EXHIBIT 1.2
LYONDELL CHEMICAL COMPANY
ARCO CHEMICAL TECHNOLOGY, INC.,
ARCO CHEMICAL TECHNOLOGY, L.P.
and
LYONDELL CHEMICAL NEDERLAND, LTD.,
as Guarantors
$278,000,000
11 1/8% Senior Secured Notes due 2012
UNDERWRITING AGREEMENT
June 26, 2002
June 26, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Credit Suisse First Boston Corporation
As representatives (the
"Representatives") of the
several Underwriters listed in
Schedule B hereto
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Lyondell Chemical Company, a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule B
hereto (the "Underwriters"), an aggregate of $278,000,000 in principal amount of
its 11 1/8% Senior Secured Notes due 2012 (the "Notes") subject to the terms and
conditions set forth herein. The Notes are to be issued pursuant to the
provisions of an indenture (the "Indenture"), to be dated as of the Closing Date
(as defined below), among the Company, the Guarantors (as defined below) and The
Bank of New York, as trustee (the "Trustee").
The Notes will be guaranteed (the "Subsidiary Guarantees") by ARCO
Chemical Technology, Inc., a Delaware corporation ("ACTI"), ARCO Chemical
Technology, L.P., a Delaware limited partnership ("ACTLP") and Lyondell Chemical
Nederland, Ltd., a Delaware corporation (together with ACTI and ACTLP, the
"Guarantors"). Obligations in respect of the Notes (the "Indenture Obligations")
will be secured on an equal and ratable basis with indebtedness under the Credit
Agreement dated as of July 23, 1998 among the Company, the lenders party
thereto, JPMorgan Chase Bank, as administrative agent, and the syndication
agent, documentation agents, arranger and co-arrangers named therein (as amended
heretofore, the "Credit Agreement"), the Company's 9 5/8% Senior Secured Notes,
Series A, due 2007, 9 7/8% Senior Secured Notes, Series B, due
2007 and 9 1/2% Senior Secured Notes due 2008 (the "Existing Secured Notes")
and certain other debt of the Company (the "Existing ARCO Chemical Debt") and
certain obligations owed to the Pension Benefit Guaranty Corporation pursuant to
a settlement (the "PBGC Settlement") by perfected liens on certain of the
Company's personal property, all of the stock of the Company's domestic
subsidiaries directly owned by the Company, 65% of the stock of the Company's
foreign subsidiaries directly owned by the Company and certain of the Company's
manufacturing plants pursuant to the security agreements, pledge agreements,
mortgages and deeds of trust listed on Schedule A hereto (the "Security
Documents"). The parties to the Security Documents have agreed to amend the
Security Documents (the "Security Documents Amendment") to add the holders of
the Notes as secured parties.
The Company and the Guarantors have prepared and filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement (the file number of which is 333-88348) on Form S-3,
relating to the Notes and certain other equity and debt securities (the "Shelf
Securities") to be issued from time to time by the Company and the Guarantors.
The Company and the Guarantors also have filed with, or proposes to file with,
the Commission pursuant to Rule 424 under the Securities Act a prospectus
supplement specifically relating to the Notes. The registration statement as
amended to the date of this Agreement is hereinafter referred to as the
"Registration Statement" and the related prospectus covering the Shelf
Securities in the form first used to confirm sales of the Notes is hereinafter
referred to as the "Basic Prospectus". The Basic Prospectus as supplemented by
the prospectus supplement specifically relating to the Notes in the form first
used to confirm sales of the Notes is hereinafter referred to as the
"Prospectus". If the Company and the Guarantors have filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement. Any reference in this Agreement to the Registration Statement, the
Basic Prospectus, any preliminary form of Prospectus (a "preliminary
prospectus") previously filed with the Commission pursuant to Rule 424 or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act which
were filed under the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Exchange Act")
on or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and
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include any documents filed under the Exchange Act after the date of this
Agreement, or the date of the Basic Prospectus, any preliminary prospectus or
the Prospectus, as the case may be, which are deemed to be incorporated by
reference therein.
The parties to the Credit Agreement have agreed to amend and restate
the Credit Agreement on the terms set forth in the Prospectus (the "Credit
Agreement Amendment"). The Credit Agreement Amendment sets forth certain
conditions precedent to the effectiveness thereof, including the sale of the
Notes. The effectiveness of the Credit Agreement Amendment in accordance with
its terms is a condition precedent to the purchase and sale of the Notes under
this Agreement.
The Company has sent a notice of prepayment to certain lenders under
the term loan facility of the Credit Agreement and will use the net proceeds
from the sale of the Notes to repay amounts owed to such lenders and to pay fees
and expenses, as more fully described in the Prospectus.
This Agreement, the Indenture (including the Subsidiary Guarantees),
the Notes, the Security Documents (as amended by the Security Documents
Amendment) and the Credit Agreement Amendment are herein referred to
collectively as the "Transaction Documents."
Concurrently with this offering of Notes, the Company is offering up
to 8,280,000 shares of its Common Stock pursuant to a separate prospectus
supplement. Closing of the common stock offering is not conditioned upon the
closing of this offering, and this offering is not conditioned on the closing of
such offering.
The Company and each Guarantor hereby agrees with the Underwriters as
follows:
1. The Company agrees to sell the Notes to the several Underwriters
as hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company at a purchase price equal to 96.998% of the principal amount thereof
(the "Purchase Price") (plus accrued interest, if any, from July 2, 2002 to the
date of payment and delivery) the principal amount of Notes set forth opposite
such Underwriter's name on Schedule B hereto. Except as may otherwise be agreed
pursuant to Section 9 hereof, the Company shall not be obligated to deliver any
of the Notes except upon payment for all of the Notes to be purchased as
provided herein.
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2. The Company understands that the Underwriters intend (i) to make
a public offering of the Notes as soon after (A) the Registration Statement has
become effective and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Representatives is advisable and (ii)
initially to offer the Notes upon the terms set forth in the Prospectus. Such
price may be changed at any time without notice.
3. Payment for the Notes shall be made by wire transfer in
immediately available funds to the account specified to the Representatives by
the Company on July 2, 2002, or at such other time on the same or such other
date, not later than the fifth Business Day thereafter, as the Representatives
and the Company may agree upon in writing. The time and date of such payment for
the Notes is referred to herein as the "Closing Date". As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York, New York or Houston, Texas.
The Company will deliver to the Underwriters against payment of the
purchase price thereof the Notes to be purchased by each Underwriter hereunder
in the form of one or more global Notes in registered form without interest
coupons which will be deposited with the Trustee as custodian for The Depository
Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for
DTC. Interests in the global Notes will be held only in book-entry form through
DTC except in the limited circumstances described in the Prospectus when they
may be transferred in the form of definitive certificated Notes.
4. The Company and each Guarantor jointly and severally represent
and warrant to each Underwriter that:
(a) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to (A) any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives
expressly for use therein or (B) that part of the Registration
Statement that constitutes the Statement of
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Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "TIA" or the "Trust Indenture Act"), of the Trustee.
(b) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; except that the foregoing
representations and warranties shall not apply to (A) statements or
omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein; or (B) that part
of the Registration Statement that constitutes the Form T-1 referred to
above.
(c) The documents incorporated by reference in the
Prospectus, when they become effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) The financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates indicated
and
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the results of their operations and changes in their consolidated cash
flows for the periods specified; and said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting schedules,
if any, included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
The historical financial statements, together with related schedules
and notes, included or incorporated by reference in the Prospectus,
comply as to form in all material respects with the requirements
applicable to registration statements on Form S-3 under the Securities
Act; the other financial and statistical information and data included
or incorporated by reference in the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and
the books and records of the Company.
(e) There has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, or any
material adverse change in or affecting the business, prospects,
condition (financial or other), stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change"), from that set forth or contemplated in the
Prospectus (as it stood at the time of execution and delivery of this
Agreement); and, except as set forth or contemplated in the Prospectus
(as it stood at the time of execution and delivery of this Agreement),
neither the Company nor any of its Significant Joint Ventures (as
defined below) or subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to the Company and its subsidiaries taken as a whole or incurred any
material liability, direct or contingent.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on or affecting the business, prospects,
condition (financial or other), stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
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(g) the list of subsidiaries on Schedule C includes the only
subsidiaries, direct or indirect, of the Company with assets, or in
which the Company has an investment, in excess of $1,000,000 (the
subsidiaries on such Schedule herein referred to as the
"subsidiaries"). Each has been duly organized and is validly existing
under the laws of its jurisdiction of organization, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect; and all the outstanding shares of capital
stock or other ownership interests of each subsidiary of the Company
have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except (i) in the case of foreign subsidiaries,
for directors' qualifying shares, (ii) the pledge of such stock or
other ownership interests pursuant to the Security Documents as set
forth in the Prospectus and (iii) as otherwise set forth in the
Prospectus) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests or similar claims
(each, a "Lien").
(h) The joint ventures listed on Schedule D are the only
joint ventures in which the Company or any of its subsidiaries
participates as an owner or partner. Each of Equistar Chemicals, LP
("Equistar"), LYONDELL-CITGO Refining, LP ("LCR" and, together with
Equistar, the "Significant Joint Ventures") has been duly organized and
is validly existing as a limited partnership under the laws of its
jurisdiction of organization, with power and authority (partnership and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a Material Adverse Effect;
and all the outstanding general and limited partnership interests of
each Significant Joint Venture have been duly authorized and validly
issued, are fully-paid and non-assessable (except insofar as any such
general partnership interest carries with it liability for the debts
and obligations of the relevant limited partnership). Except as set
forth or contemplated in the Prospectus (as it stood at the time of
execution and delivery of this Agreement), the Company owns 41% of the
outstanding general and limited partnership interests of Equistar and
58.75% of the outstanding general and limited partnership interests of
LCR and (except for (i) the pledge under the Security Documents and
(ii) otherwise, in each case as set forth in the Prospectus) the
outstanding
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general and limited partnership interests of the Significant Joint
Ventures owned by the Company are owned by it, directly or indirectly,
free and clear of all Liens (except for such restrictions on transfer
of the Company's or its subsidiaries' owner or partner interest in a
Significant Joint Venture as are set forth in the governing documents
thereof), security interests and similar claims.
(i) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued, are
fully-paid and non-assessable and are not subject to any pre-emptive or
similar rights.
(j) Neither the Company nor any of its Significant Joint
Ventures or subsidiaries is, or with the giving of notice or lapse of
time or both would be, in violation of or in default under, its
Certificate of Incorporation or By-Laws or other constitutive documents
or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Joint Ventures or subsidiaries is a party or by which it or any of them
or any of their respective properties is bound, except (other than in
the case of the Credit Agreement and the Security Documents) for
violations and defaults which individually and in the aggregate would
not have a Material Adverse Effect. The issue and sale of the Notes and
the Subsidiary Guarantees hereunder and the performance by the Company
and its subsidiaries of their obligations under this Agreement and the
consummation of the transactions contemplated herein and in the other
Transaction Documents will not (A) conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Joint Ventures or subsidiaries is a party or by which the Company or
any of its Significant Joint Ventures or subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Significant Joint Ventures or subsidiaries is subject or (B) result in
the imposition or creation of (or the obligation to create or impose) a
Lien under, any agreement or instrument to which the Company or any of
its Significant Joint Ventures or subsidiaries is party or by which the
Company or any of its Significant Joint Ventures or any of its
subsidiaries or their respective property is bound (other than the
Liens created by the Security Documents), nor will any such action
result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its Significant
Joint Ventures or subsidiaries or any of their respective properties;
and no consent, approv-
8
al, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Notes to be sold by the Company hereunder or the
consummation by the Company of the transactions contemplated by this
Agreement or in the other Transaction Documents except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as
may be required under state securities or Blue Sky Laws in connection
with the purchase and distribution of the Notes by the Underwriters.
(k) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations, actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Significant
Joint Ventures or subsidiaries or any of their respective properties or
to which the Company or any of its Significant Joint Ventures or
subsidiaries is or may be a party or to which any property of the
Company or any of its Significant Joint Ventures or subsidiaries is or
may be the subject which, if determined adversely to the Company or any
of its Significant Joint Ventures or subsidiaries, could individually
or in the aggregate reasonably be expected to result in a Material
Adverse Effect, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be described
(including by way of incorporation by reference) in the Prospectus or
the Registration Statement and are not so described.
(l) The Company and its Significant Joint Ventures and
subsidiaries have good and marketable title in fee simple to all items
of real property and good title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects
except (i) (A) the liens thereon created pursuant to the Security
Documents and (B) otherwise, in each case as described or referred to
in the Prospectus or (ii) such liens permitted by the Security
Documents and such other encumbrances and defects that do not affect
the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company and its Significant
Joint Ventures and subsidiaries in any manner which would have a
Material Adverse Effect; and any real property and buildings held under
lease by the Company and its Significant Joint Ventures and
subsidiaries are held by them under valid, existing and enforceable
leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings
by the Company or its Significant Joint Ventures or subsidiaries.
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(m) No relationship, direct or indirect, exists between or
among the Company or any of its Significant Joint Ventures or
subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
Significant Joint Ventures or subsidiaries on the other hand, which is
required by the Securities Act to be described (including by way of
incorporation by reference) in the Prospectus or the Registration
Statement, which is not so described.
(n) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries or its
Significant Joint Ventures, are independent public accountants as
required by the Act.
(o) The Company and its Significant Joint Ventures and
subsidiaries have filed all federal, state, local and foreign tax
returns which have been required to be filed and have paid all taxes
shown thereon and all assessments received by them or any of them to
the extent that such taxes have become due and are not being contested
in good faith.
(p) Each of the Company and its Significant Joint Ventures
and subsidiaries owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts
and other tribunals, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, except such as would not
result in a Material Adverse Effect, and neither the Company nor any
such Significant Joint Venture or subsidiary has received any actual
notice of any proceeding relating to revocation or modification of any
such license, permit, certificate, consent, order, approval or other
authorization which, if determined adversely to the Company or any of
its Significant Joint Ventures or subsidiaries could result in a
Material Adverse Effect; and each of the Company and its Significant
Joint Ventures and subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of
the date hereof, except where the failure to so comply would not,
singly or in the aggregate, result in a Material Adverse Effect.
(q) There are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or
any of its Significant Joint Ventures or subsidiaries which are likely
to have a Material Adverse Effect.
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(r) The Company and its Significant Joint Ventures and
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect, and except
as disclosed in the Prospectus.
(s) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its Significant
Joint Ventures and subsidiaries, in the course of which it identifies
and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect, except as disclosed in the
Prospectus.
(t) The Security Documents Amendment has been duly authorized
by the Company and each of its subsidiaries party thereto and, on the
Closing Date, will have been validly executed and delivered by the
Company and each of its subsidiaries party thereto and the Security
Documents (as amended by the Security Documents Amendment) will be
valid and binding agreements of the Company and its subsidiaries party
thereto, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability (which principles may
include implied duties of good faith and fair dealing).
(u) The Security Documents create valid security interests or
mortgage liens in the collateral purported to be covered thereby
securing the Indenture Obligations, which security interests or
mortgage liens are and will remain perfected security interests or
liens prior to all other Liens
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(subject to the exceptions contemplated by the Security Documents).
Each of the representations and warranties made by the Company and its
subsidiaries in each Security Document to which it is a party is true
and correct in all material respects.
(v) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(w) The Indenture has been duly qualified under the Trust
Indenture Act and authorized by the Company and each of the Guarantors
and, on the Closing Date, will have been validly executed and delivered
by the Company and each of the Guarantors. When the Indenture has been
duly executed and delivered by the Company and each of the Guarantors,
the Indenture will be a valid and binding agreement of the Company and
each Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability (which principles may include
implied duties of good faith and fair dealing).
(x) The Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company.
When the Notes have been issued, executed and authenticated in
accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriters in accordance with the terms of this
Agreement, the Notes will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable
in accordance with their terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability (which principles may include
implied duties of good faith and fair dealing). On the Closing Date,
the Notes will conform as to legal matters to the description thereof
contained in the Prospectus.
(y) The Subsidiary Guarantees of the Notes by each Guarantor
have been duly authorized by such Guarantor and, when the Notes have
been issued, executed and authenticated in accordance with the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Subsidiary Guarantees
of each Guarantor will be entitled to the benefits of the Indenture and
will be the valid and binding obligations of such Guarantor,
enforceable against such Guarantor
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in accordance with their terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability (which principles may include
implied duties of good faith and fair dealing). On the Closing Date,
the Subsidiary Guarantees will conform as to legal matters to the
description thereof contained in the Prospectus.
(z) The Credit Agreement Amendment has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date,
will have been duly executed and delivered by the Company and each of
the Guarantors. When the Credit Agreement Amendment has been duly
executed and delivered by the Company and each of the Guarantors, the
Credit Agreement (as amended by the Credit Agreement Amendment) will be
a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with
its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability (which principles may include implied duties of good
faith and fair dealing).
(aa) Neither the Company or any Guarantor is and, after giving
effect to the offering and sale of the Notes and the application of the
net proceeds thereof as described in the Prospectus, neither will be,
an "investment company," as such term is defined in the Investment
Company Act of 1940, as amended.
(bb) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance
or sale of the Notes to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve System.
(cc) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act (i) has imposed (or has informed the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's or any Guarantor's retaining any rating
assigned to the Company or any Guarantor, any securities of the
Company or any Guarantor or (ii) has indicated to the Company or any
Guarantor that it is
13
considering (A) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (B) any change in the
outlook for any rating of the Company, any Guarantor or any securities
of the Company or any Guarantor.
(dd) All indebtedness of the Company and the Guarantors that
will be repaid with the proceeds of the issuance and sale of the Notes
was incurred, and the indebtedness represented by the Notes is being
incurred, for proper purposes and in good faith and each of the Company
and the Guarantors was, at the time of the incurrence of such
indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will be on the Closing Date (after giving effect
to the application of the proceeds from the issuance of the Notes)
solvent, and had at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the
Notes and will have on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Notes) sufficient
capital for carrying on their respective business and were, at the time
of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Notes, and will be on the
Closing Date (after giving effect to the application of the proceeds
from the issuance of the Notes) able to pay their respective debts as
they mature.
(ee) Each certificate signed by any officer of the Company or
the Guarantors and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by the
Company or the Guarantors to the Underwriters as to the matters covered
thereby.
(ff) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(gg) The Company has furnished the Underwriters and their
counsel true and correct copies of the forms of agreements with respect
to the transactions with Occidental Petroleum Corporation and its
subsidiaries described in the Prospectus under "Proposed Transactions
with Occidental", and the Company is not aware of any material changes
that are contemplated or expected to be made to such forms prior to, or
after, their execution by the parties thereto; the description of such
transactions included and incorporated by reference into the Prospectus
is a fair and accurate summary of such transactions in all material
respects.
14
The Company and the Guarantors acknowledge that the Underwriters and,
for purposes of the opinions to be delivered to the Underwriters pursuant to
Section 6 hereof, counsel to the Company and the Guarantors and counsel to the
Underwriters will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
5. The Company and each of the Guarantors jointly and severally
covenants and agrees with each of the several Underwriters as follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act, and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the
Representatives four signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein, and to each
other Underwriter a conformed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case without
exhibits (but including the documents incorporated by reference
therein), and, during the period mentioned in Section 5(e) below, to
each of the Underwriters as many copies of the Prospectus (including
all amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has
been filed or becomes effective, (iii) when any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or
15
supplement to the Prospectus or for any additional information, (v) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus or the Prospectus
or the initiation or threatening of any proceeding for that purpose,
(vi) of the occurrence of any event, within the period referenced in
Section 5(e) below, as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, and (vii) of
the receipt by the Company of any notification with respect to any
suspension of the qualification of the Notes for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of
any such stop order, or of any order preventing or suspending the use
of any preliminary prospectus or the Prospectus, or of any order
suspending any such qualification of the Notes, or notification of any
such order thereof and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) if, during such period of time after the first date of
the public offering of the Notes as in the opinion of counsel for the
Underwriters a prospectus relating to the Notes is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the
dealers (whose names and addresses the Representatives will furnish to
the Company) to which Notes may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers upon request,
such amendments or supplements to the Prospectus as may be necessary so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law;
(f) to endeavor to qualify the Notes (and the Subsidiary
Guarantees) for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representatives shall reasonably request and
to continue such qualification in effect so long as reasonably required
for distribution of the Notes; provided that neither the Company nor
any Guarantor shall be required to (x) file a general consent to
service of
16
process, (y) subject itself to taxation or (z) qualify as a foreign
corporation in any jurisdiction in which it is not otherwise required
to do so;
(g) to make generally available to its security holders and
to the Representatives as soon as practicable an earnings statement
covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) for a period of five years, to furnish to the
Representatives copies of all reports or other communications
(financial or other) furnished to holders of the Company's securities
(in the same manner as such documents are furnished to holders of the
Company's securities), and copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange;
(i) during the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise transfer or dispose of any debt
securities of the Company or the Guarantors or any warrants, rights or
options to purchase or otherwise acquire debt securities of the Company
or any Guarantor substantially similar to the Notes and the Subsidiary
Guarantees (other than (i) the Notes and the Subsidiary Guarantees,
(ii) borrowings under the Credit Agreement and (iii) commercial paper
issued in the ordinary course of business), without the prior written
consent of the Representatives;
(j) to use the net proceeds received by the Company from the
sale of the Notes pursuant to this Agreement in the manner specified in
the Prospectus under caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
the obligations of the Company and the Guarantors hereunder, including
without limiting the generality of the foregoing, all costs and
expenses (i) the fees, disbursements and expenses of counsel to the
Company and the Guarantors and accountants of the Company and the
Guarantors in connection with the sale and delivery of the Notes to the
Underwriters, (ii) incident to the preparation, registration, transfer,
execution and delivery of the Notes, including any transfer or other
taxes payable thereon, (iii) incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Prospectus and any
17
preliminary prospectus (including in each case all exhibits, amendments
and supplements thereto), (iv) incurred in connection with the
registration or qualification of the Notes under the laws of such
jurisdictions as the Representatives may designate (including fees of
counsel for the Underwriters and their disbursements), (v) related to
the filing with, and clearance of the offering by, the NASD (including
fees of counsel for the Underwriters and their disbursements), (vi) in
connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the Indenture, the Notes, the
Subsidiary Guarantees, the Security Documents and the Security
Documents Amendment and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Notes, the
Preliminary and Supplemental Blue Sky Memoranda and the furnishing to
the Underwriters and dealers of copies of the Registration Statement
and the Prospectus, including mailing and shipping, as herein provided,
(vii) any expenses incurred by the Company in connection with a "road
show" presentation to potential investors, (viii) the cost of preparing
certificates for the Notes, (ix) the fees and expenses of the Trustee
and counsel to the Trustee in connection with the Indenture, the Notes,
the Subsidiary Guarantees, the Security Documents and the Security
Documents Amendment, (x) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC), (xi) any costs relating to
the creation or perfection of the liens under the Security Documents
and (xii) any fees charged by rating agencies for the rating of the
Notes;
(l) not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of
any Notes and the related Subsidiary Guarantees; and
(m) to use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
it prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Notes and the Subsidiary Guarantees.
6. The several obligations of the Underwriters hereunder to
purchase the Notes on the Closing Date are subject to the performance by the
Company and the Guarantors of their obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective
(or if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such
18
purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act and in accordance
with Section 5(a) hereof; and all requests of the Representatives for
additional information shall have been complied with to the reasonable
satisfaction of the Representatives.
(b) The representations and warranties of the Company and
each of the Guarantors contained herein are true and correct on and as
of the Closing Date, as if made on and as of the Closing Date, and the
Company and each of the Guarantors shall have complied in all material
respects with all agreements and all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as one enterprise which, in the
judgment of the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Notes; (ii) any downgrading
in the rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that the Company has
been placed on negative outlook; (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of the
Representatives, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Notes, whether in the
primary market or in respect of dealings in the secondary market; (iv)
any material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of
settlements of securities or clearance services in the United States or
(vii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by
Congress or any
19
other national or international calamity or emergency if, in the
judgment of the Representatives, the effect of any such attack,
outbreak, escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Notes.
(d) The Representatives shall have received on and as of the
Closing Date (i) a certificate of an officer of the Company and each
Guarantor, with specific knowledge about the financial matters of the
Company or such Guarantor, satisfactory to the Representatives to the
effect set forth in Sections 4(e), 4(cc), 6(a) and 6(b) and (ii) a
certificate in the form of Exhibit 1 hereto signed by the chief
financial officer of the Company.
(e) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters),
dated the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., counsel for the Company
and the Guarantors, to the effect that:
(i) Each of the Company and the Guarantors is duly
organized and validly existing in good standing under the laws
of the State of Delaware, with corporate (or limited
partnership) power and authority under such laws to own, lease
and operate its properties and conduct its business as
described in the Prospectus.
(ii) The Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement,
will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in
accordance with their terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability
(which principles may include implied duties of good faith and
fair dealing).
(iii) The Subsidiary Guarantees have been duly
authorized and, when the Notes are executed and authenticated
in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance
with the terms of this
20
Agreement, the Subsidiary Guarantees will be entitled to the
benefits of the Indenture and will be valid and binding
obligations of the Guarantors, enforceable in accordance with
their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (y) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability (which
principles may include implied duties of good faith and fair
dealing).
(iv) The Indenture has been duly authorized, executed
and delivered by the Company and the Guarantors and is a valid
and binding agreement of the Company and the Guarantors,
enforceable against the Company and the Guarantors in
accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability
(which principles may include implied duties of good faith and
fair dealing).
(v) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors.
(vi) The Notes and the Indenture conform as to legal
matters in all material respects to the descriptions thereof
contained in the Prospectus; the statements under the caption
"Certain United States Federal Income Tax Consequences to
Non-U.S. Holders" in the Prospectus are a fair and accurate
summary in all material respects of the legal matters
described therein; and such counsel does not know of any
statutes, regulations, contracts or other documents that are
required to be described (including by way of incorporation by
reference) in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement (or any
document incorporated by reference) that are not described or
filed as required.
(vii) The Registration Statement and the Prospectus
and any amendments and supplements thereto, excluding the
documents incorporated by reference therein (other than the
financial statements and related schedules and other financial
and statistical data therein, as to which such counsel need
express no opinion) as of the dates they became effective or
were filed with the Commission, as the case may be, appear on
their face to be
21
appropriately responsive in all material respects to the
requirements of the Securities Act.
(viii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Closing Date (other than the
financial statements and related schedules and other financial
and statistical data therein, as to which such counsel need
express no opinion), when they became effective or were filed
under the Exchange Act with the Commission, as the case may
be, appear on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.
(ix) The issue and sale of the Notes and the
performance by the Company of its obligations under this
Agreement and the consummation of the transactions
contemplated herein and in the other Transaction Documents
will not (1) result in any violation of the provisions of (a)
the Certificate of Incorporation or the By-Laws of the Company
or any Guarantor or (b) any law or statute or any order, rule
or regulation of any court or governmental agency or body
having jurisdiction over the Company, its Significant Joint
Ventures or subsidiaries or any of their respective properties
or (2) constitute a default under, the Credit Agreement, the
Existing ARCO Chemical Debt, the Existing Secured Notes or the
Company's Senior Subordinated Notes due 2009.
(x) No consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body is required for the issuance by
the Company of the Notes to be sold by it hereunder or the
consummation by the Company of the other transactions
contemplated by this Agreement or the other Transaction
Documents, except such as have been obtained under the
Securities Act and as may be required under the Blue Sky Laws
of the various states.
(xi) None of the Company or the Guarantors is and,
after giving effect to the offering and sale of the Notes,
none will be an "investment company", as such term is defined
in the Investment Company Act.
(xii) The Indenture has been duly qualified under the
TIA.
22
(xiii) The Credit Agreement Amendment has been duly
authorized, executed and delivered by the Company and the
Credit Agreement, as amended and restated by the Credit
Agreement Amendment, is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally, and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability (which principles may include implied
duties of good faith and fair dealing).
(xiv) The Security Documents Amendment has been duly
authorized, executed and delivered by the Company and each of
its subsidiaries party thereto and each Security Document
(other than the Louisiana Mortgage (as defined on Schedule A
hereto)), as amended by the Security Documents Amendment, is a
valid and binding agreement of the Company and each of its
subsidiaries party thereto.
(xv) Each Security Document listed on Schedule A
hereto (in each case, as amended by the applicable Security
Documents Amendment), other than the Deeds of Trust (the
"Texas Mortgages") and the Louisiana Mortgage, creates a valid
security interest in favor of the Collateral Agent for the
benefit of the "Secured Parties" (including the Trustee and
the holders of the Notes) as defined and to the extent
provided therein, in all right, title and interest of the
Company and its subsidiaries party thereto (the "Debtors") in
that portion of the "Collateral" as defined therein in which a
security interest may be created under the Uniform Commercial
Code (the "New York Code") in effect in the State of New York
(the "UCC Collateral").
(xvi) Except as otherwise provided by Sections 9-303
through 9-306 of the New York Code, the perfection of such
security interests will be determined under the local laws of
the jurisdiction in which the debtor is located, which is the
State of Delaware for each debtor. On the proper filing in the
office of the Secretary of State of the State of Delaware of
UCC-1 financing statements executed by each applicable Debtor
(copies of which shall be attached to such opinion), which
financing statements were filed in December 2001, the
Collateral Agent has a perfected security interest in that
portion of the UCC Collateral in which a security interest may
be perfected by filing and in the proceeds
23
thereof, subject, however, with respect to proceeds, to
Sections 9-315 of the New York Code and any comparable
provision of the Delaware Uniform Commercial Code. Such
financing statements have continued the effectiveness of the
previously-filed financing statements referred to therein.
(xvii) Assuming (a) continued possession and control
(within the meaning of Section 8-106 of the New York Code) in
New York by, the Collateral Agent, of the stock certificates
representing the issued and outstanding shares of capital
stock of the Company's subsidiaries pledged pursuant to the
Security Documents (the "Subsidiary Shares"), together with
stock powers properly executed in blank with respect thereto
(which Subsidiary Shares have previously been delivered to the
Collateral Agent), and (b) the Collateral Agent acquired its
interest in the Subsidiary Shares in good faith and without
notice of any adverse claims (as defined in Section 8-103 of
the New York Code), the Collateral Agent has a perfected
security interest in the Subsidiary Shares, free of any
adverse claims to the extent provided by Articles 8 and 9 of
the New York Code, for the benefit of the Secured Parties
(including the Trustee and the holders of the Notes).
(xviii) Each Texas Mortgage (as amended by the
applicable Security Documents Amendment) creates a valid
security interest in favor of the Collateral Agent for the
benefit of the Secured Parties (including the Trustee and the
holders of the Notes) as defined and to the extent provided
therein in all right, title and interest of the Company in
that portion of the "Trust Property" (as defined in each Texas
Mortgage) (the "Texas UCC Collateral") in which a security
interest may be created under Chapter 9 of the Texas Uniform
Commercial Code (the "Texas Code"). As a result of the filing
in the office of the Secretary of State of the State of Texas
and in the real property records of the County Clerk of ▇▇▇▇▇▇
County, Texas of UCC financing statements (the "Texas Fixture
Filings"), which financing statements were filed in May 1999,
as amended by UCC-3 financing statements filed in December
2001, the Collateral Agent has a perfected security interest
in that portion of the Texas UCC Collateral which may be
perfected by so filing the Texas Fixture Filings and in the
proceeds thereof in which a security interest may be created
under Chapter 9 of the Texas Code and perfected by so filing
those financing statements, subject, however, with respect to
the proceeds, to Section 9.315 of the Texas Code.
24
(xix) The applicable Security Documents Amendment
("Texas Amendment No. 2") to each Texas Mortgage is in form
satisfactory for recording or filing. The recording and
indexing of such Amendment is the only recording or filing
necessary or advisable in the State of Texas to publish notice
of, protect the validity of, and establish of record the
rights of the parties thereto and the priority of the liens
modified and extended thereby in respect of the Trust Property
(as defined in each Texas Mortgage). Other than the documents
referred to above, no other documents need be filed in any
public office in the State of Texas in order to publish
notice, protect the validity of the instruments referred to
herein or to establish of record the rights of the parties
thereto and the priority of the liens created thereby in
connection with the transactions contemplated by the Texas
Mortgages and the Indenture or the ability of the Beneficiary
(as defined in each Texas Mortgage) to seek enforcement of
such rights.
(xx) The Security Documents Amendment to each Texas
Mortgage, upon recording as set forth in Section 6(xviii)
above, will (a) be enforceable against the Company in
accordance with its terms, (b) extend the lien of such
mortgage upon, and the security interest of such mortgage in,
such of the Trust Property (as defined in each Texas Mortgage)
as is owned by the Company, as of the date of its recording
and indexing, to secure the obligations arising under the
Indenture in addition to the "Additional Senior Secured
Obligations" described in such mortgage prior to giving effect
to Texas Amendment No. 2, and (c) cause the lien of such
mortgage to equally and ratably secure (i) the Notes, and (ii)
the other Additional Secured Obligations.
(xxi) No recording, filing, stamp or transfer tax is
payable in connection with recording or filing of Texas
Amendment No. 2 except for customary recording and filing fees
charged by applicable governmental authorities.
(xxii) If all material facts and issues of law were
presented and properly argued, a Texas court, or a federal
court sitting in the State of Texas, should give effect to the
governing law provisions of each of the Transaction Documents,
subject to Section 35.51(f)(4) of the Texas Business and
Commerce Act.
Such counsel shall also state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent accountants of
25
the Company and representatives of the Underwriters and their
counsel at which the contents of the Registration Statement
and the Prospectus and related matters were discussed; and,
although such counsel did not independently verify such
information and is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the
Prospectus, on the basis of the foregoing (relying as to
materiality, to the extent such counsel deems reasonable, upon
officers and other representatives of the Company), no facts
have come to the attention of such counsel to lead such
counsel to believe that (a) the Registration Statement (other
than the financial statements, the notes thereto and the
auditors' reports thereon and the other financial, statistical
and accounting information contained therein or omitted
therefrom and except for that part of the Registration
Statement that constitutes the Form T-1 heretofore referred
to, as to which such counsel has not been asked to comment),
at its effective date, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or (b) the Prospectus (other than the financial
statements, the notes thereto and the auditors' reports
thereon and the other financial, statistical and accounting
information contained therein or omitted therefrom and except
for that part of the Registration Statement that constitutes
the Form T-1 heretofore referred to, as to which such counsel
has not been asked to comment), at the time the Prospectus was
issued, or at the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel may state that the opinions
expressed are based on and are limited to the laws of the
State of Texas, the General Corporation Law of the State of
Delaware, the contract law of the State of New York and the
federal laws of the United States, as currently in effect (and
may assume that the Uniform Commercial Code in Delaware is
identical to the New York Code).
(f) You shall have received on the Closing Date an
opinion (reasonably satisfactory to you and counsel for the
Underwriters) of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., general counsel for the
Company (or ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, deputy general counsel of the
Company), to the effect that:
26
(i) The Company has been duly qualified to do
business and is in good standing as a foreign corporation
under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
or in good standing would not have a Material Adverse Effect.
(ii) Each of the Company's subsidiaries has been duly
organized and is validly existing under the laws of its
jurisdiction of incorporation with power and authority
(corporate and otherwise) under such laws to own its
properties and conduct its business as described in the
Prospectus and has been duly qualified to do business and is
in good standing under the laws of each jurisdiction in which
it owns or leases properties, or conducts any business, so as
to require such qualification, other than where the failure to
be so qualified and in good standing would not have a Material
Adverse Effect; and all of the outstanding shares of capital
stock or other ownership interests of each subsidiary have
been duly and validly authorized and issued, are fully paid
and non-assessable, and (except (A) in the case of foreign
subsidiaries, for directors' qualifying shares and (B) the
pledge of such stock or other ownership interests under the
Security Documents as set forth in the Prospectus and (C) as
otherwise set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or similar claims.
(iii) Each of the Significant Joint Ventures has been
duly organized and is validly existing as a limited
partnership under the laws of Delaware, with power and
authority under its partnership agreement and the law of the
State of Delaware to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns
or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a Material
Adverse Effect; and all the outstanding general and limited
partnership interests of each Significant Joint Venture have
been duly authorized and validly issued, are fully-paid and
non-assessable (except insofar as any such general partnership
interest carries with it liability for the debts and
obligations of the relevant limited partnership). The Company
owns 41% of the outstanding general and limited partnership
interests in Equistar and 58.75% of the outstanding general
and limited partnership interests of LCR and (except for
27
(A) the pledge under the Security Documents and (B) otherwise,
in each case as set forth in the Prospectus) the outstanding
general and limited partnership interests of the Significant
Joint Ventures owned by the Company are owned, directly or
indirectly by the Company, free and clear of all liens,
encumbrances, security interests and similar claims.
(iv) Other than as set forth or contemplated in the
Prospectus, to the best of such counsel's knowledge, there are
no legal or governmental investigations, actions, suits or
proceedings pending or threatened or contemplated against the
Company, any of its subsidiaries, LCR or any of their
respective properties or to which the Company, any of its
subsidiaries or LCR is or may be a party or to which any
property of the Company, its subsidiaries or LCR is or may be
the subject which, if determined adversely to the Company, its
subsidiaries or LCR, could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
(v) Such counsel does not know of any statutes,
regulations, contracts or other documents that are required to
be described (including by way of incorporation by reference)
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement (or any document
incorporated by reference) that are not described or filed as
required.
(vi) None of the Company, any of its subsidiaries or
LCR is, or with the giving of notice or lapse of time or both
would be, in violation of or in default under its Certificate
of Incorporation or By-Laws or other constitutive documents,
or to the best of such counsel's knowledge, any agreement or
instrument to which the Company, any of its subsidiaries or
LCR is a party or by which it or any of them or any of their
respective properties is bound, except for violations and
defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole.
(vii) The issue and sale of the Notes and the performance
by the Company and its subsidiaries of its obligations under
this Agreement and the consummation of the transactions
contemplated herein and in the other Transaction Documents
will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any
agreement or instrument known to such counsel to which the
Company, any of its subsidiaries or LCR
28
is a party or by which the Company, any of its subsidiaries or
LCR is bound or to which any of the property or assets of the
Company, its subsidiaries or LCR is subject, nor will any such
action (A) result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or
any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of
their respective properties or, to the knowledge of such
counsel, LCR or any its properties or (B) result in the
imposition or creation of (or the obligation to create or
impose) a Lien under any agreement or instrument to which the
Company, any of its subsidiaries or LCR is a party or by which
the Company, any of its subsidiaries or LCR or their
respective property is bound (other than the Liens created
under the Security Documents).
(viii) Each of the Company, its subsidiaries and LCR
owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except such
as could not reasonably be expected to have a Material Adverse
Effect, and to the best of such counsel's knowledge, none of
the Company, any of its subsidiaries or LCR has received any
actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate,
consent, order, approval or other authorization which, if
determined adversely to the Company, any of its subsidiaries
or LCR could reasonably be expected to have a Material Adverse
Effect, and each of the Company, its subsidiaries and LCR is
in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof,
except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
Such counsel shall also state that she (or he) has
participated in conferences with officers and other
representatives of the Company, and persons under her (or his)
direction or control have participated in conferences with
officers and other representatives of the Company,
representatives of the independent accountants of the Company
and representatives of
29
the Underwriters and their counsel at which the contents of
the Registration Statement and the Prospectus and related
matters were discussed; and, although she (or he) did not
independently verify such information and is not passing upon,
and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to materiality, to the extent such
counsel deems reasonable, upon officers and other
representatives of the Company), no facts have come to her (or
his) attention to lead her (or him) to believe that (a) the
Registration Statement (other than the financial statements,
the notes thereto and the auditors' reports thereon and the
other financial, statistical and accounting information
contained therein or omitted therefrom and except for that
part of the Registration Statement that constitutes the Form
T-1 heretofore referred to, as to which such counsel has not
been asked to comment), at its effective date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or (b) the
Prospectus (other than the financial statements, the notes
thereto and the auditors' reports thereon and the other
financial, statistical and accounting information contained
therein or omitted therefrom and except for that part of the
Registration Statement that constitutes the Form T-1
heretofore referred to, as to which such counsel has not been
asked to comment), at the time the Prospectus was issued, or
at the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
Such counsel may state that the opinions expressed are
based on and are limited to the laws of the United States, the
General Corporation Law of the State of Delaware and the
Revised Uniform Limited Partnership Act of the State of
Delaware, as currently in effect.
(g) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters) of
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, general counsel of Equistar, to the effect that:
(i) Other than as set forth or contemplated in the
Prospectus, to the best of such counsel's knowledge, there are
no legal or governmental investigations, actions, suits or
proceedings pending or threatened or contemplated against
Equistar or any of
30
its subsidiaries or any of their respective properties or to
which Equistar or any of its subsidiaries is or may be a party
or to which any property of Equistar or any of its
subsidiaries is or may be the subject which, if determined
adversely to Equistar or its subsidiaries, could individually
or in the aggregate reasonably be expected to have a Material
Adverse Effect.
(ii) Neither Equistar nor any of its subsidiaries is,
or with the giving of notice or lapse of time or both would
be, in violation of or in default under its Limited
Partnership Agreement or other constitutive documents, or to
the best of such counsel's knowledge, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
to which Equistar or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties
is bound, except for violations and defaults which
individually and in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(iii) The issue and sale of the Notes and the
performance by the Company and its subsidiaries of its
obligations under this Agreement and the consummation of the
transactions contemplated herein and in the other Transaction
Documents will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which
Equistar or any of its subsidiaries is a party or by which
Equistar or any of its subsidiaries is bound or to which any
of the property or assets of Equistar or any of its
subsidiaries is subject, nor will any such action (A) result
in any violation of the provisions of the Limited Partnership
Agreement of Equistar or, to the knowledge of such counsel,
any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having
jurisdiction over Equistar, its subsidiaries or any of their
respective properties or (B) result in the imposition or
creation of (or the obligation to create or impose) a Lien
under any agreement or instrument to which the Company or any
of its subsidiaries is a party or by which Equistar or any of
its subsidiaries or their respective property is bound (other
than the Liens created under the Security Documents).
(iv) Each of Equistar and its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and
has made all declarations and filings with, all federal,
state, local and other
31
governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts
and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate its properties and
to carry on its business as conducted as of the date hereof,
except such as could not reasonably be expected to have a
Material Adverse Effect, and to the best of such counsel's
knowledge, neither Equistar nor any of its subsidiaries has
received any actual notice of any proceeding relating to
revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization
which, if determined adversely to Equistar or any of its
subsidiaries could reasonably be expected to have a Material
Adverse Effect, and each of Equistar and its subsidiaries is
in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof,
except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
Such counsel shall also state that the opinions expressed
are based on and are limited to the laws of the United States,
the General Corporation Law of the State of Delaware and the
Revised Uniform Limited Partnership Act of the State of
Delaware, as currently in effect.
(h) You shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters) of Kean, Miller,
Hawthorne, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., special Louisiana counsel for the
Company, to the effect that
(i) Amendment No. 2 to Mortgage, Assignment of Leases
and Rents, Security Agreement and Financing Statement dated as
of the Closing Date ("Louisiana Amendment No. 2") between the
Company (as successor to Lyondell Chemical Worldwide, Inc.)
and ▇▇ ▇▇▇▇▇▇ Chase Bank (formerly The Chase Manhattan Bank,
successor by merger to ▇▇▇▇▇▇ Guaranty Trust Company of New
York) is in form satisfactory for recording or filing. The
recording and indexing of Louisiana Amendment No. 2 is the
only recording or filing necessary or advisable in the State
of Louisiana to publish notice of, protect the validity of,
and establish of record the rights of the parties thereto and
the priority of the liens modified and extended thereby in
respect of the Mortgaged Property (as defined in the Louisiana
Mortgage). Other than the document referred to above, no other
documents need be filed in any public office in the State of
Louisiana in order to publish notice, protect the validity of
the instruments referred to herein or to
32
establish of record the rights of the parties thereto and the
priority of the liens created thereby in connection with the
transactions contemplated by the Transaction Documents and the
ability of the Mortgagee (as defined in the Louisiana
Mortgage) to seek enforcement of such rights.
(ii) Louisiana Amendment No. 2, upon recording as set
forth in Paragraph 6(h)(i) above, will (a) be enforceable
against the Company in accordance with its terms, (b) extend
the lien of the Louisiana Mortgage upon, and the security
interest of the Louisiana Mortgage in, such of the Mortgaged
Property (as defined in the Louisiana Mortgage) as is owned by
the Company, as of the date of its recording and indexing, to
secure the obligations arising under the Indenture in addition
to the "Additional Senior Secured Obligations" described in
the Louisiana Mortgage, prior to giving effect to Louisiana
Amendment No. 2, and (c) cause the lien of the Louisiana
Mortgage to equally and ratably secure (i) the Notes, and (ii)
the other Additional Secured Obligations.
(iii) No recording, filing, stamp or transfer tax is
payable in connection with recording or filing of Louisiana
Amendment No. 2 except for customary recording and filing fees
charged by applicable governmental authorities.
(iv) Except for the filings already accomplished and
the filings referred to above, no governmental consent,
authorization, order, approval, registration, declaration or
filing is required under the laws of the State of Louisiana in
connection with the authorization, execution, delivery and
performance of any of the Transaction Documents by any of the
parties thereto.
(v) The transactions contemplated by the Transaction
Documents will not be in conflict with any law, statute,
ordinance or governmental rule or regulation generally in
effect in the State of Louisiana.
In rendering such opinions, ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇'▇▇▇▇▇ and Kean, Miller, Hawthorne, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P. may rely as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good
standing of the Company.
33
The opinions of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇'▇▇▇▇▇ and Kean, Miller, Hawthorne, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
described above shall be rendered to the Underwriters at the request of
the Company and the Guarantors and shall so state therein.
(i) The Representatives shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the
date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to you from PricewaterhouseCoopers LLP,
independent public accountants, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(j) The Representatives shall have received on and as of
the Closing Date, an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the
Underwriters, with respect to the due authorization and valid issuance
of the Notes, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters.
(k) The Representatives shall have received an original
copy of the Indenture which shall have been duly executed and delivered
by the Company, the Guarantors and the Trustee.
(l) The Security Documents Amendment shall have been duly
authorized, executed and delivered by the Company and each of its
subsidiaries party thereto and the Representatives shall have received
(i) an original copy of such agreement, duly executed by the Company
and its subsidiaries party thereto, and (ii) evidence reasonably
satisfactory to them of the effectiveness of the security contemplated
thereby and the perfection of the security interests created thereby
(including evidence of the filing of UCC-1s, the delivery of any stock
certificates or promissory notes comprising the collateral under the
Security Documents and arrangements for the recordation of any
mortgages or deeds of trust).
(m) The Credit Agreement Amendment shall have been
authorized, executed and delivered by each party thereto and shall
constitute a valid and binding agreement of each party thereto (with
terms as set forth in the Prospectus); all conditions precedent to the
effectiveness of the Credit Agreement Amendment shall have been either
satisfied or waived by the lenders party thereto (with the consent of
the Representatives), the Credit Agreement Amendment shall have become
34
effective in accordance with its terms and no default or even of
default thereunder shall have occurred and be continuing.
(n) The Company shall have made arrangements satisfactory
to the Underwriters to (x) use the net proceeds from the sale of the
Notes to repay $200.0 million owed under the term loan facility of the
Credit Agreement and (y) reduce the revolving credit facility
thereunder to $350.0 million.
(o) On or prior to the Closing Date, the Company shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
7. The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein; provided, however, that with respect
to any such untrue statement in or omission from the preliminary prospectus, the
indemnity agreement contained in this Section 7 shall not inure to the benefit
of any such Underwriter to the extent that the sale to the person asserting any
such loss, claim, damage or liability was an initial resale by such Underwriter
and any such loss, claim, damage or liability of or with respect to such
Underwriter results from the fact that both (A) to the extent required by
applicable law, a copy of the Prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of the Notes to such person and
(B) the untrue statement in or omission from the preliminary prospectus was
corrected in the Prospectus unless, in either case, such failure to deliver the
Prospectus was a result of noncompliance by the Company with Section 5(b).
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Guarantor, their directors, their officers who
sign the
35
Registration Statement and each person who controls the Company or any Guarantor
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company and
the Guarantors to each Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the "Indemnified Person") shall
promptly notify the person or persons against whom such indemnity may be sought
(each an "Indemnifying Person") in writing, and such Indemnifying Persons, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
and not the Indemnifying Persons unless (i) the Indemnifying Persons and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both an
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that no Indemnifying Person
shall, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and any such
separate firm for the Company, the Guarantors, their directors, their officers
who sign the Registration Statement and such control persons of the Company and
the Guarantors shall be designated in writing by the Company. No Indemnifying
Person shall be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, each Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contem-
36
plated by the second and third sentences of this paragraph, such Indemnifying
Person agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such Indemnifying Person of the aforesaid request
and (ii) such Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in this Section 7 is unavailable to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person, in lieu of
indemnifying such Indemnified Person, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Underwriters on the other hand from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and the commissions received by the Underwriters, in each case as set forth in
the table on the cover of the Prospectus, bear to the aggregate public offering
price of the Notes. The relative fault of the Company and the Guarantors on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantors or by the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
37
entity for such purposes) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Notes underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Notes set forth opposite their names in Schedule
B hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Guarantors set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, any Guarantor, their officers or directors or
any other person controlling the Company or any Guarantor and (iii) acceptance
of and payment for any of the Notes.
8. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date, any one or more of the Underwriters shall fail
or refuse to purchase Notes which it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of Notes to be purchased
hereunder, the other Underwriters shall be obligated severally in the
proportions
38
that the principal amount of Notes set forth opposite their respective names in
Schedule B bears to the aggregate principal amount of Notes set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as the Representatives may specify, to purchase the Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Notes that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 8 by an amount in excess of one-tenth of such principal amount
of Notes without the written consent of such Underwriter. If on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Notes
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be purchased,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company or any
Guarantor to comply with the terms or to fulfill the conditions of this
Agreement, or if for any reason the Company or any Guarantor shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled or is not waived, the Company and
the Guarantors jointly and severally agree to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereunder. If the Agreement is
terminated by the Company by reason of the default of one or more of the
Underwriters, the Company and the Guarantors shall not be obligated to reimburse
any defaulting Underwriter on account of such expenses.
10. This Agreement shall inure to the benefit of and be binding upon
the Company, the Guarantors, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of
39
Notes from any Underwriter shall be deemed to be a successor merely by reason
of such purchase.
11. Any action by the Underwriters or the Representatives hereunder
may be taken by the Representatives jointly or by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on
behalf of the Underwriters or the Representatives, and any such action taken by
the Representatives jointly or by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. shall be binding
upon the Underwriters. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
given to the Representatives, c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇. Notices to the
Company shall be given to it at Lyondell Chemical Company, One Houston Center,
Suite 1600, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ (telefax: (▇▇▇) ▇▇▇-▇▇▇▇);
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
12. This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the same
instrument.
13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
14. No amendment or waiver of any provision of this Agreement, nor
consent or approval to any departure therefrom, shall be effective unless given
in writing and signed by the parties hereto.
40
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
LYONDELL CHEMICAL COMPANY
By: /s/ Lyondell Chemical Company
--------------------------------------
Name:
Title:
ARCO CHEMICAL TECHNOLOGY, INC.
By: /s/ ARCO Chemical Technology, Inc.
--------------------------------------
Name:
Title:
ARCO CHEMICAL TECHNOLOGY, L.P.
By: /s/ ARCO Chemical Technology, L.P.
--------------------------------------
Name:
Title:
LYONDELL CHEMICAL NEDERLAND, LTD.
By: /s/ Lyondell Chemical Nederland, Ltd
--------------------------------------
Name:
Title:
Accepted: June 26, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
CORPORATION
Acting severally on behalf of themselves
and the several Underwriters listed in
Schedule B hereto.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
----------------------------------
Name:
Title:
SCHEDULE A
SECURITY DOCUMENTS
(1) Pledge Agreement dated as of July 28, 1998 (as amended) between the Company
and the Administrative Agent relating to the pledge of shares of capital stock
of Lyondell General Methanol Company and Lyondell Limited Methanol Company;
(2) Pledge Agreement dated as of July 28, 1998 (as amended) between the
Company and the Administrative Agent relating to the pledge of shares of capital
stock of Lyondell Petrochemical G.P. Inc. and Lyondell Petrochemical L.P. Inc.;
(3) Pledge Agreement dated as of July 28, 1998 (as amended) between the
Company and the Administrative Agent relating to the pledge of shares of capital
stock of Lyondell Refining Company;
(4) Pledge Agreement dated as of December 31, 1998 (as amended) between the
Company and the Administrative Agent relating to the pledge of shares of capital
stock of Lyondell Refining LP, LLC;
(5) Pledge Agreement dated as of May 17, 1999 between Lyondell Chemical
Worldwide, Inc. and the Administrative Agent relating to the pledge of the
Subsidiary Shares (as defined therein);
(6) Pledge Agreement dated as of March 31, 2000 between Company and the
Administrative Agent relating to the pledge of limited liability company
interests in each of Lyondell POJVGP, LLC, Lyondell POJVLP1, LLC, Lyondell
POJVLP2, LLC and Lyondell POJVLP3, LLC;
(7) Security Agreement dated as of July 28, 1998 (as amended) between
Lyondell Petrochemical G.P. Inc., Lyondell Petrochemical L.P. Inc. and the
Administrative Agent;
(8) Security Agreement dated as of July 28, 1998 (as amended) between
Lyondell Refining Company and the Administrative Agent;
(9) Security Agreement dated as of July 28, 1998 (as amended) between
Lyondell General Methanol Company, Lyondell Limited Methanol Company and the
Administrative Agent;
1
(10) Security Agreement dated as of December 31, 1998 (as amended) between
Lyondell Refining LP, LLC and the Administrative Agent;
(11) Security Agreement dated as of May 17, 1999 (as amended) between
Lyondell Chemical Company and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Collateral Agent (the "Collateral Agent");
(12) Deed of Trust dated as of May 13, 1999 (but effective as of May 17,
1999) (as amended) relating to Bayport, TX facility from LCW to the trustee
named therein for the benefit of the Collateral Agent;
(13) Deed of Trust dated as of May 13, 1999 (but effective as of May 17,
1999) (as amended) relating to Channelview, TX facility from Lyondell Chemical
Worldwide, Inc. ("LCW") to the trustee named therein for the benefit of the
Collateral Agent;
(14) Mortgage dated as of May 13, 1999 (as amended) (but effective as of
May 17, 1999) relating to Lake Charles, LA facility from LCW to the Collateral
Agent (the "Louisiana Mortgage");
(15) Security Agreement dated as of May 17, 1999 (as amended) between LCW
and the Collateral Agent;
(16) Security Agreement dated as of March 31, 2000 between PO Offtake, LP
and the Administrative Agent; and
(17) Security Agreement dated as of March 31, 2000 among Lyondell POTechGP,
Inc., Lyondell POTechLP, Inc. and the Administrative Agent.
2
SCHEDULE B
Principal Amount
of Notes To Be
Underwriter Purchased
----------- ------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. ......................... $ 79,230,000
Banc of America Securities LLC .................... $ 79,230,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ....................... $ 79,230,000
Credit Suisse First Boston Corporation ............ $ 26,410,000
Scotia Capital (USA) Inc. ......................... $ 13,900,000
------------
Total .................................... $278,000,000
============
SCHEDULE C
SUBSIDIARIES
ARCO Chemical Properties, L.P.
ARCO Chemical Technology Management, Inc.
ARCO Chemical Technology, Inc.
ARCO Chemical Technology, L.P.
Eurogen ▇.▇.
▇▇▇-▇▇▇▇▇ Mfg. Maasviakte VOF
Lyondell Asia Pacific, Ltd.
Lyondell Australia Pty Limited/1/
Lyondell Bayport, LLC
Lyondell Centennial Corp.
Lyondell Chemical (Deutschland) GmbH
Lyondell Chemical Canada Inc./1/
Lyondell Chemical Central Europe Ges.m.b.H
Lyondell Chemical Delaware Company
Lyondell Chemical Espana Co.
Lyondell Chemical Europe, Inc.
Lyondell Chemical Holding Company
Lyondell Chemical International Company
Lyondell Chemical Italia S.r.L.
Lyondell Chemical Nederland, Ltd.
Lyondell Chemical Overseas Services, Inc.
Lyondell Chemical Pan America
Lyondell Chemical Products Europe, Inc.
Lyondell Chemical Wilmington, Inc.
Lyondell Chemie (PO-11) BV
Lyondell Chemie (POSM) BV
Lyondell Chemie International BV
Lyondell Chemie Investment Nederland B.V.
Lyondell Chemie Nederland BV
Lyondell Chemie Technologie Nederland B.V.
Lyondell Chemie Utilities B.V.
Lyondell Chimie France Corporation
Lyondell Chimie France SNC
Lyondell Chimie TDI SCA
Lyondell-Equistar Holdings Partners
Lyondell France, Inc.
----------
/1/In the process of being liquidated by the Company.
1
Lyondell Funding LLC
Lyondell General Methanol Company
Lyondell Greater China, Ltd.
Lyondell Indonesia, Inc./2/
Lyondell Intermediate Holding Company
Lyondell Japan, Inc.
Lyondell Limited Methanol Company
Lyondell Methanol Company, L.P.
Lyondell Petrochemical G.P. Inc.
Lyondell Petrochemical L.P. Inc.
Lyondell PO-11 C.V.
Lyondell POJVGP, LLC
Lyondell POJVLP1, LLC
Lyondell POJVLP2, LLC
Lyondell POJVLP3, LLC
Lyondell POTechGP, Inc.
Lyondell POTechLP, Inc.
Lyondell Quimica do Brasil, Ltda
Lyondell Refining Company
Lyondell Refining LP, LLC
Lyondell South Asia Pte Ltd
Lyondell Taiwan, Inc./2/
Lyondell Thailand, Ltd.
Lyondell-DNT Limited Partnership
PO Offtake, LP
POSM Delaware, Inc.
POSM II Limited Partnership, L.P.
POSM II Properties Partnership, L.P.
Seinehaven BDO2 C.V.
Steamelec B.V.
Viritech, Inc.
--------
/2/Will be dissolved effective as of June 28, 2002.
2
SCHEDULE D
JOINT VENTURES
Equistar Chemicals, LP
Eurogen ▇.▇.
▇▇▇-▇▇▇▇▇ Mfg. Maasviakte VOF
LYONDELL-CITGO Refining, LP
Lyondell-DNT Limited Partnership
Lyondell-Equistar Holdings Partners
PO JV, LP
POSM II Limited Partnership, L.P.
Technology JV, LP
Nihon Oxirane Co., Ltd.
Steamelec B.V.
3
Exhibit 1
Certificate of Chief Financial Officer of Lyondell Chemical Company
This Officer's Certificate is delivered pursuant to Section 6(d)(ii) of
the Underwriting Agreement (the "Underwriting Agreement") dated June 26, 2002
among Lyondell Chemical Company (the "Company"), Lyondell Chemical Nederland,
Ltd., ARCO Chemical Technology, Inc. and ARCO Chemical Technology, L.P.
(together, the "Subsidiary Guarantors") and the Underwriters named therein
relating to the Company's 11 % Senior Secured Notes due 2012 (the "Notes").
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Underwriting Agreement.
1. The Company has been advised by the arrangers of its Credit
Agreement that, as a result of market conditions in the revolving credit market,
the Company is not currently able to extend the maturity of the $500.0 million
revolving credit component of the Credit Agreement on commercially reasonable
terms beyond its current maturity date of June 30, 2003. Instead, the Company
has been able to extend the maturity of $350.0 million of revolving credit
capacity.
2. The Company believes it appropriate, and has been advised by its
financial advisors that the rating agencies and investors will deem it
desirable, for the Company to have more than $350.0 million of available
liquidity at all times, which available liquidity could consist of revolving
credit availability and/or cash on hand.
3. The Company has therefore determined to issue the Notes and invest a
portion of the proceeds in cash and cash equivalents to be available for
liquidity needs as a partial replacement for the revolving credit facility, and
to reduce availability under the revolving credit facility in connection
therewith to $350.0 million.
4. The Company has no current plan or intent to increase the
commitments under the revolving credit facility, or obtain additional revolving
credit facility capacity in any other manner within one year from the date
hereof absent a Board of Directors determination in good faith that the Company
has experienced a change in circumstances that require it to obtain additional
liquidity.
4
IN WITNESS WHEREOF, I have signed this certificate on behalf of the
Company.
By: __________________________
Name: T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Chief Financial Officer
Dated: July 2, 2002
5
