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REGISTRATION RIGHTS AGREEMENT
BETWEEN
ATLANTIC RICHFIELD COMPANY
AND
LYONDELL PETROCHEMICAL COMPANY
DATED AS OF , 1994
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Registration Rights Agreement (this "Agreement"), dated as of , 1994,
between Atlantic Richfield Company, a Delaware corporation ("ARCO"), and
Lyondell Petrochemical Company, a Delaware corporation ("Lyondell").
Whereas, ARCO is the owner of 39,921,400 shares, or 49.9%, of Lyondell's
issued and outstanding common stock ("Common Stock") at the date hereof and
ARCO has determined to offer to the public up to 39,921,400 of its %
Exchangeable Notes (the "Notes") due , 199 , which Notes may be repaid
by delivery of cash or shares of Common Stock, as set forth in ARCO's
Registration Statement on Form S-3 relating to the Notes.
Whereas, Lyondell acknowledges that it will receive the following benefits in
respect of the offering of the Notes by ARCO: (1) the Notes provide a method
for the orderly disposition of ARCO's investment in Lyondell; (2) the Common
Stock will have additional liquidity in the market; (3) ARCO has agreed to
refrain from certain actions more fully described in Section 2(b) hereof; (4)
in connection with the Notes transaction, Lyondell will receive [to
be filled in as applicable upon agreement re pipeline assets]; and (5) ARCO has
agreed to pay Lyondell's defense costs in the event of litigation arising out
of the offering of the Notes or the sale of Common Stock pursuant to this
Agreement, as more fully set forth in Sections 2 and 12.
Whereas, the parties hereto desire to enter into this Agreement which sets
forth the terms of certain registration rights applicable to the Registrable
Securities (as defined below).
Now, Therefore, upon the premises and the mutual promises herein contained,
and for good and valuable consideration, the receipt and adequacy of which is
acknowledged, the parties agree as follows:
1. Certain Definitions. As used in this Agreement the following initially
capitalized terms shall have the following meanings:
(a) "Holder" means ARCO and any "transferee" (as such term is defined in
Section 11 hereof).
(b) "Registrable Securities" means the 39,921,400 shares of Common Stock
currently owned by ARCO, any stock or other securities into which or for
which such shares of Common Stock may hereafter be changed, converted or
exchanged, and any other securities issued to the Holder (or such shares
into which or for which such shares are so changed, converted or exchanged)
upon any reclassification, share combination, share subdivision, share
dividend, merger, consolidation or similar transactions or events, provided
that any such securities shall not be Registrable Securities with respect
to a proposed offer or sale thereof (i) to the extent that the volume of
such securities proposed to be sold, in the good faith opinion of counsel
to ARCO, may be distributed pursuant to Rule 144 or (ii) in the case of any
registration pursuant to Section 3 or 4 of this Agreement of such
securities held by a Holder other than ARCO, unless such Holder shall
furnish Lyondell an opinion of counsel, which opinion shall be reasonably
satisfactory to Lyondell, to the effect that all of such securities are not
permitted to be distributed by such Holder pursuant to Rule 144.
(c) "Registration Expenses" means all reasonable and customary expenses
in connection with any registration of securities pursuant to this
Agreement including, without limitation, the following: (i) the fees,
disbursements and expenses of Lyondell's counsel(s) (United States and
foreign) and accountants (United States and foreign) in connection with the
registration of the Registrable Securities to be disposed of under the Act;
(ii) all expenses in connection with the preparation, printing and filing
of any registration statement, preliminary prospectus or final prospectus,
any other offering document and amendments and supplements thereto and the
mailing and delivering of copies thereof to any underwriters (United States
and foreign) and dealers (United States and foreign); (iii) the cost of
printing or producing any agreement(s) among underwriters, underwriting
agreement(s), and blue sky or legal investment memoranda, any selling
agreements and any other
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documents (in each case, United States and foreign) in connection with the
offering, sale or delivery of the Registrable Securities to be disposed of;
(iv) all expenses in connection with the qualification of the Registrable
Securities to be disposed of for offering and sale under state securities
laws, including the fees and disbursements of counsel for the underwriters
or the Holders of Registrable Securities in connection with such
qualification and in connection with any blue sky and legal investment
surveys; (v) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the
sale of the Registrable Securities to be disposed of; (vi) transfer
agents', depositories' and registrars' fees and the fees of any other agent
(in each case, United States and foreign) appointed in connection with such
offering; (vii) all security engraving and security printing expenses;
(viii) all fees and expenses payable in connection with the listing of the
Registrable Securities on each securities exchange or inter-dealer
quotation system (in each case, United States and foreign) on which a class
of common equity securities of Lyondell is then listed; and (ix) all out-
of-pocket costs incurred by Lyondell in connection with any such
registration including without limitation reasonable travel expenses.
(d) "Rule 144" and "Rule 144A," respectively, mean Rule 144 and Rule 144A
promulgated under the Act, or any successor rules to similar effect.
(e) "SEC" means the United States Securities and Exchange Commission.
(f) "Act" means the Securities Act of 1933, as amended, or any successor
statute.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
2. Registration in connection with public offering by ARCO of the Notes.
(a) Lyondell hereby agrees with ARCO to enter into the Underwriting
Agreement dated the date hereof (the "Underwriting Agreement") relating to
the registration of the shares of Lyondell Common Stock deliverable, at
ARCO's option, upon maturity of the Notes, on Form S-3 (the "Lyondell
Registration Statement") and ARCO's registration of the Notes on a separate
Form S-3 (the "ARCO Registration Statement") with Goldman Sachs & Co.,
Merrill Lynch & Co. and Salomon Brothers Inc (collectively, the
"Underwriters"), pursuant to which the Notes and the Common Stock
deliverable upon maturity of the Notes are being offered and sold to the
public.
(b) ARCO hereby agrees with Lyondell that at any time prior to one year
following the maturity date of the Notes, ARCO will not, except upon
exchange of the Notes as contemplated by the ARCO Registration Statement,
dispose of, or enter into an agreement contemplating the disposal of, all
or any portion of its Lyondell Common Stock without the prior approval of
Lyondell's Board of Directors in a private sale to a single entity or a
group of affiliated entities; provided, however, that nothing herein shall
prevent ARCO from selling all or any portion of its Lyondell Common Stock
(A) in a public offering intended to result in widespread distribution; (B)
in a Rule 144 transaction in accordance with the volume limitations set
forth therein; (C) in a Rule 144A transaction intended to result in
widespread distribution to institutional buyers; or (D) pursuant to a
tender offer or exchange offer by Lyondell or a third party, a merger or
other business combination including Lyondell which is not solicited by
ARCO and in which ARCO is treated on substantially comparable terms with
other holders of Lyondell Common Stock. ARCO also agrees that, until the
maturity of the Notes, ARCO will not, without the prior approval of
Lyondell's Board of Directors, (A) take action by written consent or cause
to be called a special meeting of Lyondell's stockholders; (B) initiate or
solicit proposals by a single entity or a group of affiliated entities to
acquire all or substantially all of ARCO's Lyondell Common Stock or
otherwise to acquire Lyondell; (C) solicit proxies or written consents in
respect of replacing, or adding members of, the Board of Directors; or (D)
initiate or propose, or solicit proxies in respect of, one or more
stockholder proposals within the meaning of Rule 14a-8 of the Exchange Act.
It is understood and agreed that the foregoing agreements shall not (i)
limit ARCO's ability to participate in any self tender offer or exchange
offer or open market purchase program which may be conducted by Lyondell,
(ii) preclude ARCO from voting its shares of Lyondell Common Stock as it
deems proper, or (iii) preclude ARCO from disclosing (including in
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response to private inquiries) either its intentions concerning matters to
be brought before Lyondell's stockholders or to make such disclosure as
ARCO determines appropriate in compliance with its obligations under the
federal securities laws.
3. Demand Registration. In addition to preparing the Lyondell Registration
Statement pursuant to the provisions of Section 2 hereof, Lyondell hereby
agrees to at any time prior to May 1, 2004:
(a) Upon written notice from a Holder of Registrable Securities in the
manner set forth in Section 13(g) hereof requesting that Lyondell effect
the registration under the Act of any or all of the Registrable Securities
held by such Holder, which notice shall specify the intended method or
methods of disposition of such Registrable Securities, Lyondell will use
its best efforts to effect (at the earliest possible date) the registration
under the Act of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request;
provided, however, that in Lyondell's sole discretion it may refuse to
register an offering on a delayed or continuous basis pursuant to Rule 415
(or any successor rule to similar effect) promulgated under the Act (a
"Rule 415 Offering")), provided, further, that:
(i) if, prior to receipt of a registration request pursuant to this
Section 3(a), (A) Lyondell has publicly announced a proposed financing,
acquisition or other transaction and (B) Lyondell's Board of Directors
makes a good faith determination that to proceed with the requested
registration would materially and adversely affect such proposed
transaction, then Lyondell shall have the right to postpone such
requested registration for the period of time its Board of Directors
determines in good faith, but in no event longer than one year from the
date of the request, is required to implement such proposed
transaction;
(ii) if, while a registration request pursuant to this Section 3(a)
is pending, the Board of Directors of Lyondell determines in good faith
(A) that Lyondell then is unable to comply with the applicable SEC
requirements for reasons beyond Lyondell's control or (B) that Lyondell
is precluded from proceeding with the requested registration pursuant
to existing "hold back" agreements, Lyondell shall not be required to
effect a registration pursuant to this Section 3(a) until the earlier
of (1) the date that Lyondell is able to comply with SEC requirements
or the hold back agreement expires, or (2) 120 days after receipt of
the registration request;
(iii) if, upon receipt of a registration request pursuant to this
Section 3(a), (A) Lyondell is actively considering a bona fide
financing, acquisition or other transaction material to Lyondell with
the full knowledge and concurrence of its Board of Directors, and (B)
the Board of Directors of Lyondell determines in good faith that the
filing of a registration statement would require the disclosure of
material information which Lyondell has a bona fide business purpose
for preserving as confidential and, as a result, Lyondell is unable to
comply with SEC requirements without making such disclosure, then
Lyondell shall not be required to effect a registration pursuant to
this Section 3(a) prior to (X) if Lyondell has not made a public
disclosure regarding such proposed transaction within 120 days of
receipt of the request, the expiration of such 120-day period, or (Y)
if Lyondell makes a public disclosure regarding such proposed
transaction within 120 days of receipt of the request, then the
expiration of such period of time, as may be determined in good faith
by Lyondell's Board of Directors, that is required to implement such
proposed transaction, which shall in no event exceed one year from the
date of receipt of the request; and
(iv) ARCO, together with its transferees, shall have the right to
exercise registration rights pursuant to this Section 3 an aggregate of
three (3) times; provided, however, that such registration rights may
not be implemented more than once during each 12-month period.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 3 shall not be deemed to have been effected (and,
therefore, not requested for purposes of subsection 3(a)), (i) unless it
has become effective, (ii) if after it has become effective such
registration is interfered with by any
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stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason other than a misrepresentation
or an omission by such Holder and, as a result thereof, the Registrable
Securities requested to be registered cannot be completely distributed in
accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in
the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied or waived other than by reason of
some act or omission by such Holder of Registrable Securities.
4. Piggyback Registration. If prior to May 1, 2004, Lyondell at any time
proposes to register any of its Common Stock or any other of its Common Stock
or securities convertible into Common Stock (collectively, "Other Securities")
under the Act (other than a registration on Form S-4 or S-8 or any successor
forms of similar effect), whether or not for sale for its own account, in a
manner which would permit registration of Registrable Securities for sale for
cash to the public under the Act, it will each such time give prompt written
notice to each Holder of Registrable Securities of its intention to do so and
of the rights of such Holder under this Section 4, at least 30 days prior to
the anticipated filing date of the registration statement relating to such
registration. Such notice shall offer each such Holder the opportunity to
include in such registration statement such number of Registrable Securities
as such Holder may request. Upon the written request of any such Holder made
within 10 days after the receipt of Lyondell's notice (which request shall
specify the number of Registrable Securities intended to be disposed of and
the intended method of disposition thereof), Lyondell will use its best
efforts to effect, in connection with the registration of the Other
Securities, the registration under the Act of all Registrable Securities which
Lyondell has been so requested to register, to the extent required to permit
the disposition (in accordance with such intended methods thereof) of the
Registrable Securities so requested to be registered, provided that:
(a) if, at any time after giving such written notice of its intention to
register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, Lyondell
shall determine for any reason not to register the Other Securities,
Lyondell may, at its election, give written notice of such determination to
such Holders and thereupon Lyondell shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of
such Other Securities, without prejudice, however, to the rights of the
Holders of Registrable Securities immediately to request that such
registration be effected as a registration under Section 3 hereof (in the
event that Lyondell shall so determine not to so register the Other
Securities, each of Lyondell and each Holder shall be responsible for the
respective Registration Expenses incurred by it in connection with such
registration);
(b) if the registration referred to in the first sentence of this Section
4 is to be an underwritten primary registration on behalf of Lyondell, and
a nationally recognized investment banking firm selected by Lyondell
advises Lyondell in writing that, in such firm's opinion, such offering
would be materially and adversely affected by the inclusion therein of the
Registrable Securities requested to be included therein, Lyondell shall use
its best efforts to include in such registration: (i) first, all securities
Lyondell proposes to sell for its own account ("Lyondell Securities"), (ii)
second, up to (A) the full number of Registrable Securities held by ARCO
and requested to be included in such registration by ARCO ("ARCO
Securities"); and (B) the full number of securities of Lyondell (other than
Registrable Securities) held by persons (other than current or former
Lyondell officers, directors or employees) to whom Lyondell has granted
registration rights ("Other Holders") in excess of the number or dollar
amount of securities Lyondell proposes to sell which, in the good faith
opinion of such underwriter(s), can be so sold without so materially and
adversely affecting such offering, allocated, if necessary, pro rata by
taking into consideration (x) the ARCO Securities and (y) the full number
of securities held by Other Holders and requested to be included in such
registration by the Other Holders, and (iii) third, up to the full number
of Registrable Securities (other than ARCO Securities) in excess of the
number or dollar amount of Lyondell Securities, ARCO Securities and
securities of Other Holders which, in the good faith opinion of such
underwriter(s) can be so sold without materially and adversely affecting
such offering (and, if less than the full number of such Registrable
Securities,
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allocated pro rata among the Holders of such Registrable Securities (other
than ARCO Securities) on the basis of the number of securities requested to
be included therein by each such Holder);
(c) if the registration referred to in the first sentence of this Section
4 is to be an underwritten secondary registration on behalf of Other
Holders, and the managing underwriter(s) advise Lyondell in writing that in
their good faith opinion such offering would be materially and adversely
affected by the inclusion therein of the Registrable Securities requested
to be included therein, Lyondell shall use its best efforts to include in
such registration: (i) first, up to the full number of securities held by
Other Holders and requested to be included in such registration by the
Other Holders, (ii) second, up to the full number of ARCO Securities
requested to be included in such registration by ARCO in excess of the
number or dollar amount of securities of Other Holders which, in the good
faith opinion of such underwriter(s), can be so sold without materially and
adversely affecting such offering and (iii) third, up to the full number of
Registrable Securities (other than ARCO Securities) in excess of the number
or dollar amount of the securities of Other Holders and ARCO Securities
which, in the good faith opinion of such underwriter(s) can be so sold
without materially and adversely affecting such offering (and, if less than
the full number of such Registrable Securities, allocated pro rata among
the Holders of such Registrable Securities (other than ARCO Securities) on
the basis of the number of such securities requested to be included therein
by each such Holder);
(d) Lyondell shall not be required to effect any registration of
Registrable Securities under this Section 4 incidental to the registration
of any of its securities in connection with mergers, acquisitions, exchange
offers, subscription offers, dividend reinvestment plans or stock option or
other executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this Section
4 shall relieve Lyondell of its obligation to effect a registration of
Registrable Securities pursuant to Section 3 hereof; provided, however,
that if Registrable Securities are not included in a registration as a
result of the application of the provisions of Sections 4(b) or 4(c)
hereof, the Holders of such Registrable Securities may not request that
such registration be effected as a registration under Section 3 hereof
until after the registration from which such Registrable Securities were
excluded has been completed or abandoned.
5. Expenses. ARCO (and any Holder other than ARCO, in the case of a
registration pursuant to Section 3 hereof) hereby agrees to pay all of the
Registration Expenses in respect of a registration effected pursuant to
Sections 2 and 3 hereof, including, without limiting the generality of the
foregoing, ARCO agrees that in connection with the registration effected
pursuant to Section 2 hereof, ARCO shall reimburse Lyondell for all out-of-
pocket costs incurred by Lyondell in connection with the negotiation and
review of this Registration Rights Agreement, as well as the review of the
proposed registration and related transactions by Lyondell's Audit Committee,
together with the costs incurred in retaining outside legal counsel for the
Audit Committee. In the case of a registration pursuant to the provisions of
Section 4 hereof, each of ARCO, any Holder other than ARCO, any Other Holders
and Lyondell agrees to pay its pro rata portion of Registration Expenses with
respect to a particular offering, such pro rata portion to be equal to the
total amount of such Registration Expenses multiplied by a fraction, the
numerator of which is the number of shares sold in such offering by such party
and the denominator of which is the total number of shares sold in such
offering.
6. Registration and Qualification. If and whenever Lyondell is required to
use its best efforts to effect the registration of any Registrable Securities
under the Act as provided in Sections 3 or 4 hereof, Lyondell will as promptly
as is practicable:
(a) prepare, file and use its best efforts to cause to become effective a
registration statement under the Act relating to the Registrable Securities
to be offered;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to
comply with the provisions of the Act with respect to the
5
disposition of all Registrable Securities until (i) in the case of a Rule
415 Offering, such time as Lyondell in its sole discretion has agreed
pursuant to Section 3(a) hereof or (ii) in the case of an offering other
than a Rule 415 Offering, the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement
and (B) the expiration of nine months after such registration statement
becomes effective; provided, that such nine month period shall be extended
for such number of days that equals the number of days elapsing from (x)
the date the written notice contemplated by Section 6(g) hereof is given by
Lyondell to (y) the date on which Lyondell delivers to the Holders of
Registrable Securities the supplement or amendment contemplated by Section
6(g) hereof;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Act, such documents incorporated by reference in such
registration statement or prospectus, and such other documents, as the
Holders of Registrable Securities or such underwriter may reasonably
request, together with a copy of any and all transmittal letters or other
correspondence to, or received from, the SEC or any other governmental
agency or self-regulatory body or other body having jurisdiction (including
any domestic or foreign securities exchange) relating to such offering;
(d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions (domestic or foreign) as the Holders of
such Registrable Securities or any underwriter of such Registrable
Securities shall request, and use its best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and to do any and all other acts and things which may be
necessary or advisable to enable the Holders of Registrable Securities or
any such underwriter to consummate the disposition in such jurisdictions of
its Registrable Securities covered by such registration statement;
provided, however, that Lyondell shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to consent to general service of
process in any such jurisdiction; provided, further, that, in the case of
and such registration or qualification in any non-United States
jurisdiction, (i) notwithstanding Section 5, the Holder of the Registrable
Securities to be so registered or qualified shall pay all costs and
expenses incurred by Lyondell in connection with such registration or
qualification in such jurisdiction, (ii) Lyondell shall have no obligation
to use its best efforts to so requester or qualify Registrable Securities
if in the good faith opinion of counsel for Lyondell such registration or
qualification shall impose on Lyondell an on-going material compliance
obligation and (iii) Lyondell shall not be obligated to keep any such
registration or qualification in effect except for so long as is necessary
or appropriate in order to dispose of Registrable Securities in such
jurisdiction in accordance with the plan of distribution set forth in the
related registration statement;
(e) use its best efforts to list all Registrable Securities covered by
such registration statement on any securities exchange or inter-dealer
quotation system (in each case, domestic or foreign) as the Holders of such
Registrable Securities or any underwriter of such Registrable Securities
shall request, and use its best efforts to obtain all appropriate
registrations, permits and consents required in connection therewith, and
to do any and all other acts and things which may be necessary or advisable
to effect such listing; provided, however, that, except with respect to any
listing on any such securities exchange or inter-dealer quotation system on
which shares of Lyondell's Common Stock are then listed, (i)
notwithstanding Section 5, the Holder of the Registrable Securities to be
so listed shall pay all costs and expenses incurred by Lyondell in
connection with such listing, (ii) Lyondell shall have no obligation to use
its best efforts to so list Registrable Securities if in the good faith
opinion of counsel for Lyondell such listing shall impose
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on Lyondell an ongoing material compliance obligation and (iii) Lyondell
shall not be obligated to keep such listing in effect except for so long as
is necessary or appropriate in order to dispose of Registrable Securities
in accordance with the plan of distribution set forth in the related
registration statement;
(f) (i) furnish to each Holder of Registrable Securities included in such
registration (each, a "Selling Holder") an Opinion of counsel for Lyondell
addressed to each Selling Holder and dated the date of the closing under
the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement), and
(ii) use its best efforts to furnish to each Selling Holder a "cold
comfort" letter addressed to each Selling Holder and signed by the
independent public accountants who have audited Lyondell's financial
statements included in such registration statement, in each such case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request and, in the case of
such accountants' letter, with respect to events subsequent to the date of
such financial statements;
(g) immediately notify the Selling Holders in writing (i) at any time
when a prospectus relating to a registration pursuant to Section 3 or 4
hereof is required to be delivered under the Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any 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, and (ii) of any request by the
SEC or any other regulatory body or other body having jurisdiction for any
amendment of or supplement to any registration statement or other document
relating to such offering, and, in either such case, at the request of the
Selling Holders, prepare and furnish to the Selling Holders a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include 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 are made, not misleading;
(h) use its best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and inter-dealer quotation
system on which a class of common equity securities of Lyondell is then
listed, and to pay its pro rata share, if any, of the fees and expenses in
connection therewith as set forth in Section 5 hereof;
(i) furnish unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters; and
(j) provide the indemnification to the Holder of Registrable Securities
set forth in Section 9.
7. Conversion of Other Securities, etc. If ARCO offers any options, rights,
warrants or other securities issued by it or any other person that are offered
with, convertible into or exercisable or exchangeable for any Registrable
Securities, the Registrable Securities underlying such options, rights,
warrants or other securities shall be eligible for registration pursuant to
Sections 3 and 4 of this Agreement.
8. Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this
Agreement pursuant to Section 3 or 4, Lyondell, subject to the provisions of
Section 3 or 4, as applicable, will enter into an underwriting agreement with
such underwriters for such offering, such agreement to contain such
representations and warranties by Lyondell and such other terms and provisions
as are customarily contained in underwriting agreements
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with respect to secondary distributions, including, without limitation,
indemnities and contribution substantially to the effect and to the extent
provided in Section 9 hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 6(f)
hereof. The Selling Holders on whose behalf the Registrable Securities are to
be distributed by such underwriters shall be parties to any such underwriting
agreement and the representations and warranties by, and the other agreements
on the part of, Lyondell to and for the benefit of such underwriters, shall
also be made to and for the benefit of such Selling Holders. Such underwriting
agreement shall also contain such representations and warranties by the Selling
Holders on whose behalf the Registrable Securities are to be distributed as are
customarily contained in underwriting agreements with respect to secondary
distributions.
(b) In the event that any registration pursuant to Section 4 shall involve,
in whole or in part, an underwritten offering, Lyondell may require the
Registrable Securities requested to be registered pursuant to Section 4 to be
included in such underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters under such
registration. If requested by the underwriters for such underwritten offering,
the Selling Holders on whose behalf the Registrable Securities are to be
distributed by such underwriters will enter into an underwriting agreement with
such underwriters, such agreement to contain such representations and
warranties by the Selling Holders and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution
substantially to the effect and to the extent provided in Section 9 hereof.
Such underwriting agreement shall also contain such representations and
warranties by Lyondell and such other person or entity for whose account
securities are being sold in such offering as are customarily contained in
underwriting agreements with respect to secondary distributions.
(c) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Act, Lyondell will give
the Holders of such Registrable Securities and the underwriters, if any, and
their respective counsel and accountants, such reasonable and customary access
to its books and records and such opportunities to discuss the business of
Lyondell with its officers and the independent public accountants who have
certified Lyondell's financial statements as shall be necessary, in the opinion
of such Holder and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Act.
9. Indemnification. Lyondell and ARCO acknowledge that, in the event of an
underwritten public offering of Lyondell Common Stock pursuant to Section 3 or
4, ARCO and Lyondell will enter into an underwriting agreement with the
underwriters. In connection therewith, Lyondell and ARCO hereby agree, as
between themselves, that in the event of any underwritten public offering of
Lyondell Common Stock pursuant to Section 3 or 4 hereof, they will enter into
indemnification and contribution agreements substantially in the form set forth
in this Section 9:
(a) Lyondell will indemnify and hold harmless each underwriter if any
(herein, the "Underwriters") against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any registration statement including the prospectus contained therein, prepared
by Lyondell in respect of the Registrable Securities (the "Lyondell Documents")
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim; provided, however,
that Lyondell shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Lyondell Documents or any amendment or supplement thereto in reliance upon
and in conformity
8
with written information furnished to Lyondell by ARCO or any Holder of
Registrable Securities expressly for use therein; and provided, further, that
Lyondell shall not be liable to such Underwriter under the indemnity agreement
in this subsection (a) with respect to any Lyondell Documents to the extent
that any such loss, claim, damage or liability of such Underwriter results
from the fact that such Underwriter sold Common Stock to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Lyondell final prospectus, if Lyondell has previously
furnished copies thereof to such Underwriter.
(b) In the event that ARCO owns more than 20 percent of the issued and
outstanding Lyondell Common Stock, and ARCO or any Holder has requested
registration of some or all of its Lyondell Common Stock pursuant to Section 3
hereof, ARCO agrees with Lyondell that in the event the Underwriters request
Lyondell to agree to a contribution provision, ARCO will not expect nor can
ARCO or any Holder require Lyondell to agree to any such contribution
provision.
(c) In the event that ARCO owns less than 20 percent of the issued and
outstanding Lyondell Common Stock, and has requested registration of some or
all of its Lyondell Common Stock pursuant to Sections 3 or 4 hereof, Lyondell
will indemnify and hold harmless ARCO or any Holder against any losses,
claims, damages or liabilities, joint or several, to which ARCO or any Holder
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Lyondell Documents or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse ARCO or any Holder for any legal or other expenses reasonably
incurred by ARCO or any Holder in connection with investigating or defending
any such action or claim; provided, however, that Lyondell shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Lyondell Documents or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to Lyondell by ARCO or any Holder expressly for
use therein; and provided, further, that Lyondell shall not be liable to ARCO
or any Holder under the indemnity agreement in this subsection (c) with
respect to any Lyondell Documents to the extent that any such loss, claim,
damage or liability of ARCO or any Holder results from the fact that ARCO or
any Holder sold Common Stock to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the Lyondell
final prospectus, if Lyondell has previously furnished copies thereof to such
Underwriter.
(d) Such Holder will indemnify and hold harmless Lyondell and each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which Lyondell and each Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of such Holder's
Registrable Securities) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact made in any Lyondell Document in
reliance upon and in conformity with written information furnished to Lyondell
by such Holder expressly for use therein; and will reimburse each Underwriter
and Lyondell for any legal or other expenses reasonably incurred by each
Underwriter and Lyondell in connection with investigating or defending any
such action or claim.
(e) Each Underwriter will indemnify and hold harmless such Holder and
Lyondell against any losses, claims, damages or liabilities to which such
Holder and Lyondell may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Lyondell Documents, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
9
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Lyondell Documents in reliance upon and in
conformity with written information furnished to such Holder or Lyondell by
such Underwriter expressly for use therein; and will reimburse each such Holder
and Lyondell for any legal or other expenses reasonably incurred by such Holder
and Lyondell in connection with investigating or defending any such action or
claim.
(f) Promptly after receipt by an indemnified party under subsection (a), (c),
(d) or (e) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable out-of-pocket costs of investigation
relating thereto. If the indemnifying party is either such Holder or Lyondell,
and the Underwriters are the indemnified party, such Holder or Lyondell, as the
case may be, shall not be liable for the expenses of more than one separate
counsel for the Underwriters (except for expenses of local counsel, if
necessary), which counsel shall be approved by the Underwriters.
(g) In the case of a registration pursuant to Section 4 hereof, if the
indemnification provided for in this Section is unavailable to or insufficient
to hold harmless an indemnified party under subsection (a), (c), (d) or (e)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by such Holder, Other Holders, and Lyondell, as applicable, on the one hand,
and the Underwriters on the other from the offering of the Common Stock. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (f) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of such Holder, Other Holders or Lyondell, as
applicable, on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by such Holder, Other
Holders or Lyondell, as applicable, on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Common Stock purchased under this Agreement (before
deducting expenses) received by such Holder, Other Holders or by Lyondell, as
applicable, bear to the total underwriting discounts and commissions received
by the Underwriters with respect to the Common Stock purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault 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 such Holder, Other Holders, Lyondell or the
Underwriters and the party's relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. Such Holder,
Other Holders, Lyondell and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection
10
(g) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (g). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (g) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (g), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Common Stock underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(g) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(h) The obligations of Lyondell under this Section 9 shall be in addition to
any liability which Lyondell may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act.
10. Rule 144. Lyondell shall take such measures and file such information,
documents and reports as shall be required by the SEC as a condition to the
availability of Rule 144 (or any successor provision).
11. Transfer of Registration Rights.
(a) ARCO may transfer all or any portion of its rights under this Agreement
to any transferee (each, a "transferee") of an amount of Registrable Securities
owned by ARCO exceeding 1 percent of the outstanding class of such Securities
at the time of transfer. Any transfer of registration rights pursuant to this
Section shall be effective upon receipt by Lyondell of written notice from ARCO
stating the name and address of any transferee and identifying the amount of
Registrable Securities with respect to which the rights under this Agreement
are being transferred and the nature of the rights so transferred. In
connection with any such transfer, the term "ARCO" as used in this Agreement
(other than in this Section 11, Section 4(b)(i)(2) and Section 1(b)) shall,
where appropriate to assign the rights and obligations of ARCO hereunder to
such direct transferee, be deemed to refer to the transferee holder of such
Registrable Securities. ARCO and such transferees may exercise the registration
rights hereunder in such proportion as they shall agree among themselves;
provided, that in no event shall Lyondell be required to effect more than an
aggregate of three (3) registrations pursuant to Section 3 of this Agreement
and each such registration shall be at the request of one or more Holders.
(b) After any such transfer, ARCO shall retain its rights under this
Agreement with respect to all other Registrable Securities owned by ARCO.
(c) Upon the request of ARCO, Lyondell shall execute a Registration Rights
Agreement with such transferee or a proposed transferee substantially similar
to this Agreement, and any demand registrations granted to such transferee
shall reduce the then remaining number of demand registrations to which ARCO is
entitled under Section 3(a) hereof.
12. Payment of Certain Defense Costs. Subject to the provisions of this
Section 12, ARCO hereby agrees, in the event of an actual or threatened legal
proceeding arising in connection with a registration effected pursuant to
Section 2 or 3 hereof, to pay all Defense Costs (as defined herein) as they are
incurred by or on behalf of (i) Lyondell and each officer and director of
Lyondell and each person, if any, who controls Lyondell (other than ARCO)
within the meaning of the Act, and (ii) the underwriters, if any, in connection
with any such registration, and each person, if any, who controls any such
11
underwriter within the meaning of the Act; provided, however, that the persons
described in clauses (i) and (ii) shall hereinafter be referred to collectively
as the "Designated Defendants;" and, provided, further, that in the event (A)
that the applicable underwriting agreement (including the Underwriting
Agreement) provides that Lyondell shall reimburse the Underwriter(s) for any
Defense Costs incurred by such Underwriter(s) and (B) that such Underwriters
request Lyondell to make any such payments, ARCO, in accordance with the
provisions of this Section 12, either shall pay such Defense Costs to such
Underwriter(s) or contemporaneously shall reimburse Lyondell for any such
payments Lyondell makes to such Underwriter(s), in either case, within such
time periods as may be necessary to prevent Lyondell from defaulting with
respect to any obligation to reimburse the Underwriter(s) for such expenses
under the applicable provision of the underwriting agreement. "Defense Costs"
shall mean the following costs and expenses incurred by the Designated
Defendants: (A) all reasonable and customary fees and expenses of counsel for
each of the Designated Defendants; (B) all reasonable and customary fees and
expenses of local counsel for the Designated Defendants; (C) all other
reasonable and customary out-of-pocket costs incurred by the Designated
Defendants as a result of an actual or threatened legal proceeding arising in
connection with this Registration Rights Agreement or a registration effected
pursuant to Section 2 or 3 hereof including without limitation expenses
incurred for retaining the services of experts and consultants and in
responding to discovery requests. Lyondell hereby agrees, in the event of a
legal proceeding arising in connection with a registration effected pursuant to
Section 2 or 3 hereof, that, as between Lyondell and ARCO, ARCO shall have the
lead in managing the defense of the proceeding. Lyondell further agrees that it
will reimburse ARCO for its "applicable share" of Defense Costs in the event
that a court of competent jurisdiction makes a final determination, after the
exhaustion of all appeals, that Lyondell acted with an intent to defraud or
with a reckless disregard for the truth and in doing so made material
misrepresentations or omissions of material fact in the Lyondell Documents, as
applicable; provided, however, that for this purpose Lyondell's applicable
share of Defense Costs shall in no event exceed those Defense Costs that
Lyondell would have incurred in the absence of ARCO's undertaking to pay
Defense Costs as provided in this Section 12; and provided, further, that this
Section 12 shall be of no force and effect in the event ARCO owns less than 20
percent of the issued and outstanding Lyondell Common Stock immediately
preceding registration pursuant to Section 3 hereof.
13. Miscellaneous.
(a) Injunctions. Irreparable damage would occur in the event that any of the
provisions of this Agreement was not performed in accordance with its specific
terms or was otherwise breached. Therefore, the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof
in any court having jurisdiction, such remedy being in addition to any other
remedy to which they may be entitled at law or in equity.
(b) Severability. If any term or provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term or provision; provided, however, that if such effort is not
successful, this Agreement shall be deemed to be void and of no further force
or effect.
(c) Further Assurances. Subject to the specific terms of this Agreement, each
of the parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be
reasonably required in order to effectuate the purposes of this Agreement and
to consummate the transactions contemplated hereby.
(d) Waivers, Etc. No failure or delay on the part of either party hereto in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
12
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be effective unless
the same shall be in writing, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(e) Entire Agreement and Amendment. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof. The
section headings contained in this Agreement are solely for the purpose of
reference, and shall not in any way affect the meaning or interpretation of
this Agreement. This Agreement may not be amended either in whole or in part
except in writing executed by ARCO and Lyondell which refers to this Agreement;
any such amendment shall bind transferees pursuant to Section 11 and Designated
Defendants pursuant to Section 12.
(f) Counterparts. For the convenience of the parties, this Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original but all of which together shall be one and the same instrument.
(g) Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein shall be validly given, made or
served, if in writing and delivered personally, by facsimile or sent by
registered mail, postage prepaid as follows:
(i) if to ARCO, to
Atlantic Richfield Company
515 South Flower Street
Los Angeles, California 90071
Attention: Treasurer
Facsimile No. (213) 486-3006
(ii) if to Lyondell, to
Lyondell Petrochemical Company
One Houston Center
1221 Mc Kinney Street
Suite 1600
Houston, Texas 77010
Attention: Treasurer
Facsimile No. (713) 652-4538
(iii) if to a Holder of Registrable Securities, to the name and address
as the same appear in the security transfer books of Lyondell or such other
address as any party (or other Holders of Registrable Securities) may, from
time to time, designate in a written notice in a like manner. Notice given
by facsimile shall be deemed delivered on the business day after it is
received by the recipient. Notice given by mail as set out above shall be
deemed delivered five calendar days after the date the same is mailed.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
(i) Assignment. Except as provided herein, the parties may not assign their
rights under this Agreement. Lyondell may not delegate its obligations under
this Agreement.
(j) No Third Party Beneficiaries. The parties hereto agree that (i) no other
person other than a transferee pursuant to Section 11 or the Designated
Defendants pursuant to Section 12 shall have any
13
rights or remedies under or by reason of this Agreement, whether as a third
party beneficiary or otherwise, and (ii) the parties hereto shall retain full
rights and power to amend or modify this Agreement pursuant to an agreement
entered into by the parties in writing, except that no such amendment or
modification shall act to impair the rights of a transferee then existing
pursuant to Section 11 without the consent in writing of such transferee.
(k) Termination. ARCO and Lyondell hereby agree that, if the Notes offering
is not consummated pursuant to the terms of the Underwriting Agreement, this
Agreement shall terminate immediately.
(l) Underwriting Agreement. In connection with the Underwriting Agreement,
ARCO and Lyondell hereby agree as follows:
(i) All references in the Underwriting Agreement to statements or
omissions made in reliance upon or in conformity with information furnished
in writing to ARCO by Lyondell either directly or through an "Underwriter"
(which term is defined, for purposes of this paragraph (l), as in the
Underwriting Agreement), shall be deemed to refer only to the information
in the "ARCO Registration Statement" or "ARCO Prospectus" (which terms are
defined, for purposes of this paragraph (l), as in the Underwriting
Agreement) included under the heading designated "LYONDELL PETROCHEMICAL
COMPANY" (excluding the first paragraph thereof); and
(ii) All references in the Underwriting Agreement to statements or
omissions made in reliance upon or in conformity with information furnished
in writing to Lyondell by ARCO either directly or through an Underwriter,
shall be deemed to refer only to the information in the "Lyondell
Registration Statement" or "Lyondell Prospectus" (which terms are defined,
for purposes of this paragraph (l), as in the Underwriting Agreement)
included under the heading designated "RELATIONSHIP WITH ARCO--General" and
"--Registration Rights Agreement with ARCO."
In Witness Whereof, ARCO and Lyondell have caused this Agreement to be duly
executed as of the date first above written.
Atlantic Richfield Company
By __________________________________
Terry G. Dallas
Vice President and Treasurer
Lyondell Petrochemical Company
By __________________________________
Russell S. Young
Senior Vice President, Chief
Financial Officer and Treasurer
14