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LYONDELL CHEMICAL COMPANY
GUARANTEE AGREEMENT
LYONDELL TRUST __
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Dated as of __________, ____
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TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
Section 1.01. Definitions............................................. 1
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application........................ 5
Section 2.02. Lists of Holders of Preferred Securities................ 5
Section 2.03. Reports by the Guarantee Trustee........................ 6
Section 2.04. Periodic Reports to the Guarantee Trustee............... 6
Section 2.05. Evidence of Compliance with Conditions Precedent........ 6
Section 2.06. Events of Default; Waiver............................... 6
Section 2.07. Disclosure of Information............................... 6
Section 2.08. Conflicting Interest.................................... 7
ARTICLE 3
Powers, Duties and Rights of The Guarantee Trustee
Section 3.01. Powers and Duties of the Guarantee Trustee.............. 7
Section 3.02. Certain Rights and Duties of the Guarantee Trustee...... 8
Section 3.03. Not Responsible for Recitals or Issuance of Guarantee... 10
ARTICLE 4
Guarantee Trustee
Section 4.01. Qualifications.......................................... 10
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee................................................. 11
ARTICLE 5
Guarantee
Section 5.01. Guarantee............................................... 12
Section 5.02. Waiver of Notice........................................ 12
Section 5.03. Obligations Not Affected................................ 12
Section 5.04. Enforcement of Guarantee................................ 13
Section 5.05. Guarantee of Payment.................................... 14
Section 5.06. Subrogation............................................. 14
Section 5.07. Independent Obligations................................. 14
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of __________, ____, is executed and
delivered by LYONDELL CHEMICAL COMPANY, a Delaware corporation (the
"Guarantor"), and The First National Bank of Chicago, a national banking
association, as the initial Guarantee Trustee (as defined herein) for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of Lyondell Trust __, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________, ____ among the trustees of the
Issuer named therein, LYONDELL CHEMICAL COMPANY, as Sponsor, and the Holders
from time to time of preferred undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to _______________ aggregate liquidation
amount of its $_____ Convertible Preferred Trust Securities, Series __ (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in Exhibit B to the
Declaration, of which $_____________ liquidation amount of Preferred Securities
is being issued as of the date hereof. Up to the remaining $______________
liquidation amount of Preferred Securities may be issued by the Issuer if and to
the extent that the over-allotment option granted by the Guarantor and the
Issuer pursuant to the Underwriting Agreement (as defined in the Declaration) is
exercised by the Underwriters named in the Underwriting Agreement; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires to irrevocably and unconditionally agree, to the extent set
forth herein, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
NOW, THEREFORE, in consideration of the purchase by the initial purchasers
thereof of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.
ARTICLE 1
Definitions
Section 1.01. Definitions. (a) Capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Debentures" means the series of Subordinated Debentures issued by the
Guarantor under the Indenture to the Property Trustee and entitled the "_____%
Subordinated Debentures due ____."
"Distributions" means the periodic distributions and other payments payable
to Holders in accordance with the terms of the Preferred Securities set forth in
Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
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except with respect to a default in payment of any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
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"Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions and the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the Property
Trustee of interest or principal on the Debentures and (ii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to Holders in exchange for
Preferred Securities or the redemption of all the Preferred Securities upon the
maturity or redemption of the Debentures as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer as required by applicable law (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, a national
banking association, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee Agreement,
and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
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whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of ______ __, ____
between the Guarantor and The First National Bank of Chicago, as trustee, as
supplemented by the ________ Supplemental Indenture thereto dated as of
___________, ____ (the "Supplemental Indenture"), pursuant to which the
Debentures are to be issued to the Property Trustee.
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class, who are the record
owners of Preferred Securities whose liquidation amount (including the stated
amount that
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would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board, Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of such
Person, and delivered to the Guarantee Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 2.05 shall be the principal
executive, financial or accounting officer of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under the
Declaration.
"Redemption Price" means the amount payable on redemption of the Preferred
Securities in accordance with the terms of the Preferred Securities.
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"Responsible Officer" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Guarantee Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by (SS) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(c) the application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.
Section 2.02. Lists of Holders of Preferred Securities. (a) The Guarantor
shall provide the Guarantee Trustee (unless the Guarantee Trustee is otherwise
the registrar of the Preferred Securities) with a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, (i) within one Business Day (as
defined in the Declaration) after May 15 and November 15 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the
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Guarantee Trustee; provided, that the Guarantor shall not be obligated to
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provide such List of Holders at any time that the Guarantor certifies in writing
to the Guarantee Trustee that the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the Guarantor. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) the Guarantee Trustee shall comply with its obligations under (SS)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Guarantee Trustee. Within 60 days after May 15
of each year, commencing May 15, ____, the Guarantee Trustee shall provide to
the Holders such reports as are required by (S) 313 of the Trust Indenture Act,
if any, in the form, in the manner and at the times provided by (S) 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the other
requirements of (S) 313 of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Commission and the Holders, as
applicable, such documents, reports and information as required by (S)
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by (S) 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by (S) 314(a)(4) and (c) of the Trust Indenture Act (provided that any
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certificate to be provided pursuant to (S) 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each fiscal year of the Issuer).
Section 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in (S) 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to (S) 314(c) may be given in the form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver. (a) The Holders of a Majority in
liquidation amount of the Preferred Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default, or impair any right consequent thereon.
(b) The right of any Holder to receive payment of the Guarantee Payments
in accordance with this Guarantee Agreement, or to institute suit for the
enforcement of any such payment, shall not be impaired without the consent of
each such Holder.
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Section 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders in accordance with (S) 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law, or any law
hereafter enacted which does not specifically refer to (S) 312 of the Trust
Indenture Act, nor shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under (S) 312(b) of the Trust
Indenture Act.
Section 2.08. Conflicting Interest. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
Powers, Duties and Rights of The Guarantee Trustee
Section 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04(iv). The right, title and interest of the
Guarantee Trustee to this Guarantee Agreement shall vest automatically in each
Person who may hereafter be appointed as Guarantee Trustee in accordance with
Article 4. Such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee in respect of the Guarantee Payments will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of, or for the
benefit of, the Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default known to the Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders, as their names and addresses appear upon
the register, notice of all such Events of Default, unless such defaults shall
have been cured before the giving of such notice; provided, that, the Guarantee
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Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible
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Officers, of the Guarantee Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders. The Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default except any Event of
Default as to which the Guarantee Trustee shall have received written notice or
a Responsible Officer charged with the administration of this Guarantee
Agreement shall have obtained written notice of such Event of Default.
(e) The Guarantee Trustee shall continue to serve as a trustee until a
Successor Guarantee Trustee has been appointed and accepted that appointment in
accordance with Article 4.
Section 3.02. Certain Rights and Duties of the Guarantee Trustee. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or the Trust Indenture Act
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are specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Guarantee Agreement or the Trust Indenture Act, as the case may be;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount of
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officers' Certificate, which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which may
be counsel to the Guarantor or any of its Affiliates and may include any of
its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
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shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have offered
to the Guarantee Trustee reasonable security and indemnity against the
costs, expenses (including its attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; provided that nothing contained in this clause (iv) shall
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relieve the Guarantee Trustee of the obligation, upon the occurrence of an
Event of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Guarantee Agreement, and to use
the same degree of care and skill in this exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders and the signature of the Guarantee Trustee
or its agents alone shall be sufficient and effective to perform any such
action; and no third party shall be required to inquire as to the authority
of the Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's taking
such action.
Section 3.03. Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee Agreement shall be taken as the statements
of the Guarantor and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.
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ARTICLE 4
Guarantee Trustee
Section 4.01. Qualifications. There shall at all times be a Guarantee
Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a national banking association or corporation organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this clause (ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the Guarantee Trustee has or shall acquire any "conflicting interest" within
the meaning of (S) 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of (S) 310(b) of
the Trust Indenture Act.
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause by the Guarantor upon 60 days' prior written
notice.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until
his successor shall have been appointed or until its removal or resignation.
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(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that no such resignation of the Guarantee
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Trustee shall be effective until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
Guarantee
Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
Section 5.02. Waiver of Notice. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
extend the interest payment period on the Debentures and the Guarantor shall not
be obligated hereunder to make any Guarantee Payment during any Extended
Interest Payment Period (as defined in the Supplemental Indenture) with respect
to the Distributions on the Preferred Securities.
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Section 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for
payment of Distributions that result from any Extended Interest Payment
Period), Redemption Price, Liquidation Distribution (as defined in the
Declaration) or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions
that result from any Extended Interest Payment Period);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional
under any and all circumstances.
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There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.04. Enforcement of Guarantee. The Guarantor and the Guarantee
Trustee expressly acknowledge that (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or other power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce this Guarantee
Agreement as provided in clauses (ii) and (iii) above, any Holder may institute
a legal proceeding directly against the Guarantor to enforce its rights under
this Guarantee Agreement, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may
directly institute a proceeding against the Guarantor for enforcement of this
Guarantee Agreement for such payment without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not merely of collection. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon the
distribution of the Debentures to the Holders as provided in the Declaration.
Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
-------- -------
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
Section 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
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terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
Limitation of Transactions; [Subordination] [Pari Passu]
Section 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock (other than (a)
dividends or distributions in shares of, or options, warrants, rights to
subscribe for or purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
as a result of a reclassification of the Guarantor's capital stock or the
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (d) the
payment of accrued dividends and the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or (e) purchases of the Guarantor's common stock related to the issuance of the
Guarantor's common stock or rights under any of the Guarantor's benefit plans
for its directors, officers or employees, any of the Guarantor's dividend
reinvestment plans or stock purchase plans, or any of the benefit plans of any
of the Guarantor's Affiliates, for such Affiliate's directors, officers or
employees) or make any guarantee payment with respect thereto, if at such time
(i) the Guarantor shall be in default with respect to its Guarantee Payments or
other payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its election of an Extended Interest Payment Period and such period, or any
extension thereof, is continuing. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section 9.01 of the Declaration; provided that any
--------
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's ownership of the Common Securities and (ii) will use reasonable
efforts to cause the Issuer to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Debentures as provided in the Declaration.
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Section 6.02. [Subordination] [Pari Passu]. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank [(i)
subordinate and junior] [pari passu] in right of payment to all other
liabilities of the Guarantor, including the Debentures, except those made [pari
passu or] subordinate by their terms[, and (ii) senior to all capital stock
(other than the most senior preferred stock issued, from time to time, if any,
by the Guarantor, which preferred stock will rank pari passu with this Guarantee
Agreement) now or hereafter issued by the Guarantor and to any guarantee now or
hereafter entered into by the Guarantor in respect of any of its capital stock
(other than the most senior preferred stock issued, from time to time, if any,
by the Guarantor)]. The Guarantor's obligations under this Guarantee Agreement
will rank pari passu with respect to obligations under other guarantee
agreements which it may enter into from time to time to the extent that (i) such
agreements shall be entered into in substantially the form hereof and provide
for comparable guarantees by the Guarantor of payment on preferred securities
issued by other trusts, partnerships or other entities affiliated with the
Guarantor that are financing vehicles of the Guarantor and (ii) the debentures
or other evidences of indebtedness of the Company relating to such preferred
securities are senior, unsecured indebtedness of the Company.
ARTICLE 7
Termination
Section 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect (i) upon full payment of the Redemption Price of
all Preferred Securities, (ii) upon the distribution of Debentures to Holders
and holders of Common Securities in exchange for all of the Preferred Securities
and Common Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or under this
Guarantee Agreement.
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ARTICLE 8
Limitation of Liability; Indemnification
Section 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Holder for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
Section 8.02. Indemnification. To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
Section 8.03. Survive Termination. The provisions of Sections 8.01 and
8.02 shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
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ARTICLE 9
Miscellaneous
Section 9.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture, the Guarantor shall not assign its obligations
hereunder.
Section 9.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of Holders in any material respect (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Guarantor and the Holders of not less
than a Majority in liquidation amount of the Preferred Securities. The
provisions of Section 12.02 of the Declaration concerning meetings of Holders
shall apply to the giving of such approval.
Section 9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Lyondell Chemical Company
1221 McKinney Street
Suite 1600
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713) 309-4718
(b) if given to the Guarantee Trustee, to the address set forth below or
such other address as the Guarantee Trustee may give notice of to the Holders:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
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(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 9.04. Genders. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
Section 9.05. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and subject to Section 3.01(a) is not separately transferable
from the Preferred Securities.
Section 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
Section 9.07. Counterparts. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
Section 9.08. Exercise of Overallotment Option. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of the overallotment
option referred to in the first WHEREAS clause, the Guarantor agrees to give
prompt notice thereof to the Guarantee Trustee but the failure to give such
notice shall not relieve the Guarantor of any of its obligations hereunder.
Section 9.09. Limited Liability. The Holders, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the
Guarantor arising out of this Guarantee Agreement, and the parties hereby agree
that the Holders, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to the stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
LYONDELL CHEMICAL
COMPANY
By:
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
As Guarantee Trustee
By:
--------------------------
Name:
Title:
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STATE OF ________ )
)
COUNTY OF ________ )
BEFORE ME, the undersigned authority, on this ____ day of ____________,
____, personally appeared _______________ of LYONDELL CHEMICAL COMPANY, known to
me (or proved to me by introduction upon the oath of a person known to me) to be
the person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such company for
the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, ____.
[SEAL]
______________________________________
NOTARY PUBLIC, STATE OF ______________
Print Name:___________________________
Commission Expires:___________________
21
STATE OF ________ )
)
COUNTY OF ________ )
BEFORE ME, the undersigned authority, on this ____ day of ____________,
____, personally appeared _______________ of THE FIRST NATIONAL BANK OF CHICAGO,
known to me (or proved to me by introduction upon the oath of a person known to
me) to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act of
such company for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, ____.
[SEAL]
____________________________________
NOTARY PUBLIC, STATE OF ____________
Print Name:_________________________
Commission Expires:_________________
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