EXHIBIT 4.5.1
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
LYONDELL TRUST I
_______________________________________
DATED AS OF ___________, 1999
_______________________________________
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TABLE OF CONTENTS*
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ARTICLE 1
Definitions
Section 1.01. Definitions......................................... 2
Affiliate........................................... 2
Book Entry Interest................................. 2
Business Day........................................ 3
Business Trust Act.................................. 3
Certificate......................................... 3
Certificate of Trust................................ 3
Clearing Agency..................................... 3
Clearing Agency Participant......................... 3
Closing Date........................................ 3
Code................................................ 3
Commission.......................................... 3
Common Securities................................... 3
Common Security Certificate......................... 3
Common Stock........................................ 4
Conversion Agent.................................... 4
Covered Person...................................... 4
Creditor............................................ 4
Debenture Trustee................................... 4
Debentures.......................................... 4
Definitive Preferred Security Certificates.......... 4
Delaware Trustee.................................... 4
Depositary Agreement................................ 4
Distribution........................................ 4
DTC................................................. 4
Event of Default.................................... 4
Exchange............................................ 4
Exchange Act........................................ 4
Fiscal Year......................................... 5
Global Certificate.................................. 5
Holder.............................................. 5
Holder Direct Action................................ 5
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*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
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Indemnified Person.................................. 5
Indenture........................................... 5
Indenture Event of Default.......................... 5
Investment Company.................................. 5
Investment Company Act.............................. 5
Legal Action........................................ 5
Liquidation Distribution............................ 5
List of Holders..................................... 5
Lyondell............................................ 5
Sponsor............................................. 5
Majority in liquidation amount of the Securities.... 5
NASD................................................ 6
Nasdaq.............................................. 6
1933 Act Registration Statement..................... 6
1934 Act Registration Statement..................... 6
Officers' Certificate............................... 6
Opinion of Counsel.................................. 7
Option Closing Date................................. 7
Original Declaration................................ 7
Paying Agent........................................ 7
Payment Amount...................................... 7
Person.............................................. 7
Preferred Guarantee................................. 7
Preferred Securities................................ 7
Preferred Security Beneficial Owner................. 7
Preferred Security Certificate...................... 7
Property Trustee.................................... 7
Property Account.................................... 8
Quorum.............................................. 8
Regular Trustee..................................... 8
Related Party....................................... 8
Resignation Request................................. 8
Responsible Officer................................. 8
Rule 3a-7........................................... 8
Securities.......................................... 8
Securities Act...................................... 8
Special Event....................................... 8
Sponsor............................................. 8
Lyondell............................................ 8
Successor Delaware Trustee.......................... 8
Successor Entity.................................... 8
Successor Property Trustee.......................... 9
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Successor Securities................................... 9
Super Majority......................................... 9
Supplemental Indenture................................. 9
10% in liquidation amount of the Securities............ 9
Treasury Regulations................................... 9
Trust.................................................. 9
Trustee................................................ 9
Trustees............................................... 9
Trust Indenture Act.................................... 10
Underwriting Agreement................................. 10
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application....................... 10
Section 2.02. Lists of Holders of Preferred Securities............... 10
Section 2.03. Reports by the Property Trustee........................ 11
Section 2.04. Periodic Reports to the Property Trustee............... 11
Section 2.05. Evidence of Compliance with Conditions Precedent....... 11
Section 2.06. Events of Default; Waiver.............................. 11
Section 2.07. Disclosure of Information.............................. 13
ARTICLE 3
Organization
Section 3.01. Name................................................... 14
Section 3.02. Office................................................. 14
Section 3.03. Issuance of the Securities............................. 14
Section 3.04. Purchase of Debentures................................. 15
Section 3.05. Purpose................................................ 15
Section 3.06. Authority.............................................. 16
Section 3.07. Title to Property of the Trust......................... 16
Section 3.08. Powers and Duties of the Regular Trustees.............. 16
Section 3.09. Prohibition of Actions by the Trust and the Trustees... 19
Section 3.10. Powers and Duties of the Property Trustee.............. 20
Section 3.11. Delaware Trustee....................................... 24
Section 3.12. Certain Rights and Duties of the Property Trustee...... 24
Section 3.13. Registration Statement and Related Matters............. 26
Section 3.14. Filing of Amendments to Certificate of Trust........... 28
Section 3.15. Execution of Documents by the Regular Trustees......... 28
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities............................................. 28
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Section 3.17. Duration of the Trust................................... 28
Section 3.18. Mergers................................................. 28
Section 3.19. Property Trustee May File Proofs of Claim............... 30
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor............ 31
Section 4.02. Expenses................................................ 32
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications...................... 33
Section 5.02. Appointment, Removal and Resignation of the Trustees.... 35
Section 5.03. Vacancies among the Trustees............................ 37
Section 5.04. Effect of Vacancies..................................... 37
Section 5.05. Meetings................................................ 37
Section 5.06. Delegation of Power..................................... 38
Section 5.07. Merger, Conversion, Consolidation or Succession to
Business................................................ 38
ARTICLE 6
Distributions
Section 6.01. Distributions........................................... 38
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities............. 39
Section 7.02. Conversion Agent........................................ 40
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust................................ 41
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ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities............................... 42
Section 9.02. Transfer of Certificates............................. 42
Section 9.03. Deemed Security Holders.............................. 42
Section 9.04. Book Entry Interests................................. 43
Section 9.05. Notices to Holders of Certificates................... 44
Section 9.06. Appointment of Successor Clearing Agency............. 44
Section 9.07. Definitive Preferred Securities Certificates......... 44
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.... 45
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation......................................... 45
Section 10.02. Indemnification..................................... 46
Section 10.03. Outside Business.................................... 46
ARTICLE 11
Accounting
Section 11.01. Fiscal Year......................................... 47
Section 11.02. Certain Accounting Matters.......................... 47
Section 11.03. Banking............................................. 48
Section 11.04. Withholding......................................... 48
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.......................................... 48
Section 12.02. Meetings of the Holders of Securities; Action by
Written Consent..................................... 50
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property
Trustee............................................. 51
Section 13.02. Representations and Warranties of the Delaware
Trustee............................................. 52
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ARTICLE 14
Miscellaneous
Section 14.01. Notices........................................ 53
Section 14.02. Undertaking for Costs.......................... 54
Section 14.03. Governing Law.................................. 55
Section 14.04. Headings....................................... 55
Section 14.05. Partial Enforceability......................... 55
Section 14.06. Counterparts................................... 55
Section 14.07. Intention of the Parties....................... 55
Section 14.08. Successors and Assigns......................... 56
Section 14.09. No Recourse.................................... 56
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LYONDELL TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of __________, ____ by Kerry A. Galvin, ___________ and
___________, as Regular Trustees (the "Regular Trustees"), The First National
Bank of Chicago, as Property Trustee (the "Property Trustee") and First Chicago
Delaware Inc., as Delaware Trustee (the "Delaware Trustee") (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Lyondell
Chemical Company, a Delaware corporation, as trust sponsor ("Lyondell" or the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration
of Trust dated as of July 29, 1998 (the "Original Declaration") in order to
establish Lyondell Trust I, a statutory business trust (the "Trust"), under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware on
July 29, 1998; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities (as
hereinafter defined) representing preferred undivided beneficial interests in
the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Lyondell issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Lyondell in exchange for cash
and investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all Debentures referred to in clauses (i) and (ii) of the
previous paragraph purchased by the Trust will be held in trust for the benefit
of the Holders (as hereinafter defined) from time to time, of the Certificates
(as hereinafter defined) representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE 1
Definitions
Section 1.01. Definitions.
(a) Capitalized terms used in this Declaration 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 Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration 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.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
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transfers of which shall be maintained and made through book entries by such
Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and State of
New York, Chicago, Illinois or Houston, Texas are authorized or required by law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S) 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
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"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
["Common Stock" means the common stock, par value $1.00 per share, of
Lyondell or any other class of stock, other securities, cash or other assets
into which the Debentures are then convertible.]
["Conversion Agent" has the meaning specified in Section 7.02.]
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Lyondell or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of Subordinated Debentures issued by Lyondell
under the Indenture to the Property Trustee and entitled the "____% Subordinated
Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
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"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Conversion Agent, any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"Indenture" means the Subordinated Indenture dated as of _______ __, ____
between Lyondell and the Debenture Trustee as supplemented by the _______
Supplemental Indenture thereto dated as of ____________, ____, pursuant to which
the Debentures are to be issued.
"Indenture Event of Default" means that an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
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"Lyondell" or "Sponsor" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that 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 Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in
Section 3.13.
"1934 Act Registration Statement" has the meaning specified in
Section 3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Sponsor, and delivered to the
appropriate 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 Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
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(c) a statement that each such 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
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, which may be an employee of
the Sponsor but not an employee of the Trust or the Property Trustee, and who
shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel
pertaining to federal income tax matters may rely on published rulings of the
Internal Revenue Service.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of __________,
____ of Lyondell in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Lyondell or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Lyondell.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property 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 Property 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.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities as
set forth in paragraph 4 of Exhibits B and C hereto.
"Sponsor" or " Lyondell" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
8
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.02(b).
"Successor Securities" has the meaning specified in Section 3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental Indenture dated as of
________, ____ between Lyondell and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or " Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ____ among the Trust, the Sponsor and _______ and _________, as
representatives of the several underwriters named therein.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or
the rules and regulations of the Commission, shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee unless the Property Trustee is registrar for
the Securities, (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time that the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust 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 Property Trustee. The
Property Trustee shall preserve, in as current a form as
10
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under (S)(S)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Securities 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 Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee, the Commission and the Holders of the
Securities, 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
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).
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration 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 Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided above in Section 2.06(a) or below in this
Section 2.06(b), the Event of Default under this Declaration shall also not
be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided above in Section
2.06(a) or below in this Section 2.06(b), the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Common
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Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to
have waived any such Event of Default and all Events of Defaults with respect to
the Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
Holders of Preferred Securities as provided in the Declaration, the Holders of
Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon waiver, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the Holders
of the Securities 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
Property
13
Trustee be held accountable by reason of mailing any material pursuant to a
request made under (S) 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.01. Name.
The Trust continued by this Declaration is named "Lyondell Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.02. Office.
The address of the principal office of the Trust is c/o Lyondell Chemical
Company, 1221 McKinney Street, Suite 1600, Houston, Texas 77010. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
Section 3.03. Issuance of the Securities.
On __________, ____ the Sponsor, on behalf of the Trust and pursuant to the
Original Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver to (i) the underwriters named in the Underwriting Agreement, a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.04, in an aggregate amount of ___________
Preferred Securities having an aggregate liquidation amount of $__________,
against receipt of the aggregate purchase price of such Preferred Securities of
$___________, and (ii) the Sponsor, Common Securities Certificates, registered
in the name of the Sponsor, in an aggregate amount of ________ Common Securities
having an aggregate liquidation amount of $____________, against receipt of the
aggregate purchase price of such Common Securities of $___________. In the
event and to the extent the overallotment option granted by the Trust pursuant
to the Underwriting Agreement is exercised by such underwriters, on the Option
Closing Date the Regular Trustees, on behalf of the Trust, shall execute and
deliver to such underwriters a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of up to ___________ Preferred
14
Securities having an aggregate liquidation amount of up to $___________, against
receipt of the aggregate purchase price of such Preferred Securities of up to
$____________.
Section 3.04. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and delivery
of this Declaration, the Regular Trustees, on behalf of the Trust, shall
purchase from the Sponsor with the proceeds received by the Trust from the sale
of the Securities on such date pursuant to Section 3.03, at a purchase price of
100% of the principal amount thereof, Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount equal to $___________,
and, in satisfaction of the purchase price for such Debentures, the Regular
Trustee, on behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of $___________. In the event the overallotment option granted
by the Trust with respect to the Preferred Securities pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on the
Option Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.03, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $__________, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased.
Section 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue and
sell Preferred Securities for cash and use the proceeds of such sales to acquire
from Lyondell Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii) to
issue and sell Common Securities to Lyondell for cash and use the proceeds of
such sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (b) except as otherwise limited
herein, to engage in only those other activities
15
necessary, convenient or incidental thereto, including such other activities
specifically authorized in this Declaration. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge any
of its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
Section 3.06. Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and the
Property Account or unless otherwise provided in this Declaration, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have
undivided beneficial interests in the assets of the Trust.
Section 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty to
cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date and (y) any subsequent issuance of
Preferred Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting Agreement;
16
(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of (S) 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by (S)
314(a)(4)
17
of the Trust Indenture Act, which certificate may be executed by any Regular
Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing the
Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes of the Trust and the
activities of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures will be
treated as indebtedness of the Sponsor for United States federal income tax
purposes;
(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust,
and to comply with any requirements imposed by any taxing authority on holders
of instruments treated as indebtedness for United States federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
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(S) 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05, and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers or any of the authority of the Property Trustee set forth in Section
3.10.
The Regular Trustees shall take all actions on behalf of the Trust that are
not specifically required by this Declaration to be taken by any other Trustee.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.08
shall be reimbursed by the Sponsor.
Section 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as otherwise
expressly provided herein;
19
(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee or exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures, without, in each case, obtaining
the prior approval of the Holders of a Majority in liquidation amount of all
outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, unless in the case of
this clause (j) the Property Trustee shall have received an Opinion of Counsel
experienced in such matters to the effect that such amendment, modification or
termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor
trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
20
Section 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with
Section 6.01. Funds in the Property Account shall be held uninvested, and
without liability for interest thereon, until disbursed in accordance with
this Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the occurrence of
a Special Event or upon the election of the Holder of Common Securities to
distribute the Debentures to Holders of Securities and dissolve the Trust;
and
21
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject to
Section 3.10(e), shall for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures under the Indenture, subject
to the rights of the Holders of the Preferred Securities pursuant to the
terms of this Declaration, the Business Trust Act and the Trust Indenture
Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Company will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
22
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to the Property Trustee,
transmit by mail, first class postage prepaid, to the holders of the Securities,
as their names and addresses appear upon the register, notice of such defaults
with respect to the Securities known to the Property Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 3.10(g) being hereby defined to be
an Indenture Event of Default, not including any periods of grace provided for
in the Indenture and irrespective of the giving of any notice provided therein);
provided, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures, the Property 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 Officers, of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
The Property Trustee shall not be deemed to have knowledge of any default,
except (i) a default in the payment of principal, premium or interest on the
Debentures or (ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged with the administration
of this Declaration shall have obtained written notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds thereof
distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with (S) 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee,
after consultation with the Regular Trustees, at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(q).
23
(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from Lyondell of its election to
defer payments of interest on the Debentures by extending the interest payment
period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
Section 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of (S) 3807(a) of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
Section 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property 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
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, 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 Declaration shall be construed to relieve the
Property 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:
24
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration, and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property 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 Property Trustee and
conforming to the requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property 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 not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee hereunder or
under the Indenture, or exercising any trust or power conferred upon the
Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property 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 Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
25
established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, request and rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor 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) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property 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 Property 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 Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have offered to the
Property Trustee reasonable security and indemnity against the costs,
expenses (including 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 relieve the
Property 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 Declaration, 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 Property Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Property 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 Property Trustee to so act, or as to its
compliance with any of the terms and provisions of this Declaration, both
of which
26
shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action.
(d) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
Section 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Lyondell, as the sponsor of
the Trust, was authorized (i) to file with the Commission and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (File
No. 333-60429) (the "1933 Act Registration Statement") including any pre-
effective or post-effective amendments thereto, relating to the registration
under the Securities Act of the Preferred Securities and (b) if Lyondell shall
deem it desirable, a Registration Statement on Form 8-A or other appropriate
form (the "1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act; (ii) if Lyondell shall deem it
desirable, to prepare and file with the New York Stock Exchange or one or more
national securities exchange(s) (each, an "Exchange") or the National
Association of Securities Dealers, Inc. (the "NASD") and execute on behalf of
the Trust a listing application or applications and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and all other papers
and documents as Lyondell, on behalf of the Trust, may deem necessary or
desirable to register the Preferred Securities under the securities or "Blue
Sky" laws of such jurisdictions as Lyondell on behalf of the Trust, may deem
necessary or desirable; and (iv) to negotiate the terms and execute on behalf of
the Trust the Underwriting Agreement. In the event that any filing referred to
in clauses (i)-(iii) above is required by the rules and regulations of the
Commission, any Exchange, Nasdaq, the NASD or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, and Lyondell are hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee and
the Delaware Trustee, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws. In connection
with all of the foregoing, Lyondell and each Trustee, solely in its capacity as
Trustee of the Trust, have constituted and appointed, and hereby confirm the
appointment of, Dan F. Smith, Jeffrey R. Pendergraft and Edward W. Rich and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for
Lyondell or such Trustee or in Lyondell's or such Trustee's name, place and
27
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as Lyondell or such Trustee might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State
of Delaware on July 29, 1998 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments, if any, to
the Certificate of Trust as the Trustees shall deem necessary or desirable.
Section 3.15. Execution of Documents by the Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall have existence until ___________, ____.
28
Section 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, except as described
in Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or
the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses the same powers and duties as the Property Trustee as the holder
of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities will
be listed upon notification of issuance, on any national securities
exchange or with another organization in which the Preferred Securities are
then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior to
such transaction, such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
29
(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received an
Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Trust (or
the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an
30
entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
Section 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
31
Securities or the rights of any Holder thereof to authorize the Property Trustee
to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common Securities
issued by the Trust at the same time as the Preferred Securities to be issued on
such date are issued, such purchase to be in an amount equal to 3% of the total
capital of the Trust (including for this purpose the maximum amount of Preferred
Securities, if any, which may be issued on the Option Closing Date pursuant to
the exercise of the overallotment option set forth in the Underwriting
Agreement).
Section 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
32
Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this
Section 4.02.
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace, the
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of Lyondell;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and otherwise is permitted to
act as a Trustee hereunder under the laws of the State of Delaware, except
that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Property
33
Trustee shall also be the Delaware Trustee and Section 3.11 shall have
no application; and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
[to come]
c/o LYONDELL CHEMICAL COMPANY
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(c) There shall at all times be one Trustee which shall act as the Property
Trustee. In order to act as the Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association 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,
national banking association 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 or national banking association 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 Section 5.01(c)(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; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
34
If at any time the Property Trustee shall cease to satisfy the requirements
of clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of (S) 310(b)
of the Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in (S) 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions of
(S) 310(b) of the Trust Indenture Act. The Preferred Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in (S) 310(b) of the Trust
Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The First
National Bank of Chicago, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
Section 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.
(b) (i) The Trustee that acts as the Property Trustee shall not be removed
in accordance with Section 5.02(a) until a Successor Property Trustee possessing
the qualifications to act as the Property Trustee under Section 5.01(c) (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
35
and delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing the
qualifications to act as the Delaware Trustee under Section 5.01(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications to
act as the Property Trustee under Section 5.01(c) has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7, until the assets of the Trust
have been completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery to the Sponsor and the Trust of a Resignation
36
Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee, as the case may be. Such court may thereupon
after prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the case
may be.
Section 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees
is not reduced pursuant to Section 5.01 or if the number of Trustees is
increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action
of the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
37
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any registration statement or amendment thereto or
other document or schedule filed with the Commission or making any other
governmental filing (including, without limitation, the filings referred to in
Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.07. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, shall be a party,
or any Person succeeding to all or substantially all of the corporate trust
business of the Property Trustee or the Delaware Trustee or the Regular Trustee,
as the case may be, shall be the successor of the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, hereunder,
provided that such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 6
Distributions
Section 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant
38
Holder's Securities as set forth in Exhibits B and C hereto ("Distributions").
If and to the extent that Lyondell makes a payment of interest (including
Compounded Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to promptly make a Distribution of
the Payment Amount to Holders in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto.
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue on behalf of the Trust Securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with Section 7.01(b) and for the consideration
specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee who shall have signed
any of the Certificates shall cease to be such Regular Trustee before the
Certificate so signed shall be delivered by the Trust, such Certificate
nevertheless may be delivered as though the person who signed such Certificate
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons as, at the actual date of the execution of
such Certificate, shall be the
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Regular Trustees, although at the date of the execution and delivery of this
Declaration any such person was not a Regular Trustee. Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which Securities may be
listed or traded, or with any rule or regulation of the Clearing Agency, or to
conform to usage. Pending the preparation of definitive Certificates, the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each temporary
Certificate shall be executed by the Regular Trustees (or, if there are more
than two Regular Trustees, by any two of the Regular Trustees) on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Lyondell the $10
constituting initial trust assets as set forth in the Original Declaration.
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[Section 7.02. Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities may be
presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Conversion
Agent shall be entitled to the rights and protections extended to the Property
Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion Agent for
the Preferred Securities.]
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders
of the Securities in accordance with the terms of the Securities; or
(ii) when all of the Debentures shall have been distributed to the Holders
of the Securities in exchange for all of the Securities in accordance with the
terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17[; or
(iv) upon the distribution of Common Stock to all Securities Holders upon
conversion of all outstanding Securities.]
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The
41
Trustees shall so file such a certificate as soon as practicable after the
occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws). To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void.
Section 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder
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upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
Section 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance (including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement), will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.07. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein in
Section 9.07 or in Rule 3a-7 (if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, shall have no obligation to the Preferred Security
Beneficial Owners;
43
(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants, provided, that
solely for the purposes of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in
this Declaration, so long as definitive Preferred Security Certificates
have not been issued (pursuant to Section 9.07 hereof), the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in
whole or in part.
Section 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to be
given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall, except
in Rule 3a-7 (if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7) with respect to the Property Trustee,
have no notice obligations to the Preferred Security Beneficial Owners.
Section 9.06. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
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Section 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such instructions.
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees) on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.08, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
45
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration 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 gross negligence (or, in the
case of the Property Trustee, 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 Trust and upon such information, opinions, reports or
statements presented to the Trust 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
Trust, 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 of Securities might properly be paid.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
Section 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor 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 on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, 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
46
reason of gross negligence (or, in the case of the Property Trustee, negligence)
or willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the termination of this
Declaration or the resignation or removal of any Trustee.
Section 10.03. Outside Business.
The Sponsor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
Accounting
Section 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees shall
keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
47
(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be prepared
and mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply with the
periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
such financial statements for such Fiscal Year shall be examined and reported on
by a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to each
Holder of Securities any annual United States federal income tax information
statement required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
Section 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
Section 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request, and
the Holders shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit
48
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed overwithholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount to be
withheld was not withheld from a Distribution, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment or modification to this Declaration shall be
made, and any such purported amendment shall be void and ineffective: (A) unless
the Regular Trustees shall have first received: (x) an Officers' Certificate
that such amendment is permitted by, and conforms to, the terms of this
Declaration; and (y) an Opinion of Counsel that such amendment is permitted by,
and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a grantor trust; (y)
reduce or otherwise adversely affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or (z) cause the Trust to be deemed to
be an Investment Company required to be registered under the Investment Company
Act; (ii) at such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(iii) Section 4.02, Section 9.01(c) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities; (iv) no amendment
which adversely affects the rights, powers and privileges of the Property
Trustee or the Delaware Trustee shall be made without the consent of the
Property Trustee or the Delaware Trustee, respectively; (v) Article 4 shall not
be amended without the consent of the Sponsor; and (vi) the rights of the
Holders of Common Securities under Article 5 to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
49
(b) Notwithstanding Section 12.02(a), this Declaration may be amended without
the consent of the Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration, (iii) add to the
covenants, restrictions or obligations of the Sponsor, (iv) conform to any
changes in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) or any change in
interpretation or application of Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or questions
arising under this Declaration which shall not be inconsistent with the other
provisions of this Declaration, (vi) modify, eliminate or add to any provisions
of this Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure that
the Trust will not be required to register as an Investment Company under the
Investment Company Act, and (vii) pursuant to Section 5.02, evidence the
acceptance of the appointment of a successor Trustee or fill a vacancy created
by an increase in the number of Regular Trustees, which amendment does not
adversely affect in any material respect the rights, preferences or privileges
of the Holders.
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which the Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
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(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of the Holders of Securities:
(i) Notice of any such meeting shall be given by mail to all the Holders of
Securities having a right to vote thereat not less than seven (7) days nor
more than sixty (60) days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange or automated
quotation system on which the Preferred Securities are then listed, traded or
quoted, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by Holders of Securities owning
not less than the minimum aggregate liquidation amount of Securities that
would be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the Holders
of Securities for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted by
the Regular Trustees or by such other Person that the Regular Trustees may
designate.
(iv) Unless otherwise provided in the Business Trust Act, this Declaration
or the rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted,
51
the Regular Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including notice of
the time, place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(iii) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or notice
to, any banking authority which supervises or regulates the Property
52
Trustee is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in Section
5.01(c).
Section 13.02. Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee represents and warrants
to the Trust and the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as the
Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware Trustee of
this Declaration have been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(iii) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Delaware
Trustee, if any, is required for the execution, delivery or performance by the
Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and is a Person that
satisfies for the Trust (S) 3807(a) of the Business Trust Act.
53
ARTICLE 14
MISCELLANEOUS
Section 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by
first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
Lyondell Trust I
c/o Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(b) if given to the Property Trustee, at the mailing address of the Property
Trustee set forth below (or such other address as the Property Trustee may give
notice of to the Holders of the Securities):
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
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention:
Telecopy:
(d) if given to the Holder of the Common Securities, at the mailing address of
the Sponsor set forth below (or such other address as the Holder of the Common
Securities may give notice of to the Trust):
54
Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices 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 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Declaration, or in any suit against the Property Trustee for
any action taken or omitted by it as Property Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 14.02 shall not apply to any suit instituted
by the Property Trustee, to any suit instituted by any Holder of Preferred
Securities, or group of Holders of Preferred Securities, holding more than 10%
in aggregate liquidation amount of the outstanding Preferred Securities, or to
any suit instituted by any Holder of Preferred Securities for the enforcement of
the payment of the principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed in such Debentures.
Section 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
55
Section 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature pages
and this Declaration may be executed by the affixing of the signature of the
Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be classified for
United States federal income tax purposes as an association taxable as a
corporation or partnership but that the Trust be treated as a grantor trust for
United States federal income tax purposes. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
Section 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.09. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions, or for any claim upon
the Securities or otherwise in respect thereof, shall be had against any Holder
of Securities or any Affiliate of a Holder of Securities, solely by reason of
such
56
Person's being a Holder of Securities or an Affiliate of a Holder of Securities,
it being understood that the Holder of Securities, solely by reason of being a
Holder of Securities, has limited liability (in accordance with the provisions
of the Business Trust Act) for the liabilities and obligations of the Trust.
Nothing contained in this Section 14.09 shall be construed to limit the exercise
or enforcement, in accordance with the terms of this Declaration, the Preferred
Guarantee and the Indenture, of the rights and remedies against the Trust or the
Sponsor.
57
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
LYONDELL CHEMICAL COMPANY,
as Sponsor
By:______________________________
Name:
Title:
_______________________________
Kerry A. Galvin,
as Regular Trustee
________________________________
[Name],
as Regular Trustee
________________________________
[Name],
as Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:_____________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:_____________________________
Name:
Title:
58
EXHIBIT A
CERTIFICATE OF TRUST
OF
LYONDELL TRUST I
THIS CERTIFICATE OF TRUST of Lyondell Trust I (the "Trust"), dated as of July
29, 1998, is being duly executed and filed by the undersigned, as trustees, with
the Secretary of State of the State of Delaware to form a business trust under
the Delaware Business Trust Act (12 Del. Code (S) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust at
the time of filing this Certificate of Trust, have executed this Certificate of
Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
_________________________________
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
________________________________
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
________________________________
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust I dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Preferred Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________) (including up to
_______________________________________________ Dollars ($___________) issuable
upon exercise of the overallotment option set forth in the Underwriting
Agreement), and each with a liquidation amount with respect to the assets of the
Trust of $[50][25] per Preferred Security, are hereby designated as "____%
Convertible Preferred Trust Securities, Series A". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or automated quotation system on
which the Preferred Securities are then listed, traded or quoted. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of Lyondell
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities and the Common Securities so issued and bearing
interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security will
be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $[50][25] per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
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used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
___________, _____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year, commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the
B-3
Preferred Securities remain in book-entry only form, the relevant record
dates shall be one business day prior to the relevant Distribution date, and
if the Preferred Securities are no longer in book-entry only form, the
relevant record dates will be the fifteenth (15th) day of the month prior to
the relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Preferred Securities that are not punctually paid on any
Distribution payment date as a result of Lyondell's having failed to make
the corresponding interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred Security is registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record
date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless Lyondell has elected to make
a full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the
Preferred Securities will be made as described in paragraph 9 hereof. If any
date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
[(e) In the event of an election by the Holder to convert its Preferred
Securities through the Conversion Agent into Common Stock pursuant to the
terms of the Preferred Securities as set forth in this Exhibit B to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Preferred Securities, or be
required to be made; provided, however, that if a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a Distribution and before the
B-4
opening of business on the corresponding Distribution date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution date will be paid in cash to the person in whose name the
Preferred Security is registered at the close of business on such record
date, and (other than a Preferred Security or a portion of a Preferred
Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to the creditors of the Trust, an amount equal to
the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination, and
after satisfaction of liabilities to the creditors of the Trust, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and the Common Securities and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid Distributions
on, such Preferred Securities and the Common Securities, shall be distributed
Pro Rata to the Holders of the Preferred Securities and the Common Securities in
exchange for such Securities.
If, upon any such dissolution, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation Distribution,
then the amounts payable directly by the Trust on the Preferred Securities and
the Common Securities shall be paid, subject to the next paragraph, on a Pro
Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred
B-5
and is continuing, the Preferred Securities shall have a priority over
the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding and may be canceled by the Regular Trustees, and
(ii) Certificates representing Preferred Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accumulated and unpaid Distributions
on, such Preferred Securities until such Certificates are presented to
Lyondell or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Lyondell, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less
B-6
than 30 nor more than 60 days' notice, at a redemption price of $[50][25]
per Preferred Security and Common Security plus an amount equal to
accumulated and unpaid Distributions thereon to the date of redemption,
payable in cash (the "Redemption Price"). The date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in paragraph 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the
B-7
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No
B-8
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered in
the name of and held of record by DTC (or successor Clearing Agency) or
any other nominee, the Preferred Securities will be redeemed from, and
the distribution of the proceeds of such redemption will be made to,
DTC (or successor Clearing Agency).
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that Lyondell has paid
the Property Trustee, in immediately available funds, a sufficient
amount of cash in connection with the related redemption or maturity of
the Debentures, the Property Trustee will deposit irrevocably with DTC
(or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give
DTC (or successor Clearing Agency) irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities and provided that
Lyondell has paid the Property Trustee, in immediately available funds,
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred Securities
by check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the redemption date, Distributions will cease to
accumulate on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be outstanding and all
rights of Holders of such Preferred Securities so called for redemption
will cease, except the right of the Holders of such Preferred
Securities to receive the
B-9
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Preferred Securities which
have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by Lyondell pursuant to the Preferred Guarantee,
Distributions on such Preferred Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), Lyondell or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
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[5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on ________, ____ or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into shares of Common Stock in the manner described herein
on and subject to the following terms and conditions:
(a) The Preferred Securities will be convertible at the office of the
Conversion Agent maintained for such purpose in the Borough of Manhattan,
The City of New York, into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to exchange
such Preferred Securities for a portion of the Debentures theretofore held
by the Trust on the basis of one Preferred Security per $[50][25] principal
amount of Debentures, and immediately convert such amount of Debentures into
fully paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50] [25] principal amount of Debentures (which
is equivalent to a conversion price of $___ per share of Common Stock,
subject to certain adjustments set forth in Sections __ and __ of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Preferred Securities on behalf of such
Holder (the "Conversion Request"), together, if the Preferred Securities are
in certificated form, with such Preferred Security Certificates. The
Conversion Request shall (i) set forth the number of Preferred Securities to
be converted and the name or names, if other than the Holder, in which the
shares of Common Stock should be issued and (ii) direct the Conversion Agent
(a) to exchange such Preferred Securities for a portion of the Debentures
held by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of such
Holder into Common Stock, subject to certain adjustments set forth in the
Supplemental Indenture (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Trust of the Holder's
election to exchange Preferred Securities for a portion of the Debentures
held by the Trust and the Trust shall, upon receipt of such notice, deliver
to the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a
B-11
Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash
to the person in whose name the Preferred Security is registered at the
close of business on such record date, and (other than a Preferred Security
or a portion of a Preferred Security called for redemption on a redemption
date occurring after such record date and on or prior to such Distribution
payment date) when so surrendered for conversion, the Preferred Security
must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date. Except as provided above, neither
the Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated
and unpaid Distributions accumulated on the Preferred Securities surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Preferred Securities shall be deemed to
constitute full payment for all accumulated and unpaid Distributions on the
Preferred Securities. Preferred Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Preferred Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share
to the Person or Persons entitled to receive the same, unless otherwise
directed by the Holder in the Notice of Conversion, and the Conversion Agent
shall distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance thereof
appoints The First National Bank of Chicago as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of
the Holders of Preferred Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Preferred Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Preferred Securities in accordance
with this Section and (ii) to convert all or a portion of the Debentures
into
B-12
Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a
new Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Preferred Securities
so converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver upon
conversion of Debentures, shares of Common Stock reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of the
Debentures to the converting Holder of Preferred Securities free and clear
of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of Common Stock (and all requirements to list
Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common Stock
to the Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder of Preferred Securities upon conversion
of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock
B-13
by the Trust upon conversion of the Preferred Securities. The Sponsor shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Preferred Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has
been paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Preferred
Securities or set forth in this Exhibit B to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.01 of the Declaration, then the Holders of outstanding
Securities will be entitled to vote on such amendment or proposal as a
single class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class of Securities will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
Majority in liquidation amount of such class of Securities and (B)
amendments to the Declaration shall be subject to such further requirements
as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with
B-14
respect to such amendment, modification or termination. The Property Trustee
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
In addition to obtaining the foregoing approvals of such Holders of the
Preferred Securities and Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that for United States federal income tax purposes the
Trust will not be classified as other than a grantor trust on account of such
action.
If an Event of Default has occurred and is continuing, then the Holders of a
Majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
under the
B-15
Debentures, a Holder of Preferred Securities, to the extent permitted by
applicable law, may, after a period of 30 days has elapsed since such Holder's
written request to the Property Trustee to enforce such rights, institute a
legal proceeding directly against the Sponsor to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person; provided further, that, if an
Event of Default has occurred and is continuing and such event is attributed to
the failure of the Sponsor to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Company will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the Holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Lyondell or by any Affiliate of
Lyondell shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
B-16
Except as provided in this paragraph 6, Holders of the Preferred Securities
will have no rights to increase or decrease the number of Trustees or to
appoint, remove or replace a Trustee, which voting rights are vested exclusively
in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee[, including the subordination provisions therein,] and
(ii) the Indenture and the Debentures, including the subordination provisions
of the Indenture.
B-17
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no
preemptive or similar rights to subscribe to any additional Preferred Securities
or Common Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Preferred Securities without charge on written request to the Trust at its
principal place of business.
B-18
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE
FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
LYONDELL TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities: ____________
___________
Aggregate Liquidation Amount: $____________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
Lyondell Trust I
____% Convertible Preferred Trust Securities, Series A
(liquidation amount $[50][25] per Preferred Security)
B-19
Lyondell Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
and designated the ____% Convertible Preferred Trust Securities, Series A
(liquidation amount $[50][25] per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of ___________, ____, as the same may be amended
from time to time (the "Declaration") including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Lyondell
Chemical Company, a Delaware corporation ("Lyondell"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement of Lyondell dated as of __________, ____
(the "Guarantee") to the extent provided therein. The Trust will furnish a copy
of the Declaration, the Guarantee and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have (i) agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Supplemental Indenture) as and to the extent provided in the
Indenture, and (ii) agreed to the terms of the Guarantee, including that the
Guarantee [is subordinate and junior in right of payment to] [is pari passu to]
all other liabilities of Lyondell, including the Debentures, except those made
[pari passu or] subordinate by their terms, and senior to all capital stock
[(other than the most senior preferred stock issued, from time to time, if any,
by Lyondell, which preferred stock will rank pari passu with the Guarantee)] now
or hereafter issued by Lyondell and to any guarantee now or hereafter entered
into by Lyondell in respect of any of its capital stock [(other than the most
senior preferred stock issued, from time to time, if any, by Lyondell)].
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
B-20
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ____ day of __________, ____.
LYONDELL TRUST I
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
B-21
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from _________,
____, and will be payable quarterly in arrears, on ______, ______, ______ and
______ of each year, commencing on ________, ____, but only if and to the extent
that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Lyondell may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, Lyondell may commence a new Extension Period, subject to the above
requirements. Payments of accumulated Distributions will be payable to Holders
of Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
B-22
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration.]
B-23
[CONVERSION REQUEST
To: ________________, as Property Trustee of Lyondell Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of ______, ____ (as amended from time to
time, the "Declaration"), by _________, ________ and __________ as Regular
Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The First
National Bank of Chicago, as the Property Trustee, Lyondell Chemical Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to the Declaration)
in accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
Lyondell Trust I (at the rate of exchange specified in the terms of the
Preferred Securities set forth as Exhibit B to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned into Common
Stock (at the conversion rate specified in the terms of the Preferred Securities
set forth as Exhibit B to the Declaration, subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration)).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
B-24
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to be
issued, along with the address or addresses of such
person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
__________________
**(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership
B-25
__________________
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
B-26
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax identification number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-27
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust I dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Common Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________), and each with a liquidation amount with respect to the
assets of the Trust of $[50][25] per Common Security, are hereby designated as
"____% Convertible Common Trust Securities, Series A". The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex I, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice. The Common
Securities are to be issued and sold to Lyondell in consideration of
$_____________ in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Lyondell having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $[50][25] per Common Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded quarterly. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds
on hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
___________, ____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of Common
Securities as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be one business day prior to the relevant
Distribution date, and if the Preferred Securities are no longer in book-
entry only form, the relevant record dates for the Common Securities
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will be the fifteenth (15th) day of the month prior to the relevant
Distribution date, which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions payable on any
Common Securities that are not punctually paid on any Distribution payment
date as a result of Lyondell's having failed to make the corresponding
interest payment on the Debentures will forthwith cease to be payable to the
person in whose name such Common Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Common Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Lyondell has elected to make a full or partial
payment of interest accrued on the Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions
are payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
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satisfaction of liabilities to the creditors of the Trust, an amount equal
to the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and the Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on, such Preferred Securities and the
Common Securities, shall be distributed Pro Rata to the Holders of the
Preferred Securities and the Common Securities in exchange for such
Securities.
If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Preferred Securities and the Common Securities shall be paid, subject to
the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Common Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
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interest equal to accumulated and unpaid Distributions on, such Common
Securities until such Certificates are presented to Lyondell or its agent
for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only if
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $[50][25] per Preferred Security and
Common Security plus an amount equal to accumulated and unpaid Distributions
thereon to the date of redemption, payable in cash (the "Redemption Price").
The date of any such repayment or redemption of Preferred Securities and
Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in paragraph 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the Common
Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of
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Default has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the
Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Common
Securities unless all accumulated and unpaid Distributions have been paid on
all Common Securities for all quarterly Distribution periods terminating on
or prior to the date of redemption.
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(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed
will be redeemed Pro Rata from each Holder of Common Securities
(subject to adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this
paragraph 4 (which notice will be irrevocable), then immediately prior
to the close of business on the redemption date, provided that Lyondell
has paid to the Property Trustee in immediately available funds a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, Distributions will cease to accumulate on
the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Common Securities so called for redemption will cease, except the
right of the Holders of such Common Securities to receive the
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Common Securities which have
been so called for redemption. If any date fixed for redemption of
Common Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business
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Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Common Securities is improperly
withheld or refused and not paid by the Property Trustee, Distributions
on such Common Securities will continue to accumulate, from the
original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to Holders of the Common Securities.
[5. CONVERSION RIGHTS.
The Holders of Common Securities shall have the right at any time prior to
the close of business on , ____ or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause the Conversion Agent to
convert Common Securities, on behalf of the converting Holders, into shares of
Common Stock in the manner described herein on and subject to the following
terms and conditions:
(a) The Common Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by the
Trust on the basis of one Common Security per $[50][25] principal amount of
Debentures, and immediately convert such amount of Debentures into fully
paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50][25] principal amount of Debentures (which
is equivalent to a
C-8
conversion price of $__ per share of Common Stock, subject to certain
adjustments set forth in Sections __ and __ of the Supplemental Indenture
(as so adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Common Securities on behalf of such Holder
(the "Conversion Request"), together, if the Common Securities are in
certificated form, with such Common Security Certificates. The Conversion
Request shall (i) set forth the number of Common Securities to be converted
and the name or names, if other than the Holder, in which the shares of
Common Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Common Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock, subject to certain adjustments set forth in the Supplemental
Indenture (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Common Securities for a portion of the Debentures held by the Trust, and the
Trust shall, upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Sponsor
of the Holder's election to convert such Debentures into shares of Common
Stock. If a Common Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date,
then, notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Common Security is registered at the close of business on such record
date, and (other than a Common Security or a portion of a Common Security
called for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered for
conversion, the Common Security must be accompanied by payment of an amount
equal to the Distribution payable on such Distribution payment date. Except
as provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any conversion
on account of any accumulated and unpaid Distributions accumulated on the
Common Securities surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Common Stock issued upon
such conversion, and the delivery of Common Stock upon conversion of the
Common Securities shall be deemed to constitute full payment for all
accumulated and unpaid Distributions on the Common Securities.
C-9
Common Securities shall be deemed to have been converted immediately prior
to the close of business on the day on which a Notice of Conversion relating
to such Common Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons entitled
to receive Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the Conversion
Date, the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if any,
in lieu of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the Notice of
Conversion, and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such
Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof appoints
The First National Bank of Chicago as the "Conversion Agent" for the purpose
of effecting the conversion of Common Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Common Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Common Securities from
time to time for Debentures held by the Trust in connection with the
conversion of such Common Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Common Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Common Securities so
converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time
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to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Sponsor shall be entitled to
deliver upon conversion of Debentures, shares of Common Stock reacquired and
held in the treasury of the Sponsor (in lieu of the issuance of authorized
and unissued shares of Common Stock), so long as any such treasury shares
are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of Common
Securities free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of the
Sponsor and the Trust shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Common Stock
(and all requirements to list Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the
Debentures and the Trust to lawfully deliver Common Stock to each Holder of
Common Securities upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Common Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that in which the Common Securities so converted were registered, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Common
Securities or set forth in this Exhibit C to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment,
removal or replacement to be approved by Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on such amendment or
proposal as a single class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class of Securities will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a Majority in liquidation amount
of such class of Securities, (B) the rights of Holders of Common Securities
under Section 5.02 of the Declaration to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the consent
of each Holder of Common Securities, and (C) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take
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any action in accordance with the directions of the Holders of Securities unless
the Property Trustee shall have received, at the expense of the Sponsor, an
Opinion of Counsel experienced in such matters to the effect that the Trust will
not be classified for United States federal income tax purposes as other than a
grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities
and Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect that for United States federal income tax purposes the Trust will not be
classified as other than a grantor trust on account of such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
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A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for
the Trust to redeem and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common Securities
to any payment, Distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of
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a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of the
Trust by check mailed to the address of the persons entitled thereto and that
the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Common Securities without charge on written request to the Trust at its
principal place of business.
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Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
________________ ____________________
Certificate Evidencing Common Securities
of
Lyondell Trust I
____% Convertible Common Trust Securities, Series A
(liquidation amount $[50][25] per Common Security)
Lyondell Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing common undivided beneficial
interests in the assets of the Trust and designated the "____% Convertible
Common Trust Securities, Series A" (liquidation amount $[50][25] per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below) including, without limitation, Section 9.01(c) thereof. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this Certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of __________, ____, as the same may be amended from
time to time (the "Declaration") including the designation of the terms of
Common Securities as set forth in Exhibit C thereto. The Common Securities and
the Preferred Securities issued by the Trust
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pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Debentures (as defined in the Declaration)
issued by Lyondell Chemical Company, a Delaware corporation ("Lyondell"), to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust will
furnish a copy of the Declaration and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Supplemental Indenture) as and to the extent provided in the
Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ___ day of _____________, ____.
LYONDELL TRUST I
By ________________________, as Regular Trustee
Name:
Title: Regular Trustee
By _________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
C-17
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate additional distributions thereon at the
Coupon Rate per annum (to the extent permitted by applicable law) compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from _________, ____
and will be payable quarterly in arrears, on _____________, ____________,
_____________ and _____________ of each year, commencing on ________, ____, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Lyondell shall not be in
default in the payment of interest on the Debentures, Lyondell has the right
under the Indenture for the Debentures to defer payments of interest on the
Debentures by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions thereon
(to the extent permitted by applicable law but not at a rate greater than the
rate at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures.
Prior to the termination of any such Extension Period, Lyondell may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period and
the payment of all amounts then due, Lyondell may commence a new Extension
Period, subject to the above requirements. Payments of accumulated
Distributions will be payable to Holders of Common Securities as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period.
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The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock (as
defined in the Declaration), through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock, in the manner and according to the terms set forth in the
Declaration.]
C-19
[CONVERSION REQUEST
To: ______________________,
as Property Trustee of Lyondell Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of _____________ , ____ (as amended from
time to time, the "Declaration"), by _________, _____________ and ____________,
as Regular Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The
First National Bank of Chicago, as the Property Trustee, Lyondell Chemical
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by Lyondell Trust I (at the rate of exchange specified in the terms of the
Common Securities set forth as Exhibit C to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration), subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
_______________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the
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shares of Common Stock are to be issued, along with the
address or addresses of such person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:* ____________
______________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-22