The arbitrators shall have the authority to assess the costs and expenses of the arbitration proceeding (including, but not limited to, attorneys’ fees and expenses) against the non-prevailing Party in whatever manner or allocation the arbitrators deem appropriate.	(d) Арбитры уполномочены оценивать сумму расходов и издержек на арбитражное разбирательство (включая, без ограничения, суммы вознаграждений и расходов юридических представителей) и возлагать их на проигравшую Сторону таким образом, или при таком распределении, которое арбитры сочтут уместным.
(e) By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings and the enforcement of any Award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a national court, the Arbitral Tribunal established hereunder shall have full authority to grant provisional remedies, to order that a Party request that a national court vacate or modify any provisional relief granted by such court, and to award damages for the failure of any Party to respect the Arbitral Tribunal’s orders to that effect.	(e) Предоставляя согласие на арбитраж, Стороны не желают лишить какой-либо суд юрисдикции на вынесение до-арбитражного судебного запрета, ареста или любого иного приказа в помощь арбитражному разбирательству, и на приведение в исполнение Арбитражного решения. Без ущерба для таких временных мер, которые могут быть доступны в рамках юрисдикции государственного суда, Арбитраж, формируемый в соответствии с настоящим Договором, имеет все полномочия на предоставление временных средств правовой защиты, вынесение приказа об обязании Стороны ходатайствовать в государственном суде об отмене или изменении каких-либо временных средств правовой защиты, предоставленных таким судом, а также на присуждение убытков за неисполнение любой Стороной приказов Арбитража в этой связи.
(f) The Award shall be final and binding upon the Parties as from the date rendered, and shall be the sole and exclusive remedy between the Parties regarding any Disputes presented to the Arbitral Tribunal. Judgment upon any Award may be entered in any court having jurisdiction thereof.	(f) Арбитражное решение является окончательным и имеет обязательную силу для Сторон с даты его вынесения, и является единственным и исключительным средством правовой защиты между Сторонами в отношении каких-либо Споров, переданных на рассмотрение Арбитража. Судебное решение по любому Арбитражному решению может выноситься любым судом, обладающим в отношении него юрисдикцией.

EXECUTION VERSION

(g) The Parties waive any rights of application or appeal to any court or tribunal of competent jurisdiction to the fullest extent permitted by law in connection with any question of law arising in the course of arbitration or with respect to any Award made except for actions to enforce this agreement to arbitrate or an arbitral Award and except for actions seeking interim or other provisional relief to prevent irreparable harm or in aid of

arbitration proceedings in any court of competent jurisdiction.

(g) Стороны отказываются от любых прав на подачу заявлений или жалоб в любой суд или третейский суд компетентной юрисдикции в максимальной степени, допустимой законом, в связи с любым вопросом права, возникающим в ходе арбитража, или в отношении любого вынесенного Арбитражного решения, кроме исков о принудительном исполнении настоящего арбитражного соглашения или Арбитражного решения, а также исков об обеспечительных или иных промежуточных мерах для предотвращения непоправимого ущерба или в помощь арбитражному разбирательству в любом суде компетентной юрисдикции.

(h) Any monetary award shall be made and payable free of any tax, deduction or offset. Each Party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) calendar day following the date of the Award or such other date as the Award may provide. The Arbitral Tribunal shall have the authority to award any remedy or relief proposed by a claimant or respondent in accordance with the terms of this Agreement, including a declaratory judgment, specific performance of any obligation created under this Agreement or the issuance of an injunction.

(h) Любое присуждение средств осуществляется и выплачивается без учета каких-либо налогов, вычетов или зачетов. Каждая Сторона, против которой Арбитражным решением предусмотрено денежное обязательство, обязана уплатить по этому обязательству в, или в срок до, 30 (тридцатый) календарный день с даты Арбитражного решения или любую иную дату, которая может быть предусмотрена Арбитражным решением. Арбитраж уполномочен присуждать любое средство правовой защиты или возмещение, предлагаемое истцом или ответчиком в соответствии с условиями настоящего Договора, включая решение об установлении факта, об исполнении в натуре обязательства, возникающего по настоящему Договору, или о вынесении судебного приказа.

EXECUTION VERSION

(i) If more than one arbitration is begun under this Agreement, any Arbitral Tribunal constituted under this Agreement may, upon request of any party to any of the arbitration proceedings, make an order, with the approval of the LCIA, if it considers it appropriate in the interests of justice and efficiency, that the ongoing arbitration proceedings be consolidated in one set of arbitration proceedings (a “ Consolidation Order ”). Any such request shall be made as soon as reasonably practical with written notice to all parties to the arbitration proceedings concerned. If two or more Arbitral Tribunals constituted under this Agreement make a Consolidation Order, the Consolidation Order made first shall prevail. If two or more arbitration proceedings are consolidated under a Consolidation Order, the Arbitral Tribunal having first made the Consolidation Order shall proceed as the Arbitral Tribunal in the consolidated proceedings. The appointment of the other Arbitral Tribunal(s) shall terminate upon making of the Consolidation Order by the first Arbitral Tribunal and the other Arbitral Tribunal(s) shall be deemed to be functus officio , and the first Arbitral Tribunal shall have responsibility for determining how the cost of all other consolidated proceedings are allocated amongst the parties. The parties to any disputes which are the subject of a Consolidation Order shall be deemed to have participated in the constitution of the Arbitral Tribunal in the consolidated proceedings and agree that they shall be bound by any award made by the Arbitral Tribunal in the consolidated proceedings.	(i) В случае возбуждения более одного арбитражного разбирательства по настоящему Договору, любой Арбитраж, сформированный по настоящему Договору, вправе, по просьбе любой из сторон любого из арбитражных разбирательств, вынести приказ, с одобрения ЛМАС, если он считает уместным в интересах правосудия и эффективности объединить текущие арбитражные разбирательства в одно арбитражное разбирательство (« Приказ об объединении »). Любая такая просьба должна заявляться в кратчайший разумно исполнимый срок с направлением письменного уведомления всем сторонам затронутых арбитражных разбирательств. Если Приказ об объединении вынесен двумя или более сформированными по настоящему Договору Арбитражами, то преимущественную силу имеет Приказ об объединении, вынесенный первым. Если на основании Приказа об объединении объединены два или более арбитражных разбирательства, то Арбитраж, первым вынесший Приказ об объединении, продолжает вести объединенное разбирательство. Назначение другого(их) Арбитража(ей) прекращается после вынесения Приказа об объединении первым Арбитражем, и полномочия остальных Арбитражей считаются прекращенными, при этом первый Арбитраж несет ответственность за определение того, каким образом должны быть распределены между сторонами расходы на все остальные объединенные разбирательства. Стороны по любым спорам, которые являются предметом Приказа об объединении, считаются участвовавшими в формировании Арбитража, ведущего объединенное разбирательство, и соглашаются на обязательную силу для них любого арбитражного решения, вынесенного Арбитражем в объединенном разбирательстве.
(j) Without prejudice to Section 9.7(i) above, claims arising out of or in connection with this Agreement may be made in a single arbitration.	(j) Без ущерба для Пункта 9.7(i) выше, требования, возникающие из, или в связи с настоящим Договором, могут заявляться в рамках одного арбитражного разбирательства.
Section 9.8. Counterparts . This Agreement has been made in three original counterparts, each having equal legal force and effect: one of which shall be given to each of the Parties, and one of which shall be given to Rospatent.	Пункт 9.8 Экземпляры . Настоящий Договор составлен в трех оригинальных экземплярах равной исковой силы: с предоставлением одного каждой из Сторон, и одного Роспатенту.
Section 9.9. Notices .	Пункт 9.9 Уведомления .
(a) All notices, consents and other communications hereunder shall be in writing and in the English language and shall have been duly given:	(a) Все уведомления, согласия и иные сообщения в соответствии с настоящим Договором должны быть составлены в письменной форме и на английском языке, и считаются надлежащим образом осуществленными:
(i) when delivered by hand or by courier; or	(i) при вручении лично или курьером; или
(ii) when successfully transmitted by electronic mail (with a confirming copy of such communication to be sent as provided in paragraph (a)(i)),	(ii) при успешной передаче по электронной почте (с направлением подтверждающей копии такого сообщения в соответствии с пунктом (a)(i)),

EXECUTION VERSION

to the Party for whom intended, at the address or e-mail address of such Party set forth below (or at such other address or e-mail address for a Party as shall be specified by like notice):	Стороне, которой оно адресовано по адресу или адресу электронной почты такой Стороны, указанным ниже (или по такому иному адресу или адресу электронной почты такой Стороны, которые будут сообщены подобным уведомлением):
(A) If to the Licensor:	(A) В случае направления Лицензиару:
Attention: Ernesto Bautista III and Christopher Powel	Вниманию: Эрнесто Баутисты III и Кристофера Пауэла
Address: CARBO Ceramics Inc. Energy Center II 575 N. Dairy Ashford Rd. Suite 300 Houston, Texas, USA TX 77079	Адрес: КАРБО Керамикс Инк. TX 77079 США, штат Техас, Хьюстон Оф. 300 Н. Дэйри Эшфорд Роуд, 575 Энерджи Центр II
E-mail address: ernesto.bautista@carboceramics.com; christopher.powell@carboceramics.com	E-mail: ernesto.bautista@carboceramics.com; christopher.powell@carboceramics.com
with a copy to:	с направлением копии:
Attention: Scott Senecal and Maxim Izvekov	Вниманию: Скотта Сенекала и Максима Извекова
Address: Cleary Gottlieb Steen & Hamilton LLC Paveletskaya Square 2/3 Moscow, 115054 Russia	Адрес: «Клири Готтлиб Стин энд Гамильтон ЛЛК» Павелецкая пл., 2/3 г. Москва 115054, Российская Федерация
E-mail address: ssenecal@cgsh.com ; mizvekov@cgsh.com	E-mail: ssenecal@cgsh.com ; mizvekov@cgsh.com
(B) If to the Licensee:	(B) В случае направления Лицензиату:
Attention: Yury A. Semenov	Вниманию: Юрия А. Семенова
Address: Petro Welt Technologies AG Kärntner Ring 11-13, 1010 Vienna, Austria	Адрес: Петро Велт Текнолоджис АГ Карнтнер Ринг 11-13, 1010 Вена, Австрия
E-mail address: Yury.Semenov@pewete.com	E-mail: Yury.Semenov@pewete.com
with a copy to:	с направлением копии:
Attention: Alyona Kucher	Вниманию: Алены Кучер
Address: Debevoise & Plimpton LLP Business Center Mokhovaya 4/7 Vozdvizhenka St., bldg. 2 Moscow, 125009 Russia	Адрес: Дебевойз энд Плимптон ЛЛП Бизнес центр «Моховая» Ул. Воздвиженка, 4/7, стр. 2, Москва, 125009 Российская Федерация
E-mail address: ankucher@debevoise.com	E-mail: ankucher@debevoise.com

EXECUTION VERSION

(b) Any notice or other communication not received on a business day or received after 17:00 hours local time on a business day in the city of the recipient shall be deemed to be received on the next following business day in the city of the recipient.	(b) Любое уведомление или иное сообщение, полученное в нерабочий день или полученное после 17 часов 00 минут по местному времени в рабочий день в городе получателя, будет считаться полученным на следующий рабочий день в городе получателя.
Section 9.10. Headings . The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.	Пункт 9.10 Заголовки . Заголовки статей и пунктов, приводимые в настоящем Договоре, приводятся исключительно для справки и никоим образом не влияют на смысл или толкование настоящего Договора.
Section 9.11. Entire Agreement . This Agreement and its Exhibits embodies the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter contained herein.	Пункт 9.11 Исчерпывающий характер Договора . Настоящий Договор и Приложения к нему представляют собой весь объем договоренностей и пониманий Сторон в отношении его предмета. Настоящий Договор заменяет все предшествующие договоренности и понимания между Сторонами в отношении его предмета.
Section 9.12. Severability . In case any provision of this Agreement becomes illegal, invalid or unenforceable in any respect under any Applicable Law, the Parties will negotiate in good faith in order to replace such illegal, invalid or unenforceable provision by a mutually acceptable provision that is legal, valid and enforceable and reflects the commercial purpose of the illegal, invalid or unenforceable provision as closely as possible.	Пункт 9.12 Делимость . В случае, если какое-либо положение настоящего Договора становится незаконным, недействительным или лишается исковой силы в любом отношении по Применимому праву, Стороны добросовестно вступают в переговоры для замены такого незаконного, недействительного или лишенного исковой силы положения взаимоприемлемым положением, которое является законным, действительным и обладает исковой силой, и в максимально близкой степени отражает коммерческую цель незаконного, недействительного или лишенного исковой силы положения.
Section 9.13. Exhibits . All Exhibits attached hereto are hereby incorporated in and made a part as if set forth in full herein.	Пункт 9.13 Приложения . Все Приложения к настоящему Договору настоящим включаются в, и признаются частью настоящего Договора, как если бы они были изложены в нем в полном объеме.
Section 9.14. Language . This Agreement is made in English and Russian languages. In case of any discrepancy between the English and the Russian texts, the text in the English language shall prevail. All communications to be made or given pursuant to this Agreement shall be in the English language.	Пункт 9.14 Язык . Настоящий Договор составлен на английском и русском языках. В случае какого-либо расхождения между текстами на английском и русском языке, преимущественную силу имеет текст на английском языке. Все сообщения, подлежащие осуществлению или направлению в соответствии с настоящим Договором, должны осуществляться или направляться на английском языке.
[Remainder of page intentionally left blank. Signature page follows.]	[Оставшаяся часть страницы намеренно оставлена пустой. Далее следует подписная страница.]

EXECUTION VERSION

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the effectiveness date.

В ПОДТВЕРЖДЕНИЕ ЧЕГО Стороны обеспечили заключение настоящего Договора в Дату вступления в силу.

CARBO CERAMICS INC. / КАРБО КЕРАМИКС ИНК. (CARBO CERAMICS INC.)

By / Подпись:

Name / ФИО:

Title / Должность:

CARBO Ceramics (Eurasia), LLC / ООО «КАРБО Керамикс (Евразия)»

By / Подпись:

Name / ФИО:

Title / Должность:

EXECUTION VERSION

EXHIBIT A PATENTS	ПРИЛОЖЕНИЕ A ПАТЕНТЫ
1. RU 2521680 (entitled “Proppant and its Application,” also known as the “Roslite” patent)	1. RU 2521680 (озаглавленный «Проппант и способ его применения», также известный как патент «Roslite»);
2. EA 007864 (entitled “Proppants and Method of Their Manufacturing”)	2. EA 007864 (озаглавленный «Проппанты и метод их изготовления»);
3. EA 006953 (entitled “Proppants, Method of Their Manufacturing and Application”)	3. EA 006953 (озаглавленный «Проппанты, способ их изготовления и применения»);
4. EA 008825 (entitled “Proppants and Method of Their Manufacturing”)	4. EA 008825 (озаглавленный «Проппанты и способ их изготовления»);
5. Any Russian or Eurasian patents or patent applications claiming priority to US 62/463315 (New Binder provisional patent application filed 2/24/2017)	5. Любые российские или евразийские патенты или заявки на выдачу патента, в отношении которых заявляется приоритет над US 62/463315 (заявка на временный патент на новое связующее вещество подана 24 февраля 2017 г.).

EXECUTION VERSION

EXHIBIT B KNOW-HOW	ПРИЛОЖЕНИЕ B НОУ-ХАУ
Foundry Media:	Литейный наполнитель:
1. Removal of MnO additive in foundry media because it has a harmful effect on sintering temperature;	1. Удаление оксида марганца (MnO) в качестве добавки в литейный наполнитель ввиду его негативного влияния на температуру спекания;
2. Size specifications needed for foundry media; and	2. Требования к размеру фракций литейного наполнителя; и
3. Third party test data for validating the quality of the produced foundry media.	3. Результаты независимых испытаний для подтверждения качества произведенного литейного наполнителя.
Resin Coated Proppant:	Проппант с полимерным покрытием:
1. All information, schematics, know-how, data, etc. provided by Daryl Johnson and Scott Woolfolk during 2013-2014 in furtherance of setting up resin-coating toll manufacturing in Russia	1. Вся информация, схемы, ноу-хау, данные и др., предоставленные Дэрилом Джонсоном и Скоттом Вулфолком в 2013-2014 гг. в поддержку создания в России производства по нанесению полимерного покрытия на давальческой основе
2. Quality control testing information and results provided by CARBO Technology center for samples having hot water immersion stability problems that were manufactured in Russia	2. Информация и результаты испытаний по контролю качества, предоставленные центром КАРБО Текнолоджи ( CARBO Technology ), для произведенных в России образцов с проблемами стабильности при погружении в горячую воду

Exhibit 31.1

Quarterly Certification

As required by Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

I, Gary A. Kolstad, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CARBO Ceramics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2017

/s/ Gary A. Kolstad

Gary A. Kolstad

President & CEO

Exhibit 31.2

Quarterly Certification

As required by Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

I, Ernesto Bautista III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CARBO Ceramics Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 27, 2017

/s/ Ernesto Bautista III

Ernesto Bautista III

Chief Financial Officer

Exhibit 32

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of CARBO Ceramics Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Dated: July 27, 2017


/s/ Gary A. Kolstad
Name:	Gary A. Kolstad
Title:	Chief Executive Officer

Dated: July 27, 2017


/s/ Ernesto Bautista III
Name:	Ernesto Bautista III
Title:	Chief Financial Officer

Exhibit 95

MINE SAFETY DISCLOSURE

For the three months ended June 30, 2017, the Company has the following mine safety information to report in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, in connection with the Eufaula, Alabama processing facility, the McIntyre, Georgia processing facility, the Toomsboro, Georgia processing facility, the Marshfield, Wisconsin processing facility, and the Millen, Georgia processing facility.

Mine or Operating Name/MSHA Identification Number	Section 104 S&S Citations (#)	Section 104(b) Orders (#)	Section 104(d) Citations and Orders (#)	Section 110(b)(2) Violations (#)	Section 107(a) Orders (#)	Total Dollar Value of MSHA Assessments Proposed ($) (1)		Total Number of Mining Related Fatalities (#)	Received Notice of Pattern of Violations Under Section 104(e) (yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)	Legal Actions Pending as of Last Day of Period (#)	Aggregate Legal Actions Initiated During Period (#)	Aggregate Legal Actions Resolved During Period (#)
Eufaula Facility MSHA ID 0102687 Eufaula, Alabama	1	0	0	0	0	$	925	0	No	No	0	0	0
McIntyre Facility MSHA ID 0901108 McIntyre, Georgia	0	0	0	0	0	$	0	0	No	No	0	0	0
Toomsboro Facility MSHA ID 0901164 Toomsboro, Georgia	0	0	0	0	0	$	0	0	No	No	0	0	0
Marshfield Facility MSHA ID 4703636 Marshfield, Wisconsin	0	0	0	0	0	$	116	0	No	No	0	0	0
Millen Facility MSHA ID 0901232 Millen, Georgia	0	0	0	0	0	$	0	0	No	No	0	0	0
Totals	1	0	0	0	0	$	1,041	0			0	0	0

(1)

Amounts represent the total dollar value of proposed assessments received and/or outstanding at the end of June 30, 2017.