EXHIBIT 1.1
LYONDELL CHEMICAL COMPANY
7,200,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
June 25, 2002
June 25, 2002
Credit Suisse First Boston Corporation
XX Xxxxx Securities Corporation
UBS Warburg LLC (the foregoing,
collectively, the "Joint Bookrunners")
Xxxxxxx Xxxxx Barney Inc.
As representatives (the
"Representatives") of the
several Underwriters listed in
Schedule I hereto
c/o Credit Suisse First Boston
Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Lyondell Chemical Company, a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), an aggregate of 7,200,000 shares (the "Underwritten
Shares") and, at the election of the Underwriters, up to 1,080,000 additional
shares (the "Option Shares") of common stock, par value $1.00 per share (the
"Common Stock"), of the Company. The Underwritten Shares and the Option Shares
are herein referred to as the "Shares". The Shares will have attached thereto
share purchase rights (the "Rights") issued pursuant to the Rights Agreement
(the "Rights Agreement") dated as of December 8, 1995 between the Company and
The Bank of New York, as Rights Agent.
The Company has 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
Common Stock and the related Rights and certain other equity and debt securities
(the "Shelf Securities") to be issued from time to time by the Company. The
Company also has filed with, or proposes to file with, the Commission pursuant
to Rule 424 under the Securities Act a prospectus supplement specifically
relating to the Shares. 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 Shares is hereinafter referred to as the "Basic
Prospectus". The Basic Prospectus as supplemented by the prospectus supplement
specifically relating to the Shares in the form first used to confirm sales of
the Shares is hereinafter referred to as the "Prospectus". If the Company has
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 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.
Concurrently with this offering of Shares, the Company is offering
$278.0 million principal amount of its senior secured notes due 2012 pursuant to
a separate prospectus supplement. In addition, the Company is amending and
restating its credit agreement (as so amended, the "Credit Agreement"). Neither
the closing of the notes offering nor the effectiveness of the Credit Agreement
amendment and restatement is conditioned upon the closing of this offering, and
this offering is not conditioned on the closing of such offering or
effectiveness of such Credit Agreement amendment.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to sell the Underwritten Shares 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
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at a purchase price per share of $13.30 (the "Purchase Price") the number of
Underwritten Shares set forth opposite such Underwriter's name on Schedule I
hereto.
In addition, the Company agrees to sell the Option Shares to the
several Underwriters and the Underwriters shall have the option to purchase at
their election up to 1,080,000 Option Shares for the sole purpose of covering
over-allotments in the sale of the Underwritten Shares. Each Underwriter, on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company at the Purchase Price that portion of the number
of Option Shares as to which such election shall have been exercised (to be
adjusted by the Joint Bookrunners so as to eliminate fractional shares)
determined by multiplying such number of Option Shares by a fraction, the
numerator of which is the number of Underwritten Shares set forth opposite such
Underwriter's name on Schedule I hereto and the denominator of which is the
total number of Underwritten Shares set forth in Schedule I hereto, for the sole
purpose of covering over-allotments (if any) in the sale of the Underwritten
Shares by the several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares
at any time on or before the thirtieth day following the date of this Agreement,
by written notice to the Company from Credit Suisse First Boston Corporation on
behalf of the several Underwriters. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date
and time when the Option Shares are to be delivered and paid for which may be
the same date and time as the Closing Date (as hereinafter defined) but shall
not be earlier than the Closing Date nor later than the tenth full Business Day
(as hereinafter defined) after the date of such notice (unless such time and
date are postponed in accordance with the provisions of Section 8 hereof). Any
such notice shall be given at least two Business Days prior to the date and time
of delivery specified therein.
2. The Company understands that the Underwriters intend (i) to make
a public offering of the Shares 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 Joint Bookrunners is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified to the Joint Bookrunners by
the Company, in the case of the Underwritten Shares, on July 1, 2002, or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Joint Bookrunners and the Company may agree upon in writing
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or, in the case of the Option Shares, on the date and time specified by the
Joint Bookrunners in the written notice of the Underwriters' election to
purchase such Option Shares. The time and date of such payment for the
Underwritten Shares is referred to herein as the "Closing Date" and the time and
date for such payment for the Option Shares, if other than the Closing Date, is
herein referred to as an "Additional 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.
Payment for the Shares to be purchased on the Closing Date or any
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Joint Bookrunners shall request in writing not later than
two full Business Days prior to the Closing Date or any Additional Closing Date,
as the case may be, with any transfer taxes payable in connection with the
transfer to the Underwriters of the Shares duly paid by the Company. Unless the
Underwriters elect to take delivery of the Shares through the book-entry
facilities of the Depository Trust Company, the certificates for the Shares will
be made available for inspection and packaging by the Joint Bookrunners at the
office of Credit Suisse First Boston Corporation set forth above not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date or
any Additional Closing Date, as the case may be.
4. The Company represents and warrants 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 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, it being understood and agreed that the only
such information is that described as such in the second paragraph of
Section 7 hereof;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been
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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 or any Additional Closing Date, as the case may be, 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
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, it being
understood and agreed that the only such information is that described
as such in the second paragraph of Section 7 hereof;
(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 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
5
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 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) since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, 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"), except as
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) the Company has not declared, paid or
made any dividend or distribution of any kind on any class of its
capital stock and neither the Company nor any of its Significant Joint
Ventures (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,
individually or in the aggregate, 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");
6
(g) the list of subsidiaries on Schedule II 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"), and each of the Company's subsidiaries has been duly
organized and is validly existing under the laws of its jurisdiction of
organization 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 or in
good standing would not, individually or in the aggregate, 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 or (ii) to the extent pledged under
various security documents (the "Security Documents") to secure debt
and other obligations under the Credit Agreement, the Company's
outstanding senior secured notes and certain other debt and obligations
of the Company or as otherwise set forth in the Prospectus) are owned
by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and similar claims;
(h) the joint ventures listed on Schedule III are the only
joint ventures in which the Company or any of its subsidiaries
participates as an owner or as a partner; each of Equistar Chemicals,
LP ("Equistar") and 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, individually
or in the aggregate, 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
7
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 to the extent pledged under
the Security Documents or as otherwise 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, free and clear of all liens, encumbrances (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) this Agreement has been duly authorized, executed and
delivered by the Company;
(j) the Rights Agreement has been duly authorized, executed
and delivered by the Company; the Rights have been duly authorized by
the Company and, when issued upon issuance of the Shares, will be
validly issued and will conform to the description thereof in the
Prospectus;
(k) the Company has an authorized capitalization as set forth
in the Prospectus and such authorized capital stock conforms as to
legal matters in all material respects to the description thereof 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; and, except as described in or expressly contemplated
by the Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company or any of its Significant
Joint Ventures or subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of
any capital stock or other equity interest of the Company or any such
Significant Joint Venture or subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
(l) the Shares have been duly authorized, and, when issued
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be duly issued and will be fully paid
and non-assessable and will conform to the descriptions thereof in the
Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;
8
(m) 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) for violations and defaults which
individually and in the aggregate would not have a Material Adverse
Effect; the issue and sale of the Shares and the related Rights to be
sold by the Company hereunder and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein 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 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, 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, approval, 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
Shares and the related Rights to be sold by the Company hereunder or
the consummation by the Company of the transactions contemplated by
this Agreement, 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 Shares and the related Rights by the Underwriters;
(n) 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
9
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 in the Registration Statement or
Prospectus (including by way of incorporation of reference) or to be
filed as exhibits to the Registration Statement that are not described
or filed as required;
(o) 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) to the extent pledged under the Security Documents or as
otherwise set forth in the Prospectus or (ii) such as do not materially
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); 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;
(p) 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 in the Registration
Statement and the Prospectus (including by way of incorporation of
reference) which is not so described;
(q) no person has the right to require the Company to
register any securities for offering and sale under the Securities Act
by reason of the filing of the Registration Statement with the
Commission or the issue and sale of the Shares to be sold by the
Company hereunder;
(r) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company",
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
10
(s) PricewaterhouseCoopers LLP who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Securities Act;
(t) 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;
(u) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Common Stock of the Company;
(v) 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,
individually or in the aggregate, 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, individually or in the aggregate, 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,
individually or in the aggregate, result in a Material Adverse Effect;
(w) 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;
(x) 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
11
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,
individually or in the aggregate, have a Material Adverse Effect, and
except as disclosed in the Registration Statement and the Prospectus;
(y) 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
Registration Statement and the Prospectus;
(z) the Company has furnished 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 execution thereof; 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; and
(aa) the Shares have been approved for listing on The New York
Stock Exchange, subject to notice of issuance.
5. The Company covenants and agrees with each of the several
Underwriters as follows:
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(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 two 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 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,
13
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 Shares 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
Shares, 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 Shares as a prospectus relating to the
Shares 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 Shares 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 Shares and the related Rights
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 Shares and the related Rights; provided that
the Company shall not be required to (x) file a general consent to
service of 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;
14
(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 Shares (in the same
manner as such documents are furnished to holders of the Shares), and
copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange;
(i) for a period of 90 days after the date hereof, not to
offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, or file with the Commission a registration statement
under the Act relating to, any additional shares of its Common Stock or
securities convertible into or exchangeable or exercisable for any
shares of its Common Stock, or publicly disclose the intention to make
any such offer, sale, pledge, disposition or filing, without the prior
written consent of Credit Suisse First Boston Corporation, except
grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof or the exercise of any other employee stock
options outstanding on the date hereof; provided that the Company may
issue securities to Occidental Petroleum or its subsidiaries on terms
that are not, in the aggregate, materially less favorable to the
Company than the terms described in the Prospectus under "Proposed
Transaction with Occidental";
(j) not to release transfer restrictions in the Stockholders'
Agreement described in the Prospectus under "Proposed Transaction with
Occidental" during the 90-day period beginning the date hereof without
the prior written consent of Credit Suisse First Boston Corporation;
(k) to use the net proceeds received by the Company from the
sale of the Shares pursuant to this Agreement in the manner specified
in the Prospectus under caption "Use of Proceeds"; and
(l) 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
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
registration, transfer, execution and delivery of the Shares, including
any transfer or other taxes payable thereon, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification of the Shares under the laws of such jurisdictions as the
Representatives may designate (including
15
fees of counsel for the Underwriters and their disbursements), (iv) in
connection with the listing of the Shares on the New York Stock
Exchange, (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
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
stock certificates, and (ix) the cost and charges of any transfer agent
and any registrar.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Company of its 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 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
contained herein are true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be, as if made on and as
of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied in all material respects with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date or the Additional Closing
Date, as the case may be;
(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),
16
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of the
Joint Bookrunners, 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 Offered Securities; (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
Joint Bookrunners, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Shares, 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 other national or international calamity or emergency
if, in the judgment of the Joint Bookrunners, 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 Shares;
(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of an officer of the Company, with specific knowledge about
the Company's financial matters, satisfactory to the Representatives to
the effect set forth in Sections 6(a) and 6(b) and to the further
effect that there has not occurred any 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);
(e) Xxxxx Xxxxx L.L.P., outside counsel for the Company,
shall have furnished to the Representatives its written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be, in
form
17
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) the Company is a corporation duly incorporated
and validly existing in good standing under the laws of the
State of Delaware, with corporate power and authority under
such laws to own its properties and conduct its business as
described in the Prospectus;
(ii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iii) the authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus;
(iv) the Shares to be issued and sold hereunder have
been duly authorized by the Company, and when delivered to and
paid for by the Underwriters in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable and the issuance of the Shares is not subject
to any preemptive rights of any stockholder of the Company or,
to the knowledge of such counsel, of any other person;
(v) the Rights Agreement has been duly authorized
by the Company; the Rights have been duly authorized by the
Company and, when issued upon issuance of the Shares, will be
validly issued;
(vi) such counsel does not know of any statutes,
regulations, contracts or other documents that are required to
be described (including by way of incorporation of reference)
in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement 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 related 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
18
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 or the Additional
Closing Date, as the case may be (other than the financial
statements and related schedules and other financial and
related 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 Shares and the
related Rights being delivered on the Closing Date or the
Additional Closing Date, as the case may be, and the
performance by the Company of its obligations under this
Agreement and the consummation of the transactions
contemplated herein will not (1) result in any violation of
the provisions of (a) the Certificate of Incorporation or the
By-Laws of the Company 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) conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, the Credit
Agreement or the indentures relating to the Company's existing
senior secured notes;
(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 Shares and the related Rights to be sold by
it hereunder or the consummation by the Company of the other
transactions contemplated by this Agreement, 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 Shares by the Underwriters; and
19
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company", as such term is defined in the
Investment Company 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 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, 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, related statistical and accounting information
contained therein or omitted therefrom, 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, related statistical and accounting information
contained therein or omitted therefrom, 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.
(f) Xxxxx X. Xxxxxx, Esq., general counsel for the Company
(or Xxxxxx X. X'Xxxxx, deputy general counsel of the Company), shall
have furnished to the Representatives her (or his) written opinion,
dated the Closing Date or the Additional Closing Date, as the case may
be, in form
20
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold
hereunder have been duly authorized and are validly issued,
fully paid and non-assessable;
(ii) 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;
(iii) each of the Company's subsidiaries has been
duly organized and is validly existing under the laws of its
jurisdiction of organization 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 (i) in the case of foreign
subsidiaries, for directors' qualifying shares, (ii) to the
extent pledged under the Security Documents or as otherwise
set forth in the Prospectus) are owned by the Company,
directly or indirectly, free and clear of all liens,
encumbrances, security interests and similar claims;
(iv) 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
21
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 of Equistar and
58.75% of the outstanding general and limited partnership
interests of LCR and (except to the extent pledged under the
Security Documents or as otherwise 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;
(v) 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, or 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 that, 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;
(vi 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 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;
22
(viii the issue and sale of the Shares and the
performance by the Company of its obligations under this
Agreement and the consummation of the transactions
contemplated herein 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
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 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 of its properties; and
(ix 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 the
23
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, 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, related statistical and accounting information
contained therein or omitted therefrom, 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, related statistical and accounting information
contained therein or omitted therefrom, 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 Xxxxxx X. X'Xxxxx, Esq., general counsel for Equistar,
shall have furnished to the Representatives his written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be, in
form and substance reasonably satisfactory to the Representatives, 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 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
24
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 are not material to Equistar
and its subsidiaries taken as a whole;
(iii the issue and sale of the Shares and the
related Rights being delivered on the Closing Date or the
Additional Closing Date, as the case may be, and the
performance by Equistar and its subsidiaries of its
obligations under this Agreement and the consummation of the
transactions contemplated herein 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
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; and
(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 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
25
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.
In rendering such opinions, Xxxxx Xxxxx L.L.P., Xx. Xxxxxx and Xx.
X'Xxxxx may rely as to matters of fact, to the extent such counsel deems 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.
The opinions of Xxxxx Xxxxx L.L.P., Xx. Xxxxxx and Xx. X'Xxxxx
described above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(h 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;
(i the Representatives shall have received on and as of
the Closing Date or Additional Closing Date, as the case may be, an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel to the Underwriters, with
respect to the due authorization and valid issuance of the Shares, 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;
26
(j the shares have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance;
(k on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Company shall have furnished to the
Representatives such further certificates and documents as the
Representatives shall reasonably request; and
(l the "lock-up" agreements, each substantially in the
form of Exhibit A hereto, between you and the directors and executive
officers of the Company (other than the Company's retiring chief
financial officer) relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date or Additional Closing Date, as the case may be.
7. The Company agrees 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, as such
expenses are incurred) 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; it being understood and agreed that
the only such information is that described as such in the second paragraph of
Section 7 hereof; 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 Shares to such person and (B) the untrue
statement in or omission from the preliminary prospectus was corrected
27
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, its directors, its officers who sign the Registration
Statement and each person who controls the Company 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 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; it being understood and agreed that the only such
information furnished by any Underwriter consists of (i) the following
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the fourth paragraph under the
caption "Underwriting" and (ii) the following information in the Prospectus
furnished on behalf of each of the Representatives (to the extent relevant to
such Representative): the information appearing in the tenth paragraph under the
caption "Underwriting".
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
28
such control persons of Underwriters shall be designated in writing by Credit
Suisse First Boston Corporation and any such separate firm for the Company, its
directors, its officers who sign the Registration Statement and such control
persons of the Company 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
contemplated 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 on the one hand and the Underwriters
on the other hand from the offering of the Shares 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 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 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 Shares. The relative fault of the Company
on the one hand and the Underwriters on the other hand
29
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 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 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 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 Shares 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 number of Shares set forth opposite their names in Schedule I 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 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, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
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.
30
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Joint Bookrunners may specify,
to purchase the Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Shares 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 number of Shares without the written consent of such
Underwriter. If on the Closing Date or the Additional Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Joint Bookrunners and the Company for the
purchase of such Shares are not made within 36 hours after such default, this
Agreement (or the obligations of the several Underwriters to purchase the Option
Shares, as the case may be) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the Joint
Bookrunners or the Company shall have the right to postpone the Closing Date
(or, in the case of the Option Shares, the Additional 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 to
comply with the terms or to fulfill the conditions of this Agreement, or if for
any reason the Company 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 agrees 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
its 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 shall not
31
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 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 Shares 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 or the Joint Bookrunners jointly or by
Credit Suisse First Boston Corporation on behalf of the Underwriters or the
Representatives, and any action by the Joint Bookrunners hereunder may be taken
by the Joint Bookrunners jointly or by Credit Suisse First Boston Corporation on
behalf of the Joint Bookrunners, and any such action taken by the
Representatives or Joint Bookrunners jointly or by Credit Suisse First Boston
Corporation 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 Credit
Suisse First Boston Corporation, Eleven Madison Avenue, New York, New York;
Attention: Transactions Advisory Group (Telefax: (000) 000-0000), with copies to
XX Xxxxx Securities Corporation, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: Xxxxx Xxxxxxxx, and UBS Warburg LLC, 000 Xxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Legal Department. Notices to the
Company shall be given to it at Lyondell Chemical Company, One Houston Center,
Suite 1600, 0000 XxXxxxxx Xxxxxx, Xxxxxxx, Xxxxx (telefax: (000) 000-0000);
Attention: General Counsel.
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.
33
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:
Accepted: June 25, 2002
CREDIT SUISSE FIRST BOSTON
CORPORATION
XX XXXXX SECURITIES
CORPORATION
UBS WARBURG LLC
XXXXXXX XXXXX XXXXXX INC.
Actingseverally on behalf of themselves
and the several Underwriters listed
in Schedule I hereto.
By: CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Credit Suisse First Boston Corporation
------------------------------------------
Name:
Title:
By: XX Xxxxx Securities Corporation
By: /s/ XX Xxxxx Securities Corporation
-----------------------------------
Name:
Title:
By: UBS WARBURG LLC
By: /s/ UBS Warburg LLC
-------------------
Name:
Title:
By: XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxxxxx Xxxxx Xxxxxx Inc.
-----------------------------
Name:
Title:
SCHEDULE I
----------- ----------------
Underwriter Number of Shares
To Be Purchased
Credit Suisse First Boston Corporation .............. 2,160,000
XX Xxxxx Securities Corporation ..................... 2,160,000
UBS Warburg LLC ..................................... 2,160,000
Xxxxxxx Xxxxx Xxxxxx Inc. ........................... 720,000
Total ..................................... 7,200,000
SCHEDULE II
SUBSIDIARIES
ARCO Chemical Properties, L.P.
ARCO Chemical Technology Management, Inc.
ARCO Chemical Technology, Inc.
ARCO Chemical Technology, L.P.
Eurogen X.X.
Xxx-Xxxxx 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
----------------------
/1/ In the process of being liquidated by the Company.
2
Lyondell Chimie TDI SCA
Lyondell-Equistar Holdings Partners
Lyondell France, Inc.
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.
3
SCHEDULE III
JOINT VENTURES
Equistar Chemicals, LP
Eurogen X.X.
Xxx-Xxxxx 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.
4
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
Lyondell Chemical Company
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
0000 XxXxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Credit Suisse First Boston Corporation
XX Xxxxx Securities Corporation
UBS Warburg LLC
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in an orderly market for the Common Stock, $1.00 par value (the "Securities"),
of Lyondell Chemical Company, and any successor (by merger or otherwise)
thereto, (the "Company"), the undersigned hereby agrees that from the date
hereof and until 90 days after the public offering date set forth on the final
prospectus used to sell the Securities (the "Public Offering Date") pursuant to
the Underwriting Agreement, to which you are or expect to become parties, the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any shares of Securities or securities convertible
into or exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston Corporation. In addition, the undersigned
agrees that, without the prior written consent of Credit Suisse First Boston
Corporation, it will not, during the period commencing on the date hereof and
ending 90 days after the Public Offering Date, make any demand for or exercise
any right with respect to, the registration of any Securities or any security
convertible into or exercisable or exchangeable for the Securities.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
5
the undersigned in the open market will not be subject to this Agreement. A
transfer of Securities to (i) to members of the immediate family of the
undersigned or a trust, partnership, limited liability company or other entity,
all of the beneficial interests of which are held by the undersigned and/or
members of the immediate family of the undersigned, (ii) to a spouse, former
spouse, child, or other dependent pursuant to a domestic relations order, as
defined in Section 414(p) of the Internal Revenue Code or Section 206(d)(3) of
Title I of the Employee Retirement Income Security Act, or (iii) charitable
organizations and other health and welfare organizations, including schools may
be made, provided, in each case, that (x) the transferee agrees, prior to the
transfer, to be bound in writing by the terms of this Agreement and (y) the
undersigned is not required to, and does not voluntarily, file a report under
Section 16(a) of the Securities Exchange Act of 1934 reporting a reduction in
beneficial ownership of shares of Common Stock during such 90-day period. As
used herein, "members of the immediate family" of a person include such person's
spouse, lineal descendants (including adopted and step-children), father,
mother, brother, sister, father-in-law, mother-in-law, brother-in-law and
sister-in-law.
In furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if the Public Offering Date shall not have
occurred on or before August 1, 2002.
Very truly yours,
________________________________
Name
6
