EXHIBIT 10.14
AMENDED AND RESTATED PARENT AGREEMENT
among
LYONDELL CHEMICAL COMPANY,
MILLENNIUM CHEMICALS INC.
AND
EQUISTAR CHEMICALS, LP
as amended through November 6, 2002
TABLE OF CONTENTS
Page
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SECTION 1 GUARANTEE OF OBLIGATIONS .................................... 4
1.1 Guarantee .................................................... 4
1.2 Guarantee Regarding Interested Owner Agreements .............. 4
1.3 No Demand or Notice .......................................... 5
1.4 Waiver of Resort to Security ................................. 5
1.5 No Discharge ................................................. 5
1.6 Waivers by the Parent ........................................ 5
1.7 No Reduction ................................................. 5
1.8 Enforcement .................................................. 6
1.9 Continued Effectiveness ...................................... 6
1.10 Certain Defenses ............................................. 6
1.11 Parties in Interest .......................................... 6
1.12 Parent Net Worth ............................................. 6
SECTION 2 OWNERSHIP AND BUSINESS OF PARTNER SUBS ...................... 7
2.1 Restrictions on Transfer and Pledge of Partner Sub Stock ..... 7
2.2 Right of First Option ........................................ 9
2.3 Prohibition on Affiliated Obligor Bankruptcy, Etc ............ 11
2.4 Special Purpose Subsidiaries ................................. 11
SECTION 3 STANDSTILL AGREEMENT AND CERTAIN OTHER MATTERS .............. 12
3.1 Standstill ................................................... 12
3.2 Exceptions ................................................... 12
3.3 [Intentionally Omitted] ...................................... 13
3.4 [Intentionally Omitted] ...................................... 13
SECTION 4 MISCELLANEOUS ............................................... 13
4.1 No Waivers ................................................... 13
4.2 Expenses in Connection with Exercise ......................... 13
4.3 Subordination and Subrogation ................................ 13
4.4 Confidentiality and Use of Information ....................... 14
4.5 Competing Businesses ......................................... 14
4.6 Further Assurances ........................................... 14
4.7 Assignment; Successors and Assigns............................ 14
4.8 Benefits of Agreement Restricted to the Parties .............. 14
4.9 Notices ...................................................... 15
4.10 Severability ................................................. 15
4.11 Termination .................................................. 15
4.12 Construction and Certain Definitions ......................... 16
4.13 Counterparts ................................................. 16
4.14 Governing Law ................................................ 16
4.15 Jurisdiction; Consent to Service of Process; Waiver .......... 16
4.16 Waiver of Jury Trial ......................................... 17
4.17 Dispute Resolution ........................................... 17
4.18 Obligations Regarding Affiliates ............................. 17
4.19 Amendment .................................................... 17
APPENDICES
Appendix A List of Related Agreements
Appendix B Dispute Resolution Procedures
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AMENDED AND RESTATED PARENT AGREEMENT
This Amended and Restated Parent Agreement (this "Agreement") is made as of
this 6th day of November, 2002 among Lyondell Chemical Company, a Delaware
corporation ("Lyondell"), Millennium Chemicals Inc., a Delaware corporation
("Millennium"), and Equistar Chemicals, LP, a Delaware limited partnership (the
"Partnership," and together with Lyondell and Millennium, the "Parties").
WHEREAS, pursuant to the terms of the Master Transaction Agreement dated as
of July 25, 1997 between Lyondell and Millennium (the "Initial Master
Transaction Agreement"), the Partnership was formed under the laws of the State
of Delaware pursuant to the Limited Partnership Agreement dated October 10, 1997
(the "Old Partnership Agreement"), with Lyondell Petrochemical G.P. Inc., a
Delaware corporation ("Lyondell GP"), and Millennium Petrochemicals GP LLC, a
Delaware limited liability company ("Millennium GP"), as the general partners
and Lyondell Petrochemical L.P. Inc., a Delaware corporation ("Lyondell LP"),
and Millennium Petrochemicals LP LLC, a Delaware limited liability company
("Millennium LP" and together with Millennium GP, the "Millennium Partner
Subs"), as the limited partners of the Partnership.
WHEREAS, in connection with the closing of the transactions contemplated by
the Initial Master Transaction Agreement, Lyondell and Millennium entered into
the Parent Agreement with the Partnership dated as of December 1, 1997 (the
"Initial Parent Agreement"), providing for, among other things, certain
guarantees of performance by their respective Affiliated Obligors (as defined
therein) and for certain restrictions on the transfer of their respective
Partner Sub Stock (as defined therein).
WHEREAS, the Partnership, Occidental Petroleum Corporation, a Delaware
corporation ("OPC"), Lyondell and Millennium entered into a Master Transaction
Agreement dated May 15, 1998 (the "Second Master Transaction Agreement"),
providing for, among other things, the admission of Occidental Petrochem Partner
GP, Inc., a Delaware corporation ("Occidental GP"), Occidental Petrochem Partner
1, Inc., a Delaware corporation ("Occidental LP1"), and Occidental Petrochem
Partner 2, Inc., a Delaware corporation ("Occidental LP2"), as partners in the
Partnership.
WHEREAS, in connection with the closing of the transactions contemplated by
the Second Master Transaction Agreement, Lyondell, Occidental Chemical
Corporation, a New York corporation ("OCC"), Oxy CH Corporation, a California
corporation ("Oxy CH"), OPC and Millennium entered into the Amended and Restated
Parent Agreement with the Partnership dated as of May 15, 1998, as amended by a
First Amendment to Amended and Restated Parent Agreement dated June 30, 1998 and
modified by an Assignment and Assumption Agreement dated June 19, 1998 among
OCC, Oxy CH and Occidental Chemical Holding Corporation, a California
corporation ("OCHC") (the "Second Parent Agreement"), providing for, among other
things, certain guarantees of performance by their respective Affiliated
Obligors (as defined therein) and for certain restrictions on the transfer of
their respective Partner Sub Stock (as defined therein).
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WHEREAS, Lyondell, OCHC, OCC and Oxy CH entered into an Occidental Partner
Sub Purchase Agreement dated July 8, 2002 (the "Oxy Partner Sub Purchase
Agreement"), providing for, among other things, the purchase by Lyondell (i)
from OCC of all of the outstanding common stock of Occidental LP1 and (ii) from
Oxy CH of all of the outstanding common stock of Occidental GP and Occidental
LP2.
WHEREAS, in connection with the transactions contemplated by the Oxy
Partner Sub Purchase Agreement, Lyondell, Millennium, OPC, certain of their
affiliates, and the Partnership entered into a Letter Agreement dated May 31,
2002 (the "Letter Agreement"), providing for, among other things, (i) certain
amendments to the Second Parent Agreement effective as of the closing of the
transactions contemplated by the Oxy Partner Sub Purchase Agreement, (ii) the
execution and delivery of an amended and restated parent agreement and (iii) an
acknowledgement and agreement about termination of the Second Parent Agreement
with respect to OPC, OCC, OCHC and Oxy CH effective from and after the closing
of the transactions contemplated by the Oxy Partner Sub Purchase Agreement.
WHEREAS, the closing of the transactions contemplated by the Oxy Partner
Sub Purchase Agreement occurred on August 22, 2002 and effective as of that date
ownership of Occidental GP, Occidental LP1 and Occidental LP2 was sold, assigned
and delivered to Lyondell and as of that date Occidental and its Affiliates are
no longer the owners of any interest in the Partnership.
WHEREAS, on September 6, 2002 Occidental GP was merged with and into
Lyondell GP with Lyondell GP the surviving entity.
WHEREAS, on November 6, 2002, a Certificate of Amendment to the Certificate
of Incorporation of each of Occidental LP1 and Occidental LP2 was filed with the
Secretary of State of the State of Delaware whereby the name of Occidental
Petrochem Partner 1, Inc. was changed to Lyondell (Pelican) Petrochemical L.P.1,
Inc. ("Lyondell (Pelican) LP1") and the name of Occidental Petrochem Partner 2,
Inc. was changed to Lyondell (Pelican) Petrochemical L.P.2, Inc. ("Lyondell
(Pelican) LP2").
WHEREAS, Lyondell and Millennium are each a "Parent" for purposes of this
Agreement.
WHEREAS, Lyondell GP, Lyondell LP, Lyondell (Pelican) LP1 and Lyondell
(Pelican) LP2 are referred to herein as the "Lyondell Partner Subs."
WHEREAS, Lyondell GP, Lyondell LP and, effective from and after August 22,
2002, Occidental GP (now Lyondell GP), Lyondell (Pelican) LP1 and Lyondell
(Pelican) LP2, together with any other Affiliate of Lyondell that is a party to
any of the Related Agreements, are referred to herein as the "Lyondell
Affiliated Obligors." The Millennium Partner Subs, together with any other
Affiliate of Millennium that is a party to any of the Related Agreements, are
referred to herein as the "Millennium Affiliated Obligors."
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WHEREAS, the Lyondell Affiliated Obligors and the Millennium Affiliated
Obligors, collectively or individually as the context may require, are referred
to herein as the "Affiliated Obligors." The Lyondell Partner Subs and the
Millennium Partner Subs, collectively or individually as the context may
require, are referred to herein as the "Partner Subs."
WHEREAS, (i) in connection with the closing of the transactions effected
pursuant to the Initial Master Transaction Agreement and the Second Master
Transaction Agreement, the Lyondell Parent, Millennium Parent, Oxy CH, OCC and
OCHC and certain of their respective Affiliates, have entered into various
agreements and other legal documents, including the Amended and Restated Limited
Partnership Agreement of the Partnership dated as of May 15, 1998, the Agreement
and Plan of Merger and Asset Contribution dated May 15, 1998 the "Occidental
Contribution Agreement") among the Partnership, Occidental GP (now Lyondell GP),
Occidental LP1 (now Lyondell (Pelican) LP1), Occidental LP2 (now Lyondell
(Pelican) LP2) and Oxy Petrochemicals Inc. ("OPI"), services agreements and
other asset contribution agreements, as applicable, (ii) the Lyondell Parent,
Millennium Parent, Oxy CH, OCC and OCHC and certain of their respective
Affiliates have entered into the Amended and Restated Limited Partnership
Agreement of the Partnership dated as of August 24, 2001 and (iii) the Lyondell
Parent, Millennium Parent, Oxy CH, OCC and OCHC, certain of their respective
Affiliates and the Partnership have entered into the Letter Agreement, and (iv)
in connection with the closing of the transactions effected pursuant to the Oxy
Partner Sub Purchase Agreement, the Lyondell Parent, Millennium Parent and, by
special joinder, OCC, are entering into an Amended and Restated Limited
Partnership Agreement of the Partnership dated as of the date hereof (the
"Partnership Agreement") (collectively and including this Agreement, the
"Related Agreements"), each of which is integrally related to the capitalization
or operations of the Partnership and is listed on Appendix A hereto. The Related
Agreements (other than this Agreement) and any additional agreements that may
from time to time be added to Appendix A hereto by agreement of the Lyondell
Parent and Millennium Parent, as they may in the future be amended,
supplemented, restated or otherwise modified, are referred to herein as the
"Other Agreements."
WHEREAS, this Agreement provides for the continuation of obligations and
restrictions set forth in (i) the Initial Parent Agreement and the Second Parent
Agreement which were essential to the consummation of the closing pursuant to
the Initial Master Transaction Agreement, the Second Master Transaction
Agreement and the entering into and effectiveness of the Other Agreements
entered into in connection therewith, and (ii) the Letter Agreement.
WHEREAS, the Lyondell Parent and Millennium Parent is each willing, solely
for the benefit of the Beneficiaries (as defined below in Section 1.11) and
their successors and assigns, to guarantee the performance by its Affiliated
Obligors of certain of the obligations of such Affiliated Obligors as set forth
in this Agreement.
WHEREAS, the Lyondell Parent and the Millennium Parent is each willing to
subject the Partner Sub Stock (as defined herein) to certain restrictions on
transfer, as set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants of the Parties hereto, the Parties hereby agree as follows:
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SECTION 1
GUARANTEE OF OBLIGATIONS
1.1 Guarantee. Each Parent hereby unconditionally, absolutely and
irrevocably guarantees, undertakes and promises to cause, as herein provided,
the due and punctual payment and the full and prompt performance by its
Affiliated Obligors of all of the amounts to be paid and all of the terms and
provisions to be performed or observed by or on the part of its Affiliated
Obligors under the Other Agreements in accordance with the terms thereof (all
such terms and provisions as now or hereafter in existence being collectively
called the "Obligations") as follows: in the event that its Affiliated Obligors
shall fail in any manner whatsoever to pay, perform or observe any of their
Obligations, when and as the same shall be required to be paid, performed or
observed under the terms of the Other Agreements, such Parent will itself duly
and punctually pay, or fully and promptly perform or observe, as the case may
be, such Obligations, or cause the same to be duly and punctually paid, or fully
and promptly performed or observed, in each case as if such Parent were itself
the obligor with respect to such Obligations under the Other Agreements. Insofar
as this Section 1.1 relates to the obligations of an Affiliated Obligor under
the Partnership Agreement, no Parent shall be required to make, or cause a
Partner Sub to make, any contribution to the Partnership that such Partner Sub
is not otherwise required to make pursuant to the terms of Section 2.3, 2.4, or
12.2(d)(ii) of the Partnership Agreement. Insofar as this Section 1.1 applies to
Other Agreements other than the Partnership Agreement, the term "Affiliated
Obligors" will not include the Partnership nor any partner in the Partnership in
its capacity as such. Notwithstanding the foregoing, this Section 1.1 shall not
apply to Obligations that are within the scope of Section 1.2.
1.2 Guarantee Regarding Interested Owner Agreements. Each Parent
acknowledges that the Partnership Agreement sets forth definitions of
"Conflicted General Partner" and "Nonconflicted General Partner," and provides
that the Nonconflicted General Partners (whether one or more) have certain
exclusive rights to control the Partnership with respect to any Conflict
Circumstance (as defined in the Partnership Agreement); and accordingly, without
limiting the rights of its Partner Subs under Section 6.8 of the Partnership
Agreement, and without prejudice to any rights, remedies or defenses the
Partnership may have in respect of any such Other Agreement or Conflict
Circumstance, each Parent hereby agrees to cause its respective Partner Subs (i)
to cause the Partnership to pay, perform and observe all of the Obligations to
be paid, performed or observed by or on the part of the Partnership under the
Other Agreements, in accordance with the terms thereof, to the extent that such
Partner Sub is a Nonconflicted General Partner and is thereby entitled to cause
the payment, performance and observance of such Obligations and (ii) except to
the extent inconsistent with its obligations under Section 1.2(i), to abide by
its obligations as a Nonconflicted General Partner with respect to any Conflict
Circumstance arising in connection with any Other Agreement in accordance with
the terms of the Partnership Agreement applicable thereto; provided, however,
that each Parent's responsibility under this Section 1.2 for a failure of the
Partnership to pay, perform or observe its Obligations under the Other
Agreements shall be limited to the circumstances in which the Partnership's
failure to so pay, perform or observe its obligations under the Other Agreements
was directly caused by an act or failure to act of its Partner Sub; provided,
further, that nothing in this Section 1.2 shall require a Parent to make or
cause such Partner Sub (i) to cure or mitigate any inability of the Partnership
to make any payment or to perform or observe any Obligations under any Other
Agreements, (ii) to cause the Partnership to require from the Partner Subs any
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cash contributions in respect of any payment, performance or observance involved
in such Conflict Circumstance, or (iii) to make any contribution to the
Partnership that such Partner Sub is not otherwise required to make pursuant to
Section 2.3, 2.4, or 12.2(d)(ii) of the Partnership Agreement.
1.3 No Demand or Notice. It shall not be a condition to the guarantees and
agreements set forth in Sections 1.1 and 1.2 above (together, the "Guarantee")
that a Beneficiary shall have first made any request of or demand upon, or given
any notice of the occurrence of a default under the Other Agreements or any
other notice whatsoever to, a Parent or its Affiliated Obligors or any other
Person, or shall have instituted any action or proceeding against any Affiliated
Obligor or any other Person in respect thereof, or shall have joined any
Affiliated Obligor or the Partnership in any such action or proceeding. A
Beneficiary in asserting the benefit of the Guarantee shall give prompt notice
to a Parent of any failure by its Affiliated Obligors or the Partnership to pay,
perform or observe any Obligation; provided, however, that any failure, delay or
defect in the giving of such notice shall not alter or affect the Guarantee
under this Agreement.
1.4 Waiver of Resort to Security. Each Parent further agrees that this
Agreement, insofar as it constitutes a guarantee of monetary Obligations,
constitutes a guarantee of payment when due and not of collection, and each
Parent waives any right to require as a condition to its Guarantee that any
resort be had by a Beneficiary to any security held for the payment of any
Obligations.
1.5 No Discharge. The Guarantee is and shall remain absolute and
unconditional irrespective of any circumstance that might otherwise constitute a
legal or equitable discharge of a surety or guarantor, as the case may be, with
respect to its Guarantee.
1.6 Waivers by the Parent. Each Parent hereby waives, with respect to the
Guarantee but without prejudice to the rights of the parties to the Other
Agreements, any notice of acceptance of this Agreement, grace, presentment,
demand, protest, notice of the occurrence of a default under the Other
Agreements and any other notice of any kind whatsoever and promptness in making
any claim or demand hereunder. The Guarantee shall not be affected by (i) the
failure of a Beneficiary to assert any claim or demand or to enforce any right
or remedy under the provisions of any of the Other Agreements or any agreement
related thereto or otherwise, (ii) any extension or renewal of any of the Other
Agreements or any agreement related thereto, (iii) any rescission, waiver,
amendment or modification of any of the terms or provisions of any of the Other
Agreements or of any agreement related thereto, including, without limitation,
any change in the time, manner or place of payment or performance of any of the
obligations under the Other Agreements, or (iv) the release of any security held
for payment of any Obligations.
1.7 No Reduction. The Guarantee shall not be subject to any reduction,
limitation, impairment or termination for any reason, including, without
limitation, any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever, except as provided in Section 1.10.
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1.8 Enforcement. Notwithstanding anything herein to the contrary, a
Beneficiary may proceed to enforce the Guarantee without first pursuing or
exhausting any right or remedy that it or any of its successors or assigns may
have against any Affiliated Obligor or a Parent or any other Person.
1.9 Continued Effectiveness. The Guarantee shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Obligation of an Affiliated Obligor is rescinded or must
otherwise be restored or returned by the Person receiving such payment upon the
insolvency, bankruptcy or reorganization of an Affiliated Obligor, all as though
such payment or part thereof had not been made.
1.10 Certain Defenses. Nothing herein is intended to deny to a Parent, and
it is expressly agreed that each Parent shall have and may assert, any and all
of the defenses, set-offs, counterclaims and other rights (other than those
relating to insolvency, bankruptcy or reorganization as described in Section
1.9) with regard to any Obligations that its Affiliated Obligors may possess
except any defense its Affiliated Obligors may possess relating to lack of
validity or enforceability of the Other Agreements or any other agreement or
instrument relating thereto as against its Affiliated Obligors arising from the
defective incorporation or other defective organization of its Affiliated
Obligors, their lack of qualification to do business in any applicable
jurisdiction or their defective corporate or other organizational authority to
enter into, deliver or perform the Other Agreements.
1.11 Parties in Interest. Section 1 of this Agreement shall inure solely to
the benefit of the Beneficiaries, each of whom has the right to enforce the
Guarantee against the Parents, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement. As used in this Agreement, "Beneficiaries" shall mean (i) as to any
obligations of Millennium, except for its obligations pursuant to Section 1.1
hereof with respect to the Partnership Agreement, the Partnership, Lyondell and
the Lyondell Affiliated Obligors, (ii) as to any obligations of Lyondell, except
for its obligations pursuant to Section 1.1 hereof with respect to the
Partnership Agreement, the Partnership, Millennium and the Millennium Affiliated
Obligors, and (iii) as to any obligations of a Parent pursuant to Section 1.1
hereof with respect to the Partnership Agreement, the other Parent. As used in
this Agreement, the term Parent includes any successor or transferee of the
Parent, and the term Affiliated Obligors includes any successor to or transferee
of the Affiliated Obligors' interest in the Partnership permitted pursuant to
the Partnership Agreement.
1.12 Parent Net Worth.
(a) Each Parent shall at all times maintain a GAAP Net Worth in an amount
sufficient to satisfy its known and potential obligations under this Agreement.
(b) Each Parent agrees that, as of the end of each fiscal quarter, either
(i) the excess of its GAAP Net Worth at such time over its Partnership
Investment at such time or (ii) the excess of its Equity Market Capitalization
at such time over its Adjusted Partnership Investment at such time, shall be at
least $250 million.
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(c) The term "GAAP Net Worth" means, for a Parent at any time, such
Parent's consolidated stockholders equity, determined in accordance with
generally accepted accounting principles ("GAAP"), as of the end of its most
recent fiscal quarter. The term "Equity Market Capitalization" means, for a
Parent at any time, (x) the aggregate market value of such Parent's outstanding
publicly traded equity securities, as of the end of its most recent fiscal
quarter (based on the average closing price for the most recent 20 trading days
on the principal stock exchange on which such securities are traded) plus (y)
the amount of stockholders equity, determined in accordance with GAAP,
attributable at such time to any equity securities of such Parent that are not
publicly traded. The term "Partnership Investment" means, for a Parent at any
time, its investment in the Partnership, determined in accordance with GAAP as
of the end of the most recent fiscal quarter. The term "Adjusted Partnership
Investment" means, for a Parent at any time, (A) Lyondell's investment in the
Partnership, determined in accordance with GAAP as of the end of the most recent
fiscal quarter, multiplied by (B) a fraction the numerator of which is the
aggregate Percentage Interest at such time of the Partner Subs owned by the
Parent whose Partnership Investment is being determined and the denominator of
which is the aggregate Percentage Interest at such time of the Partner Subs
owned by Lyondell. The term "Percentage Interest" is used as defined in the
Partnership Agreement.
(d) The provisions of Section 1.12(b) shall expire as to a Parent at such
time after November 30, 2004 at which no material Seven Year PCCL Claim (as
defined in the Asset Contribution Agreement (as defined in the Partnership
Agreement) applicable to such Parent, its Affiliated Obligors or, if applicable,
its predecessor Parent or its Affiliated Obligors) is outstanding against such
Parent, any of its Affiliated Obligors or, if applicable, its predecessor Parent
or its Affiliated Obligors.
SECTION 2
OWNERSHIP AND BUSINESS OF PARTNER SUBS
2.1 Restrictions on Transfer and Pledge of Partner Sub Stock.
(a) Each Parent agrees that except as otherwise provided below in this
Section 2.1 or Section 2.2 or with the written consent of the other Parent,
which consent may be granted or withheld in such Parent's sole discretion, it
will not, in any transaction or series of transactions, directly or indirectly,
(i) sell, assign or otherwise in any manner dispose of, whether by act, deed,
merger or otherwise ("Transfer") or (ii) mortgage, pledge, encumber or create or
suffer to exist any pledge, lien or encumbrance upon or security interest in
("Pledge"), all or any part of the capital stock (including any securities
convertible into or exchangeable for or carrying any rights to purchase,
subscribe for or otherwise acquire any such capital stock) of its Partner Subs
(collectively, the "Partner Sub Stock"). (Each of the defined terms "Transfer"
and "Pledge" is used herein both as a noun and as a verb.) Any attempt by a
Parent to Transfer or Pledge all or a portion of its Partner Sub Stock in
violation of this Agreement shall be void ab initio and shall not be effective
to Transfer such Partner Sub Stock or any portion thereof. The Partnership
Agreement contains provisions relating to the Transfer and Pledge of the Partner
Subs' direct interests in the Partnership.
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(b) Each Parent agrees that all certificates representing shares of Partner
Sub Stock, whether currently owned or hereafter acquired, shall carry the
following legend, which legend each Parent agrees to cause to be placed thereon
and to cause to remain thereon as long as such shares are subject to the
restrictions of this Agreement:
THE SALE, ASSIGNMENT, PLEDGE OR OTHER TRANSFER OR HYPOTHECATION OF THE
STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS
PURSUANT TO AND MAY NOT BE EFFECTED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF AN AGREEMENT BINDING UPON THE OWNER OF THE STOCK REPRESENTED
HEREBY. THE OWNER OR ISSUER WILL FURNISH A COPY OF SUCH AGREEMENT TO ANY
PROPOSED TRANSFEREE OR PLEDGEE WITHOUT CHARGE UPON REQUEST.
(c) Without the need for the consent of any Person, either Parent may
Transfer its Partner Sub Stock to any wholly-owned Affiliate of such Parent or
of a common parent.
(d) Without the need for the consent of any Person, each Parent may
Transfer all (but not less than all) of its Partner Sub Stock, if such Transfer
is in connection with (i) a merger, consolidation, conversion or share exchange
of such Parent or (ii) a sale or other disposition of (x) the Partner Sub Stock
plus (y) other assets representing at least fifty-percent (50%) of the book
value of such Parent's assets excluding the Partner Sub Stock, as reflected on
its most recent audited consolidated (or combined) financial statements;
provided, however, that the Successor Parent, if any, (A) shall succeed to and
be substituted for such Parent, with the same effect as if it had been named
herein and (B) shall execute an instrument wherein such Successor Parent shall
agree to be bound by the obligations of such Parent under this Agreement, with
the same effect as if it had been named herein, whereupon, unless such Parent
shall become a direct or indirect subsidiary of such Successor Parent, such
Parent shall thereupon be released from all obligations under Sections 1, 2 and
4 of this Agreement.
(e) Nothing in this Agreement shall prevent or restrict the Transfer or
Pledge of the capital stock, equity ownership interests or other securities of a
Parent and no such Transfer or Pledge of securities issued by a Parent shall be
deemed to constitute a Transfer or Pledge of Partner Sub Stock hereunder;
provided that, (i) in the event of a Transfer in the form of a transaction
described in clause (i) of Section 2.1(d) the Successor Parent, if any, shall
execute an instrument to the effect described in clause (B) of Section 2.1(d)
and (ii) following the consummation of any such Transfer or Pledge of securities
of a Parent, all the Partner Sub Stock of such Parent shall be held by the same
transferee or one or more transferees that are wholly-owned Affiliates of each
other or of a common parent entity or shall be Pledged to the same pledgee or
pledgees.
(f) For purposes of this Section 2.1, the term "Successor Parent" shall
mean the acquiring, succeeding or surviving entity in any transaction
contemplated by Section 2.1 (d) that owns the applicable Partner Sub Stock
following such transaction, if other than a Parent.
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(g) Each Parent may Pledge all (but not less than all) of its Partner Sub
Stock to any one or more Approved Lenders; provided that the Pledge shall be
evidenced by an instrument, reasonably satisfactory to the Partnership, wherein
the Approved Lender receiving such Pledge shall agree that in the event such
Approved Lender obtains a right of foreclosure on such Parent's Partner Sub
Stock, such Approved Lender will foreclose on the Partner Sub Stock of each of
such Parent's Partner Subs equally so that such Approved Lender will in all
events hold equal portions of Partner Sub Stock of (i) Lyondell GP, Lyondell LP,
Lyondell (Pelican) LP1 and Lyondell (Pelican) LP2 or (ii) Millennium GP and
Millennium LP, as the case may be. An "Approved Lender" shall be any bank,
insurance company, investment bank or other financial institution that is
regularly engaged in the business of making loans.
(h) Without the need for the consent of any Person, provided that such
merger does not cause a termination of the Partnership under Section
708(b)(1)(B) of the Code, (i) if Lyondell GP and Occidental GP are both
Affiliates of Lyondell, Lyondell GP and Occidental GP may be merged with either
Lyondell GP or Occidental GP as the surviving entity and (ii) if two or more
Partner Subs are both Limited Partners and such Partner Subs are Affiliates of
Lyondell, such Partner Subs may be merged together at any time.
2.2 Right of First Option.
(a) Without the consent of the other Parent, no Parent may Transfer less
than all of its Partner Sub Stock. Unless such Transfer is otherwise permitted
by Section 2.1, no Parent may Transfer its Partner Sub Stock for consideration
other than cash. Unless such Transfer is otherwise permitted by Section 2.1, a
Parent (the "Selling Parent") desiring to Transfer all of its Partner Sub Stock
to any Person (including the other Parent or any Affiliate thereof) shall give
written notice (the "Initial Notice") to the Partnership and the other Parent
(the "Offeree Parent") stating that the Selling Parent desires to Transfer its
Partner Sub Stock and stating the cash purchase price and all other terms on
which it is willing to sell (the "Offer Terms"). Delivery of an Initial Notice
shall constitute the irrevocable offer of the Selling Parent to sell its Partner
Sub Stock to the Offeree Parent hereunder.
(b) The Offeree Parent shall have the option, exercisable by delivering
written notice (the "Acceptance Notice") of such exercise to the Selling Parent
within 45 days of the date of the Initial Notice, to elect to purchase all of
the Partner Sub Stock of the Selling Parent on the Offer Terms described in the
Initial Notice. The Acceptance Notice shall set a date for closing the purchase,
such date to be not less than 30 nor more than 90 days after delivery of the
Acceptance Notice; provided that such time period shall be subject to extension
as reasonably necessary (up to a maximum of an additional 120 days after such 90
day period) in order to comply with any applicable filing and waiting period
requirements under the Hart-Scott-Rodino Antitrust Improvements Act. The closing
shall be held at the Partnership's offices. The purchase price for the Selling
Parent's Partner Sub Stock shall be paid in cash delivered at the closing. The
purchase shall be consummated by appropriate and customary documentation
(including the giving of representations and warranties substantially similar to
(i) those set forth in Sections 2.1 through 2.4 of the Initial Master
Transaction Agreement and (ii) customary representations and warranties
regarding the Selling Parent's title to its Partner Sub Stock).
9
(c) If the Offeree Parent does not elect to purchase all of the Selling
Parent's Partner Sub Stock within 45 days after the receipt of the Initial
Notice, the Selling Parent shall have a further 180 days during which it may,
subject to Sections 2.2(d) and (e), consummate the sale of its Partner Sub Stock
to a third party purchaser at a purchase price and on such other terms that are
no more favorable to such purchaser than the Offer Terms. If the sale is not
completed within such further 180-day period, the Initial Notice shall be deemed
to have expired and a new notice and offer shall be required before the Selling
Parent may make any Transfer of its Partner Sub Stock.
(d) Before the Selling Parent may consummate a Transfer of its Partner Sub
Stock to a third party in accordance with this Agreement, the Selling Parent
shall demonstrate to the other Parent that such proposed purchaser (or the
Person willing to serve as its guarantor as contemplated by Section 2.2(e)) has
outstanding indebtedness that is rated investment grade by either Moody's
Investor Services Inc. or Standard & Poor's Ltd., or if such proposed purchaser
(or such other Person) has no rated indebtedness outstanding, such Person shall
provide an opinion from one of such entities or from a nationally recognized
investment banking firm that it could be reasonably expected to obtain such a
rating.
(e) Notwithstanding the foregoing provisions of this Section 2.2, a Parent
may Transfer its Partner Sub Stock (other than pursuant to Section 2.1) only if
all of the following occur:
(i) The Transfer is accomplished in a non-public offering in
compliance with, and exempt from, the registration and qualification
requirements of all federal and state securities laws and regulations.
(ii) The Transfer does not cause a default under any material contract
which has been approved unanimously by the Partnership Governance Committee
(as defined in the Partnership Agreement) and to which the Partnership is a
party or by which the Partnership or any of its properties is bound.
(iii) The transferee executes an appropriate agreement to be bound by
this Agreement.
(iv) The transferor and/or transferee bears all reasonable costs
incurred by the Partnership in connection with the Transfer.
(v) The transferee (or the guarantor of the obligations of the
transferee) satisfies the criteria set forth in Section 2.2(d) and delivers
an agreement to the other Parent and the Partnership substantially in the
form of this Agreement.
(vi) The proposed transferor is not in default in the timely
performance of any of its material obligations to the Partnership.
(vii) The provisions of Section 2.2(f) are satisfied.
10
(f) No Parent may Transfer the Partner Sub Stock of any of its Partner Subs
to any Person unless such Parent simultaneously Transfers the Partner Sub Stock
of its other Partner Sub or Partner Subs (if the Parent has more than one
Partner Sub), to such Person or a wholly owned Affiliate of such Person or of a
common parent.
2.3 Prohibition on Affiliated Obligor Bankruptcy, Etc. Each Parent hereby
agrees that it will not, without the written consent of the other Parent, permit
any of its Affiliated Obligors (or their successors or assigns) (i) to commence
a voluntary action under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
other similar law, (ii) to institute a proceeding to be adjudicated a voluntary
bankrupt, (iii) to consent to the filing of a bankruptcy proceeding against it,
(iv) to fail to contest a bankruptcy proceeding against it, (v) to consent to
the appointment of a receiver, custodian, liquidator or trustee for it or for
all or any substantial portion of its property, (vi) in the case of its Partner
Subs, to issue or sell other than to such Parent any of its own Partner Sub
Stock or (vii) to effect, recognize or permit any transfer of any of its own
Partner Sub Stock other than in accordance with the provisions of Section 2 of
this Agreement.
2.4 Special Purpose Subsidiaries. Each Parent agrees that (i) the business
of its Partner Subs shall be restricted solely to the holding of the respective
interests in the Partnership and the doing of things necessary or incidental in
connection therewith, and (ii) it will cause its Partner Subs not to own any
assets, incur any liabilities or engage, participate or invest in any business
outside the scope of their businesses as described in clause (i); provided,
however, that this Section 2.4 shall not apply with respect to any wholly owned
Affiliates to whom such Partner Subs shall transfer their respective interests
in the Partnership if such wholly owned Affiliates are not bound by Section 9.6
of the Partnership Agreement. Notwithstanding the foregoing provisions of this
Section 2.4, this Section 2.4 shall not prohibit any Partner Sub from incurring
debt payable to its Parent or an Affiliate as long as:
(i) such debt is not transferable (by contract or operation of law) to
any Person other than its Parent or an Affiliate of its Parent;
(ii) no payment on such debt is permitted or required to be made if at
the time of such payment such Partner Sub is in Default under (and as
defined in) the Partnership Agreement or by making such payment such
Partner Sub would not be able to perform its obligations under the
Partnership Agreement.
Each Parent hereby agrees that it and its Affiliates shall not be entitled to,
and that the Partner Sub shall not be required to make, any payments on any such
debt payable by its Partner Sub if: (i) at the time of such payment such Partner
Sub is in Default under the Partnership Agreement, (ii) by making such payment
such Partner Sub would not be able to perform its obligations under the
Partnership Agreement, or (iii) such Parent is in default of its obligations
under Section 1.12 of this Agreement.
11
SECTION 3
STANDSTILL AGREEMENT AND CERTAIN OTHER MATTERS
3.1 Standstill. Each Parent agrees that until the expiration of 24 months
after the date on which such Parent and its Affiliates no longer hold an
interest in the Partnership, neither it, nor any of its Affiliates shall,
without prior written invitation or request of the other Parent: (i) in any
manner acquire, agree to acquire or make any proposal to acquire, directly or
indirectly, any securities, assets or property of the other Parent, whether such
agreement or proposal is made with or to the other Parent or a third party; (ii)
make any unsolicited proposal to enter into, directly or indirectly, any merger
or other business combination involving the other Parent; (iii) make, or in any
way participate, directly or indirectly, in any "solicitation" of "proxies" (as
such terms are used in the proxy rules of the Securities and Exchange
Commission) to vote, or seek to advise or influence any person with respect to
the voting of, any voting securities of the other Parent; (iv) form, join or in
any way participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) with respect to any voting securities of the
other Parent; (v) otherwise act, alone or in concert with others, to seek to
control the management, Board of Directors or policies of the other Parent; (vi)
disclose any intention, plan or arrangement inconsistent with the foregoing; or
(vii) advise, encourage, provide assistance (including financial assistance) to
or hold discussions with any other persons in connection with any of the
foregoing. Each Parent also agrees during such period not to: (i) request that
the other Parent (or its respective directors, officers, employees or agents),
directly or indirectly, amend or waive any provision of this Section 3.1
(including this sentence); or (ii) take any action which might reasonably be
expected to require that the other Parent to make a public announcement
regarding the possibility of a business combination or merger.
3.2 Exceptions. Notwithstanding the provisions of Section 3.1:
(a) Either Parent may, by notice to the other Parent, terminate the
provisions of Section 3.1 (as applied to both Parents) at any time within 30
days after the occurrence of any of the following events with respect to the
other Parent: (i) a Change of Control (as defined below) of such other Parent
shall have occurred, (ii) such other Parent shall have entered into a definitive
agreement providing for, or publicly announced its intention to effect, any
transaction involving a Change of Control of such other Parent or (iii) a tender
offer or exchange offer shall have been commenced or publicly announced that, if
consummated, would have the effect with respect to such other Parent described
in clause (c) of the definition of "Change of Control." A "Change of Control" of
a Parent shall mean the occurrence of any of the following events: (a) there
shall be consummated any consolidation, merger or share exchange of such Parent
(i) in which such Parent is not the continuing or surviving Person (other than a
consolidation, merger or share exchange with a wholly owned subsidiary of such
Parent in which all shares of common stock of such Parent outstanding
immediately prior to the effectiveness thereof are changed into or exchanged for
the same number of shares of common stock of such subsidiary) or (ii) pursuant
to which the common stock of such Parent is converted into cash, securities or
other property, other than, in each case, a consolidation, merger or share
exchange of such Parent in which the holders of the common stock immediately
prior to the consolidation, merger or share exchange hold, directly or
indirectly, at least a majority of the voting power and common equity of the
continuing or surviving Person immediately after such consolidation, merger or
share exchange; (b) such Parent's properties and assets are sold or otherwise
disposed of substantially as an
12
entirety on a consolidated basis to any Person or group of Persons in any one
transaction or a series of related transactions, other than as contemplated by
the Initial Master Transaction Agreement or the Second Master Transaction
Agreement; or (c) any Person or any Persons acting together which would
constitute a "group" (as defined in Section 3.1) (other than such Parent, any
subsidiary of such Parent, any employee stock purchase plan, stock option plan
or other stock incentive plan or program, retirement plan or automatic dividend
reinvestment plan or any substantially similar plan of such Parent or any
subsidiary of such Parent or any Person holding securities of such Parent for or
pursuant to the terms of any such employee benefit plan), together with any
Affiliates thereof, shall acquire beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934) of 50% or more of the voting stock of
such Parent.
(b) The terms of the first sentence of Section 3.1 shall not be applicable
to the purchase and sale of any securities of a Parent by independent
third-party managers of any pension or other related employee benefit plans who
are acting as passive investors in such Parent.
3.3 [Intentionally Omitted].
3.4 [Intentionally Omitted].
SECTION 4
MISCELLANEOUS
4.1 No Waivers. No failure or delay by a Beneficiary or a Party in
exercising any right or power under this Agreement, or any single or partial
exercise of any such right or power, shall preclude any other or further
exercise thereof or the exercise of any other right or power. Such single or
partial exercise of any right or power shall be cumulative and not exclusive of
any rights or remedies provided by law.
4.2 Expenses in Connection with Exercise. In the event of a dispute between
Parties regarding the exercise or enforcement of any of the rights of a
Beneficiary under this Agreement or the failure by a Party to perform or observe
any of the provisions of this Agreement, the Party that does not ultimately
prevail in such dispute shall be liable, and hereby agrees, to reimburse, on
demand, each other such Party for any and all costs and expenses, including the
fees and expenses of legal counsel and of any other counsel, experts,
consultants or agents, that such other Party may incur in connection therewith.
4.3 Subordination and Subrogation. The rights of a Parent against its
Affiliated Obligors arising from any payment or performance by a Parent
hereunder shall be subordinate in all respects to the rights of the
Beneficiaries against such Affiliated Obligors, and such Parent shall not
compete in any way with a Beneficiary in any winding-up or dissolution of such
Affiliated Obligors unless and until all sums due and to become due from such
Affiliated Obligors to the Beneficiaries have been paid in full. If any amount
shall be paid to a Parent in violation of this Section, such amount shall be
held in trust for the benefit of the Beneficiaries and shall forthwith be paid
to the Beneficiaries to be credited and applied to any sums owed or to be owed
by such Parent's Affiliated Obligors. Subject to the foregoing, upon payment of
all sums due or to become due by Affiliated Obligors to the Beneficiaries, the
Parent of such Affiliated
13
Obligors shall be subrogated to the rights of the Beneficiary against such
Affiliated Obligors, and the Beneficiaries agree to take at such Parent's
expense such steps as such Parent may reasonably request to implement such
subrogation.
4.4 Confidentiality and Use of Information.
(a) Each Parent agrees that it and its Affiliates shall be bound by the
terms and conditions of Section 13.1 of the Partnership Agreement as if such
Person was a "Partner" as defined in such agreement.
(b) Lyondell and Millennium shall consult with each other on an ongoing
basis with respect to disclosures regarding the Partnership and its business and
affairs that each is required to make in reports filed from time to time with
the Securities and Exchange Commission.
4.5 Competing Businesses. If a Parent or an Affiliate thereof desires to
initiate or pursue any opportunity to undertake, engage in, acquire or invest in
a Business Opportunity (as such term is defined in the Partnership Agreement),
such Person shall offer such Business Opportunity to the Partnership under the
terms and conditions set forth in Sections 9.3(c) and (d) of the Partnership
Agreement as if such Person were the "Proposing Partner" (as defined in the
Partnership Agreement) with respect thereto, and in such event the Partnership
shall have the rights and obligations with respect thereto set forth in such
Sections 9.3(c) and (d).
4.6 Further Assurances. From time to time, each Party agrees to execute and
deliver such additional documents and provide such additional information and
assistance as the Beneficiaries may reasonably require to carry out the terms of
this Agreement.
4.7 Assignment; Successors and Assigns.
(a) Except as provided in this Agreement and except that a Parent may
assign its rights or obligations under this Agreement to a third party in
connection with a transfer of direct interests in the Partnership owned by its
Partner Subs if such transfer is permitted and consummated in accordance with
the Partnership Agreement, no Parent may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of all the
Beneficiaries, which consent shall be in the sole and absolute discretion of
such Beneficiaries. Any purported assignment or delegation without such consent
shall be void and ineffective.
(b) Except as may be expressly provided herein, this Agreement shall be
binding upon and inure to the benefit of the successors of the Beneficiaries.
4.8 Benefits of Agreement Restricted to the Parties. This Agreement is made
solely for the benefit of the Parties and, with respect to Sections 1 and 4
(excluding Sections 4.4 and 4.5), the Beneficiaries (as defined in Section
1.11), and no other Person shall have any right, claim or cause of action under
or by virtue of this Agreement.
14
4.9 Notices.
(a) All notices, requests, demands and other communications (collectively,
"notices") required or may be given under this Agreement to a Parent or its
Partner Subs shall be in writing and shall be deemed to have been duly given if
and when (i) transmitted by facsimile with proof of confirmation from the
transmitting machine or (ii) delivered by commercial courier or other hand
delivery, as follows:
If to Lyondell If to the Lyondell Partner Subs
Lyondell Chemical Company Lyondell Chemical Company
1221 McKinney Street, Suite 700 1221 McKinney Street, Suite 700
Houston, Texas 77010 Houston, Texas 77010
Attention: Kerry A. Galvin Attention: Kerry A. Galvin
Facsimile Number: (713) 309-4718 Facsimile Number: (713) 309-4718
If to Millennium If to the Millennium Partner Subs
Millennium Chemicals Inc. Millennium Chemicals Inc.
230 Half Mile Road 230 Half Mile Road
Red Bank, New Jersey 07701 Red Bank, New Jersey 07701
Attention: William Carmean Attention: William Carmean
Facsimile Number: (732) 933-5270 Facsimile Number: (732) 933-5270
If to the Partnership
Equistar Chemicals, LP
1221 McKinney Street, Suite 700
Houston, Texas 77010
Attention: Gerald A. O'Brien
Facsimile Number: (713) 309-7312
or to such other address as such Party or Beneficiary shall have specified by
notice to the other Party.
4.10 Severability. In the event that any provisions of this Agreement shall
finally be determined to be unlawful, such provision shall, so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any materially adverse manner as to any Party, be deemed severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect.
4.11 Termination. Except for Sections 3.1, 3.2 and 3.4 (which sections
shall terminate only as provided therein), this Agreement shall terminate and be
of no further force and effect as to a Parent (i) as and when provided in
Section 2.1(d) or (ii) if and when such Parent Transfers all of its Partner Sub
Stock in a transaction permitted by Section 2.2; provided, however, that such
termination shall not discharge (x) any accrued Obligations owed by such Parent
as of the date of such termination or (y) any Obligations, whether arising
before or after such termination, under such Parent's Asset Contribution
Agreement (as such term is defined in the Partnership
15
Agreement) or any Related Agreement executed pursuant to such Asset Contribution
Agreement. In addition, the Guarantee by such Parent of Obligations of an
Affiliated Obligor other than a Partner Sub shall terminate as and when such
Parent ceases to be an Affiliate of such Affiliated Obligor, insofar as such
Guarantee relates to Obligations arising thereafter.
4.12 Construction and Certain Definitions.
(a) In construing this Agreement, the following principles shall be
followed: (i) no consideration shall be given to the captions of the articles,
sections, subsections or clauses, which are inserted for convenience in locating
the provisions of this Agreement and not as an aid in construction; (ii) no
consideration shall be given to the fact or presumption that any Party had a
greater or lesser hand in drafting this Agreement; (iii) examples shall not be
construed to limit, expressly or by implication, the matter they illustrate;
(iv) the word "includes" and its syntactic variants mean "includes, but is not
limited to" and corresponding syntactic variant expressions; (v) the plural
shall be deemed to include the singular, and vice versa; (vi) each gender shall
be deemed to include the other gender; and (vii) each exhibit, attachment and
schedule to this Agreement is a part of this Agreement.
(b) The term "Affiliate" shall mean any Person that directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition, the
term "control" shall have the meaning set forth in 17 CFR 230.405 as in effect
on the date hereof.
(c) The term "Person" shall mean any natural person or any corporation,
partnership, limited liability company, joint venture, association, trust or
other entity or organization.
4.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.
4.14 Governing Law. The laws of the State of Delaware shall govern the
construction, interpretation and effect of this Agreement without giving effect
to any conflicts of law principles.
4.15 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY TO THIS AGREEMENT OR ANY DISPUTE UNDER OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER RELATED HERETO
SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS OF THE STATE OF DELAWARE, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES TO THIS
AGREEMENT ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES TO THIS AGREEMENT SHALL
APPOINT THE CORPORATION TRUST COMPANY, THE PRENTICE-HALL CORPORATION SYSTEM,
INC. OR A SIMILAR ENTITY (THE "AGENT") AS AGENT TO RECEIVE ON ITS BEHALF SERVICE
16
OF PROCESS IN ANY PROCEEDING IN ANY SUCH COURT IN THE STATE OF DELAWARE. THE
FOREGOING CONSENTS TO JURISDICTION AND APPOINTMENTS OF AGENT TO RECEIVE SERVICE
OF PROCESS SHALL NOT CONSTITUTE GENERAL CONSENTS TO SERVICE OF PROCESS IN THE
STATE OF DELAWARE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE AND SHALL NOT BE
DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES HERETO. EACH PARENT
HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS.
4.16 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND INTENTIONALLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
4.17 Dispute Resolution. All disputes under this Agreement shall be
resolved in accordance with the Dispute Resolution Procedures set forth in
Appendix B.
4.18 Obligations Regarding Affiliates. Each Parent shall cause its
Affiliates (including any person controlling such Parent) to comply with all
provisions of this Agreement that apply to Affiliates of such Parent, and each
Parent shall be responsible for any failure of any such Affiliate to comply with
any such provision.
4.19 Amendment. All waivers, modifications, amendments or alterations of
this Agreement shall require the execution of a written instrument signed by
each of the Parties.
17
IN WITNESS WHEREOF, the Parties have executed and delivered this Amended
and Restated Parent Agreement as of the date first above written.
LYONDELL CHEMICAL COMPANY
By: /s/ KERRY A. GALVIN
------------------------------------------------
Name: Kerry A. Galvin
Title: Senior Vice President,
General Counsel and Secretary
MILLENNIUM CHEMICALS INC.
By: /s/ C. WILLIAM CARMEAN
------------------------------------------------
Name: C. William Carmean
Title: Senior Vice President
EQUISTAR CHEMICALS, LP
By: /s/ GERALD A. O'BRIEN
------------------------------------------------
Name: Gerald A. O'Brien
Title: Vice President, Deputy General Counsel
and Assistant Secretary
[Signature Page to Amended and Restated Parent Agreement
18
APPENDIX A
TO
PARENT AGREEMENT
LIST OF RELATED AGREEMENTS
1. Old Partnership Agreement.
2. $345 million promissory note dated December 1, 1997, of Lyondell LP payable
to the Partnership.
3. Asset Contribution Agreement dated as of December 1, 1997, between
Lyondell, Lyondell LP and the Partnership.
4. Asset Contribution Agreement dated as of December 1, 1997, between
Millennium Petrochemicals, Millennium LP and the Partnership.
5. Bill of Sale and Assignment dated December 1, 1997 from Lyondell to the
Partnership with respect to property specified on attached schedule.
6. Assignment of Trademarks dated November 25, 1997 from Lyondell to the
Partnership with respect to certain O&P Trademarks as listed on attached
schedule.
7. Assignment of Patents dated November 25, 1997 from Lyondell to the
Partnership with respect to certain O&P Patents as listed on attached
schedule.
8. Assumption Agreement dated December 1, 1997 between Lyondell as Assignor
and the Partnership as Assignee pursuant to the Asset Contribution
Agreement with respect to the assumption by Assignee of certain
liabilities.
9. Master Intellectual Property Agreement dated December 1, 1997 by and
between Lyondell and the Partnership.
10. Assignment dated December 1, 1997 between Lyondell as "Assignor" and the
Partnership as "Assignee" with respect to the contribution by Assignor of
LCR Agreements.
11. Assignment dated December 1, 1997 between Lyondell and the Partnership, of
Ground Lease (LMC) with respect to certain real property specified therein.
12. Assignment dated December 1, 1997 between Lyondell and the Partnership, of
Operating Agreement, Natural Gas Sales and Methanol Supply with respect to
Lyondell Methanol Company.
13. Administrative Services Agreement (as amended or otherwise modified from
time to time) effective as of December 1, 1997 between the Partnership and
Lyondell with respect to the provision of services as described in Appendix
A attached.
A-1
14. Letter Agreement dated December 1, 1997 between Lyondell and the
Partnership with respect to the net payment by the Partnership to Lyondell
for certain Administrative Services as described in Attachment 1 thereto.
15. Assignment dated November 25, 1997, but effective December 1, 1997, from
Lyondell to the Partnership, of leases specified therein (Channelview,
Texas Golf Courses).
16. Assignment dated November 25, 1997, but effective December 1, 1997, from
Lyondell to the Partnership, of leases specified therein (Alvin, Texas).
17. Assignment dated November 25, 1997, but effective as of December 1, 1997,
from Lyondell to the Partnership, of leases specified therein (Plano,
Texas).
18. Assignment dated November 25, 1997, but effective as of December 1, 1997,
from Lyondell to the Partnership, of leases specified therein (Chicago,
Illinois - CALPERS Lease).
19. Assignment of Sublease dated November 25, 1997, but effective as of
December 1, 1997, from Lyondell to the Partnership, of leases specified
therein (Chicago, Illinois - MATRIX Partners Sublease).
20. Assignment dated November 25, 1997, but effective as of December 1, 1997,
from Lyondell to the Partnership, of leases specified therein
(Philadelphia, Pennsylvania).
21. Assignment dated November 25, 1997, but effective December 1, 1997, from
Lyondell to the Partnership, of leases specified therein (Victoria, Texas).
22. Sublease Agreement dated November 25, 1997, but effective December 1, 1997,
by and between Lyondell and the Partnership with respect to Office Lease
Agreement dated December 31, 1985 and amended by 19 Amendments as described
on Exhibit A as attached thereto (Administrative Office Space, OHC).
23. General Warranty Deed dated November 25, 1997, but effective as of December
1, 1997, from Lyondell to the Partnership with respect to certain real
property specified therein (Channelview, Texas).
24. General Warranty Deed dated November 25, 1997, but effective as of December
1, 1997, from Lyondell to the Partnership, with respect to certain real
property specified therein (Mount Belvieu, Texas).
25. General Warranty Deed dated, November 25, 1997, but effective December 1,
1997, from Lyondell to the Partnership with respect to certain real
property specified therein (Bayport, Texas).
26. General Warranty Deed dated November 25, 1997, but effective December 1,
1997, from Lyondell to the Partnership with respect to certain real
property specified therein (Matagorda, Texas).
A-2
27. Conveyance and Assignment of Easements, Rights of Way, and Licenses dated
November 25, 1997, but effective as of December 1, 1997, from Lyondell to
the Partnership with respect to certain real property specified therein
(Pipeline Right of Way).
28. Bill of Sale and Assignment dated December 1, 1997 from Millennium
Petrochemicals to the Partnership with respect to the property set forth on
Schedule A attached.
29. Assignment of Trademarks dated November 21, 1997 between Millennium
Petrochemicals as Assignor and the Partnership as Assignee with respect to
the transfer of O&P Trademarks as set forth in the schedule attached.
30. Assignment of Patents dated November 21, 1997 between Millennium
Petrochemicals as Assignor and the Partnership as Assignee with respect to
the transfer of O&P Patents as set forth in the schedule attached.
31. Assumption Agreement effective as of December 1, 1997 between Millennium
Petrochemicals as Assignor and the Partnership as Assignee pursuant to the
Asset Contribution Agreement with respect to the assumption by the assignee
of certain liabilities.
32. Master Intellectual Property Agreement dated December 1, 1997 by and
between Millennium Petrochemicals and the Partnership.
33. Shared Services Agreement for Wastewater effective as of December 1, 1997
by and between Millennium Petrochemicals and the Partnership.
34. Shared Services Agreement for the LaPorte Complex effective as of December
1, 1997 by and between Millennium Petrochemicals and the Partnership with
respect to the services as specified therein and on the attachments and
appendix.
35. Shared Services Agreement for Water and Utility Instrument Air effective as
of December 1, 1997 by and between Millennium Petrochemicals and the
Partnership with respect to the services as specified therein and on the
attachments, exhibits and appendix.
36. Shared Services Agreement for the Northlake Office Complex effective as of
December 1, 1997 by and between Millennium Petrochemicals and the
Partnership with respect to services as specified therein and on
attachments and appendix.
37. Agreement for Interim Study at the LaPorte Complex effective as of December
1, 1997 by and between Millennium Petrochemicals and the Partnership.
38. Fuel Stream Agreement effective as of December 1, 1997 by and between
Millennium Petrochemicals and the Partnership.
39. Electricity Service Agreement effective as of December 1, 1997 by and
between Millennium Petrochemicals and the Partnership.
A-3
40. Sales Agreement (Vinyl Acetate Monomer), effective December 1, 1997 between
Millennium Petrochemicals as "Seller" and the Partnership as "Buyer".
41. Sales Agreement (Ethylene), effective December 1, 1997 between the
Partnership as "Seller" and Millennium Petrochemicals as "Buyer".
42. Sales Agreement (Purified Hydrogen), between the Partnership as "Seller"
and Millennium Petrochemicals as "Buyer" effective December 1, 1997.
43. Sales Agreement (Natural Gas), effective December 1, 1997 between the
Partnership as "Seller" and Millennium Petrochemicals as "Buyer".
44. Letter Agreement dated December 1, 1997 between Millennium Petrochemicals
and the Partnership regarding interim distribution logistics support.
45. Letter Agreement dated December 1, 1997 between Millennium Petrochemicals
and the Partnership with respect to the net payment for various shared
services.
46. Assignment of Railcar Lease dated December 3, 1997 by and between
Millennium Petrochemicals Inc. as "Assignor" and the Partnership as
"Assignee" (The Sumitomo Bank Leasing and Finance, Inc. Lease).
47. Assignment of Leasehold dated November 25, 1997 by and between Millennium
Petrochemicals and the Partnership with respect to certain real property
specified therein (Tuscola, Illinois).
48. Assignment of Leasehold dated December 1, 1997 by and between Millennium
Petrochemicals and the Partnership with respect to certain real property
specified therein (Fairport Harbor, Ohio).
49. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of lease specified therein (Clinton, Iowa).
50. Quit Claim Deed dated December 1, 1997 from Millennium Petrochemicals to
the Partnership with respect to certain real property specified therein
(Clinton, Iowa).
51. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Credit Union Sublease (Clinton, Iowa).
52. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Appurtenant Easements (Clinton, Iowa).
53. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Dock Lease and Agreement (Clinton, Iowa).
54. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Sub-lease Option to Purchase Agreement (Clinton, Iowa).
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55. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Cellular Telephone Sublease (Clinton, Iowa).
56. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Farm Leases (Clinton, Iowa).
57. Assignment dated December 1, 1997 between Millennium Petrochemicals and the
Partnership of Eastern Iowa Propane Lease (Clinton, Iowa).
58. Lease Agreement dated December 1, 1997 between Millennium Petrochemicals
and the Partnership with respect to certain real property specified therein
(Lease for Cincinnati Research Laboratory).
59. Warranty Deed dated December 1, 1997 from Millennium Petrochemicals to the
Partnership with respect to certain Real Property specified therein
(Clinton, Iowa).
60. General Warranty Deed dated December 1, 1997 from Millennium Petrochemicals
to the Partnership with respect to certain real property specified therein
(LaPorte, Texas).
61. Letter agreement dated December 1, 1997 from Millennium Petrochemicals to
the Partnership with respect to Millennium Petrochemicals agreement to
provide the Partnership an option on approximately 20+ acres of land
(LaPorte Expansion Land).
62. Warranty Deed dated November 25, 1997 from Millennium Petrochemicals to the
Partnership with respect to certain real property specified therein
(Morris, Illinois).
63. General Warranty Deed dated November 25, 1997 from Millennium
Petrochemicals to the Partnership with respect to certain real property
specified therein (Port Arthur, Texas).
64. General Warranty Deed dated November 25, 1997 from Millennium
Petrochemicals to the Partnership with respect to certain real property
specified therein (Chocolate Bayou, Texas).
65. Warranty Deed dated December 1, 1997 from Millennium Petrochemicals to the
Partnership with respect to certain real property specified therein
(Tuscola, Illinois).
66. General Warranty Deed dated December 1, 1997 from Millennium Petrochemicals
to the Partnership with respect to certain real property specified therein
(Heath, Ohio)
67. General Warranty Deed dated November 25, 1997 from Millennium
Petrochemicals to the Partnership with respect to certain real property
specified therein (Crockett, Texas)
68. Deed dated November 24, 1997 from Millennium Petrochemicals to the
Partnership with respect to certain real property specified therein
(Newark, New Jersey).
69. Grant Deed dated December 1, 1997 from Millennium Petrochemicals to the
Partnership with respect to certain real property specified therein
(Anaheim, California).
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70. Limited Warranty Deed dated December 1, 1997 from the Partnership to
Millennium Petrochemicals with respect to certain real property specified
therein (the Northlake Drive 0.1553 Acre Parcel Cincinnati-Research
Center-Northlake, Ohio).
71. General Warranty Deed (Conveyance between Adjoining Lot Owners) dated
December 1, 1997 from Millennium Petrochemicals to the Partnership with
respect to certain real property specified therein (Cincinnati-Research
Center-Northlake, Ohio).
72. General Warranty Deed (Conveyance between Adjoining Lot Owners) dated
December 1, 1997 from Millennium Petrochemicals to the Partnership with
respect to certain real property specified therein, the Northlake Drive
0.0987 Acre Parcel (Cincinnati-Research Center-Northlake, Ohio).
73. General Warranty Deed dated December 1, 1997 from Millennium Petrochemicals
to the Partnership with respect to certain real property specified therein,
the East Kemper Road and Northlake Drive 25.0864 Acre Parcel
(Cincinnati-Research Center-Northlake).
74. Declaration of Easements and Restrictive Covenants dated December 1, 1997
by Millennium Petrochemicals and the Partnership with respect to certain
real property specified therein (Cincinnati-Research Center-Northlake,
Ohio).
75. Assignment and Assumption dated December 1, 1997 by and between Millennium
Petrochemicals and the Partnership, of Service Agreement
(Cincinnati-Research Center-Northlake, Ohio).
76. Letter Agreement dated November 20, 1997 from Millennium Petrochemicals to
the Partnership with respect to Fiber-Optic Cable System, Northlake Drive
Property, Cincinnati, Ohio (Cincinnati-Research Center-Northlake, Ohio).
77. Parking Agreement dated December 1, 1997 between Millennium Petrochemicals
and the Partnership with respect to additional parking at the Northlake
Facility (Cincinnati-Research Center-Northlake, Ohio).
78. General Warranty Deed dated December 1, 1997 from Millennium Petrochemicals
to the Partnership with respect to certain real property specified therein
(Fairport Harbor, Ohio).
79. Assignment of Easements dated November 25, 1997 from Millennium
Petrochemicals to the Partnership with respect to certain real property
specified therein (Chocolate Bayou, Texas).
80. Easement Agreement dated December 1, 1997 to Millennium Petrochemicals from
the Partnership with respect to certain real property specified therein
(LaPorte, Texas).
81. Easement Agreement dated December 1, 1997 to the Partnership from
Millennium Petrochemicals with respect to certain real property specified
therein (LaPorte, Texas).
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82. Assignment (Mont Belvieu Pipeline Easements) dated November 25, 1997 from
Millennium Petrochemicals to the Partnership with respect to certain real
property specified therein.
83. General Warranty (Mont Belvieu Pipeline Fee Parcels) dated November 25,
1997 from Millennium Petrochemicals to the Partnership with respect to
certain real property specified therein.
84. Partnership Agreement.
85. Agreement and Plan of Merger and Asset Contribution dated as of May 15,
1998, among Occidental GP, Occidental LP1, Occidental LP2, OPI and the
Partnership.
86. Sales Agreement (Ethylene) dated as of May 15, 1998 by and between the
Partnership and OCC with respect to the sale of Ethylene by the Partnership
to OCC.
87. Operating Agreement dated as of May 15, 1998 by and between the Partnership
and OCC with respect to OCC providing certain services to the Partnership
after May 15, 1998.
88. Toll Processing Agreement dated May 15, 1998 between the Partnership and
OCC with respect to Ashtabula EO/EG tolling.
89. Amended and Restated Indemnity Agreement among OCC, Occidental GP,
Occidental LP1, Occidental LP2, Lyondell GP, Lyondell LP, Millennium GP,
Millennium LP and Millennium America Inc.
90. Letter Agreement dated May 15, 1998 between OCC and the Partnership with
respect to OCC providing a guarantee for the collection of $419,700,000 of
Partnership debt.
91. Letter Agreement dated May 15, 1998 between OCC and the Partnership with
respect to the prepayment or restructuring of the Occidental Assumed Debt.
92. Promissory Note for $419,700,000 dated May 15, 1998 of the Partnership
payable to Occidental LP2.
93. Promissory Note for $75 million dated May 15, 1998 of the Partnership
payable to Millennium LP.
94. Bill of Sale and Assignment dated May 15, 1998 from OCC to Occidental LP1
with respect to property specified on attached schedule.
95. Bill of Sale and Assignment dated May 15, 1998 from Occidental LP1 to the
Partnership with respect to property specified on attached schedule.
96. Patent Assignment dated May 15, 1998 from OCC to the Partnership with
respect to patents as listed on attached schedule.
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97. Assumption Agreement dated May 15, 1998 between Occidental LP1, Occidental
LP2 and Occidental GP, as Assignors, and the Partnership, as Assignee,
pursuant to the Agreement and Plan of Merger and Asset Contribution with
respect to the assumption by Assignee of certain liabilities.
98. Master Intellectual Property Agreement dated May 15, 1998 by and between
the Partnership and OCC.
99. Assignment of Partnership Interests dated May 15, 1998 from Occidental GP
to the Partnership with respect to interests in PD Glycol, a Texas limited
partnership.
100. Assignment of Leases dated May 15, 1998 from OCC to the Occidental LP1 with
respect to leases specified therein.
101. Assignment of Lease and Act of Exchange dated May 15, 1998 from Occidental
LP1 to the Partnership with respect to the lease specified therein,
together with such lease.
102. Assignment of Leases dated May 15, 1998 from Occidental LP1 to the
Partnership with respect to leases specified therein.
103. Assumption Agreement dated May 15, 1998 between OPI as Assignor and the
Partnership as Assignee with respect to Lease Intended for Security dated
December 18, 1991 ($205 million).
104. Termination and Release of Guaranty dated May 15, 1998 between Lyondell and
OCC with respect to the termination of Lyondell guaranty of certain
Partnership railcar leases.
105. Sublease dated May 15, 1998 from OCC to the Partnership with respect to
1990 railcar lease.
106. Sublease dated May 15, 1998 from OPI to the Partnership with respect to
1995 railcar lease.
107. Tax Indemnity Agreement dated May 15, 1998 between OCC and the Partnership
with respect to Sublease of 1990 railcar lease.
108. Tax Indemnity Agreement dated May 15, 1998 between OPI and the Partnership
with respect to Sublease of 1998 railcar lease.
109. Master Arbitration Amendment to Related Agreements dated May 15, 1998
between the Partnership, Lyondell and Millennium.
110. First Amendment to Lyondell Asset Contribution Agreement dated May 15, 1998
between the Partnership, Lyondell and Lyondell LP.
111. First Amendment to Millennium Asset Contribution Agreement dated May 15,
1998 between the Partnership, Millennium Petrochemicals and Millennium LP.
A-8
112. Transition Services Agreement between the Partnership and OCC to be entered
into pursuant to the Operating Agreement with respect to OCC providing
certain services to the Partnership.
113. Pipeline Acquisition Agreement dated as of May 15, 1998 between OCC and the
Partnership with respect to the Cyclohexane pipeline.
114. Trademark License Agreement dated as of May 15, 1998 among OCC, Occidental
and the Partnership with respect to the trademarks as set forth on the
schedule attached.
115. Assignment of Excluded Assets dated May 14, 1998 between OPI as Assignor
and OCC as Assignee with respect to certain assets described therein.
116. Assumption Agreement dated May 14, 1998 between OPI as Assignor and OCC as
Assignee with respect to certain liabilities described therein.
117. Termination Agreement and General Release dated May 15, 1998 among
Occidental, OPI, Occidental LP2 and Occidental Holding Company with respect
to certain intercompany debts.
118. Assumption Agreement dated May 15, 1998 between OPI as Assignor and
Occidental LP2 as Assignee with respect to certain intercompany debts.
119. Assignment and Assumption Agreement dated May 15, 1998 between OCC as
Assignor and the Partnership as Assignee with respect to Lease intended for
security dated March 28, 1994 by and between OCC and Pitney Bowes Credit
Corporation.
120. Letter from Lyondell to OCC and the Partnership regarding PVC technology.
121. Agreement regarding provision by the Partnership of certain support
facilities associated with the Lake Charles propylene fractionation unit to
be entered into pursuant to the Operating Agreement.
122. First Amendment to Amended and Restated Limited Partnership Agreement of
Equistar Chemicals, LP, dated as of June 30, 1998, by and among Lyondell
LP, Lyondell GP, Millenium LP, Millennium GP, Occidental GP, Occidental LP1
and Occidental LP2.
123. Amended and Restated Limited Partnership Agreement of Equistar Chemicals,
LP dated as of August 24, 2001, by and among by and among Lyondell LP,
Lyondell GP, Millenium LP, Millennium GP, Occidental GP, Occidental LP1 and
Occidental LP2.
124. Letter Agreement dated May 31, 2002, by and among Lyondell, Millennium,
OPC, certain of their respective affiliates and the Partnership.
125. Amended and Restated Limited Partnership Agreement of Equistar Chemicals,
LP dated as of November 6, 2002, by and among Lyondell GP, Lyondell LP,
Lyondell (Pelican) LP1, Lyondell (Pelican) LP2, Millennium GP and
Millennium LP.
A-9
APPENDIX B
TO
PARENT AGREEMENT
DISPUTE RESOLUTION PROCEDURES
(1) Binding and Exclusive Means. The dispute resolution provisions set forth in
this Appendix B shall be the binding and exclusive means to resolve all
disputes arising under this Agreement (each a "Dispute").
(2) Standards and Criteria. In resolving any Dispute, the standards and
criteria for resolving such dispute shall, unless the Parties involved in
the Dispute in their discretion jointly stipulate otherwise, be as set
forth in Appendix 1 to this Appendix B.
(3) ADR and Binding Arbitration Procedures. If a Dispute arises, the following
procedures shall be implemented (with references to "Parties" meaning the
Parties involved in the Dispute):
(a) Any Party may at any time invoke the dispute resolution procedures set
forth in this Appendix B as to any Dispute by providing written notice
of such action to the other Parties, and all Parties within five
Business Days after such notice shall schedule a meeting to be held in
Houston, Texas between the Parties. The meeting shall occur within 10
Business Days after notice of the meeting is delivered to the other
Parties. The meeting shall be attended by representatives of each
Party having decision-making authority regarding the Dispute as well
as the dispute resolution process and who shall attempt in a
commercially reasonable manner to negotiate a resolution of the
Dispute.
(b) The representatives of the Parties shall cooperate in a commercially
reasonable manner and shall explore whether techniques such as
mediation, minitrials, mock trials or other techniques of alternative
dispute resolution might be useful. In the event that a technique of
alternative dispute resolution is so agreed upon, a specific timetable
and completion date for its implementation shall also be agreed upon.
The representatives will continue to meet and discuss settlement until
the date (the "Interim Decision Date") that is the earliest to occur
of the following events: (i) an agreement shall be reached by the
Parties resolving the Dispute; (ii) one of the Parties shall determine
and notify the other Parties in writing that no agreement resolving
the Dispute is likely to be reached; (iii) if a technique of
alternative dispute resolution is agreed upon, the completion date
therefor shall occur without the Parties having resolved the Dispute;
or (iv) if another technique of alternative dispute resolution is not
agreed upon, two full meeting days (or such other time period as may
be agreed upon) shall expire without the Parties having resolved the
Dispute.
(c) If, as of the Interim Decision Date, the Parties have not succeeded in
negotiating a resolution of the dispute pursuant to subsection (b),
the Parties shall proceed under subsections (d), (e) and (f).
B-1
(d) After satisfying the requirements above, such Dispute shall be
submitted to mandatory and binding arbitration at the election of any
Party involved in the Dispute (the "Disputing Party"). The arbitration
shall be subject to the Federal Arbitration Act as supplemented by the
conditions set forth in this Appendix B. The arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association in effect on the date the notice of
arbitration is served, other than as specifically modified herein. In
the absence of an agreement to the contrary, the arbitration shall be
held in Houston, Texas. The Arbitrator (as defined below) will allow
reasonable discovery in the forms permitted by the Federal Rules of
Civil Procedure, to the extent consistent with the purpose of the
arbitration. During the pendency of the Dispute, each Party shall make
available to the Arbitrator and the other Parties all books, records
and other information within its control requested by the other
Parties or the Arbitrator subject to the confidentiality provisions
contained herein, and provided that no such access shall waive or
preclude any objection to such production based on any privilege
recognized by law. Recognizing the express desire of the Parties for
an expeditious means of dispute resolution, the Arbitrator may limit
the scope of discovery between the Parties as may be reasonable under
the circumstances. In deciding the substance of the Parties' claims,
the laws of the State of Delaware shall govern the construction,
interpretation and effect of this Agreement (including this Appendix
B) without giving effect to any conflict of law principles. The
arbitration hearing shall be commenced promptly and conducted
expeditiously, with each Party involved in the Dispute being allocated
an equal amount of time for the presentation of its case. Unless
otherwise agreed to by the Parties, the arbitration hearing shall be
conducted on consecutive days. Time is of the essence in the
arbitration proceeding, and the Arbitrator shall have the right and
authority to issue monetary sanctions against any of the Parties if,
upon a showing of good cause, that Party is unreasonably delaying the
proceeding. To the fullest extent permitted by law, the arbitration
proceedings and award shall be maintained in confidence by the
Arbitrator and the Parties.
(e) The Disputing Party shall notify the American Arbitration Association
("AAA") and the other Parties in writing describing in reasonable
detail the nature of the Dispute (the "Dispute Notice"). The
arbitrator (the "Arbitrator") shall be selected within 15 days of the
date of the Dispute Notice by all of the Parties from the members of a
panel of arbitrators of the AAA or, if the AAA fails or refuses to
provide a list of potential arbitrators, of the Center for Public
Resources and shall be experienced in commercial arbitration. In the
event that the Parties are unable to agree on the selection of the
Arbitrator, the AAA shall select the Arbitrator, using the criteria
set forth in this Appendix B, within 30 days of the date of the
Dispute Notice. In the event that the Arbitrator is unable to serve,
his or her replacement will be selected in the same manner as the
Arbitrator to be replaced. The Arbitrator shall be neutral. The
Arbitrator shall have the authority to assess the costs and expenses
of the arbitration proceeding (including the arbitrators', and
attorneys' fees and expenses) against any or all Parties.
B-2
(f) The Arbitrator shall decide all Disputes and all substantive and
procedural issues related thereto, and shall enforce this Agreement in
accordance with its terms. Without limiting the generality of the
previous sentence, the Arbitrator shall have the authority to issue
injunctive relief; however, the Arbitrator shall not have any power or
authority to (i) award consequential, incidental, indirect or punitive
damages or (ii) amend this Agreement. The Arbitrator shall render the
arbitration award, in writing, within 20 days following the completion
of the arbitration hearing, and shall set forth the reasons for the
award. In the event that the Arbitrator awards monetary damages in
favor of any Party, the Arbitrator must certify in the award that no
indirect, consequential, incidental, indirect or punitive damages are
included in such award. If the Arbitrator's decision results in a
monetary award, the interest to be granted on such award, if any, and
the rate of such interest shall be determined by the Arbitrator in his
or her discretion. The arbitration award shall be final and binding on
the Parties, and judgment thereon may be entered in any court of
competent jurisdiction, and may not be appealed except to the extent
permitted by the Federal Arbitration Act.
(4) Continuation of Business. Notwithstanding the existence of any Dispute or
the pendency of any procedures pursuant to this Appendix B, the Parties
agree and undertake that all payments not in dispute shall continue to be
made and all obligations not in dispute shall continue to be performed.
B-3
Appendix 1
(a) First priority shall be given to maximizing the consistency of the
resolution of the Dispute with the satisfaction of all express obligations
of the Parties and their Affiliates as set forth in the Agreement.
(b) Second priority shall be given to resolution of the Dispute in a manner
which best achieves the objectives of the business activities and
arrangements under the Agreement and permits the Parties to realize the
benefits intended to be afforded thereby.
(c) Third priority shall be given to such other matters, if any, as the Parties
or the Arbitrator determine to be appropriate under the circumstances.
1