EXECUTION COPY
EXHIBIT 1.1
MILLENNIUM AMERICA INC.
$100,000,000
9 1/4% Senior Notes due 2008
PURCHASE AGREEMENT
June 20, 2002
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
DAIWA SECURITIES SMBC EUROPE LIMITED
SG COWEN SECURITIES CORPORATION
c/o J.P. Morgan Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
Millennium America Inc., a Delaware corporation (the
"Issuer"), proposes to issue and sell $100,000,000 aggregate principal amount of
its 9 1/4% Senior Notes due 2008 (such $100,000,000 aggregate principal amount
of securities being referred to as the "Securities"), which will be guaranteed
(the "Guarantee") on a senior unsecured basis by Millennium Chemicals Inc., a
Delaware corporation and the indirect parent company of the Issuer (the
"Company"). The Securities will be issued pursuant to an Indenture dated as of
June 18, 2001 (the "Indenture") among the Issuer, the Company and The Bank of
New York, as trustee (the "Trustee"). The Issuer and the Company hereby confirm
their agreement with J.P. Morgan Securities Inc. ("JPMorgan") and Banc of
America Securities LLC, BNP Paribas Securities Corp., Credit Lyonnais Securities
(USA) Inc., Daiwa Securities SMBC Europe Limited and SG Cowen Securities
Corporation (together with JPMorgan, the "Initial Purchasers") concerning the
purchase of the Securities from the Issuer by the several Initial Purchasers.
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The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Issuer will
prepare an offering memorandum dated the date hereof (the "Offering Memorandum")
setting forth information concerning the Issuer, the Company and the Securities.
Copies of the Offering Memorandum will be delivered by the Issuer to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to the
Offering Memorandum shall, unless otherwise noted, be deemed to include all
amendments and supplements thereto and all documents incorporated by reference
therein. The Issuer hereby confirms that it has authorized the use of the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers
and their direct and indirect transferees) will be entitled to the benefits of
an Exchange and Registration Rights Agreement, substantially in the form
attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to
which the Issuer and the Company will agree to file with the Securities and
Exchange Commission (the "Commission") (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") registering an
issue of senior notes of the Issuer (the "Exchange Securities") that are (A)
identical in all material respects to the Issuer's 9 1/4% Senior Notes due 2008
(CUSIP number 60036NAD3) and (B) identical in all material respects to the
Securities (except that the Exchange Securities will not contain terms with
respect to transfer restrictions) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
The Securities are being offered in connection with the
repayment of certain existing indebtedness of the Company and its subsidiaries
outstanding under the Credit Agreement dated as of June 18, 2001 (as amended,
supplemented or otherwise modified from time to time), among the Issuer,
Millennium Inorganic Chemicals Limited, the other borrowing subsidiaries of the
Company party thereto, the Company, the lenders party thereto, the issuing banks
party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as administrative agent and
collateral agent (the "Credit Agreement"). The transaction described in the
preceding sentence is referred to herein as the "Refinancing".
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company.
The Issuer and the Company jointly and severally represent and warrant to, and
agree with, the several Initial Purchasers on and as of the date hereof and the
Closing Date (as defined in Section 3) that:
(a) The Offering Memorandum, as of its date, did not, and on
the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
the Issuer and the Company make no representation or warranty as to
information contained in or omitted from the Offering Memorandum in
reliance upon and in conformity with
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written information furnished to the Issuer or the Company by or on
behalf of any Initial Purchaser specifically for use therein (the
"Initial Purchasers' Information").
(b) The documents incorporated by reference in the Offering
Memorandum, when filed with the Commission, conformed or will conform,
as the case may be, in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) The Offering Memorandum, as of its date, contains all of
the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchasers and the initial resale of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement and the
Offering Memorandum, to register the Securities under the Securities
Act.
(e) The Company and each of its Significant Subsidiaries (as
defined in Regulation S-X under the Securities Act) have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have the corporate power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(f) As of the Closing Date, the Company will have an
authorized capitalization as set forth in the Offering Memorandum under
the heading "Capitalization"; and all of the outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable. All of the outstanding
shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and are, except as set forth on Schedule (1)(e) hereto,
owned directly or indirectly by the Company, free and clear of any
lien, charge, encumbrance, security interest, restriction upon voting
or transfer or any other claim of any third party except for liens
created pursuant to the Credit Agreement and the agreements related
thereto. Except as described in the Offering Memorandum or the Proxy
Statement for the 2002 Annual Meeting of Shareholders of the Company or
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pursuant to employee benefit plans of the Company or as provided in
Section 2 of the Amended and Restated Equistar Parent Agreement or
Section 2 of the Parent Agreement between the Company and Linde AG,
there are no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or
issuance of, any shares of capital stock of or other equity or other
ownership interest in the Company or any of its Significant
Subsidiaries.
(g) The Issuer and the Company each have (and, in the case of
the Indenture, had) the corporate power and authority to execute and
deliver this Agreement, the Indenture, the Registration Rights
Agreement, the Securities (in the case of the Issuer only), the
Guarantee (in the case of the Company only) and the Second Amendment
dated as of June 19, 2002, to the Credit Agreement among the parties to
the Credit Agreement (the "Second Amendment" and, collectively, the
"Transaction Documents") and to perform their respective obligations
hereunder and thereunder; and all corporate action required to be taken
for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(h) This Agreement has been duly authorized, executed and
delivered by the Issuer and the Company.
(i) The Registration Rights Agreement has been duly authorized
by the Issuer and the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Issuer and the
Company enforceable against the Issuer and the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and except as enforcement thereof is subject to
general equitable principles (whether considered in a proceeding in
equity or at law), and any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations.
(j) The Indenture has been duly authorized by the Issuer and
the Company and constitutes a valid and legally binding agreement of
the Issuer and the Company enforceable against the Issuer and the
Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and except as enforcement
thereof is subject to general equitable principles (whether considered
in a proceeding in equity or at law). The Indenture is qualified under
the Trust Indenture Act of 1939, as amended, and conforms in all
material respects to the requirements thereof and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(k) The Securities have been duly authorized by the Issuer and
the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein,
will be duly and validly issued and outstanding and will
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constitute valid and legally binding obligations of the Issuer, as
issuer, and the Company, as guarantor, entitled to the benefits of the
Indenture and enforceable against the Issuer, as issuer, and the
Company, as guarantor, in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and except as enforcement thereof is subject to general
equitable principles (whether considered in a proceeding in equity or
at law).
(l) The Guarantee has been duly authorized by the Company and,
when the Securities have been duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein,
will constitute a valid and legally binding obligation of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company, in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and except as enforcement
thereof is subject to general equitable principles (whether considered
in a proceeding in equity or at law).
(m) The Credit Agreement has been duly authorized and
constitutes a valid and legally binding agreement of the Issuer, the
Company and each other subsidiary of the Company party thereto,
enforceable against the Issuer, the Company and each other subsidiary
of the Company party thereto in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and except as enforcement thereof is subject to general equitable
principles (whether considered in a proceeding in equity or at law).
(n) The Second Amendment has been duly authorized and
constitutes a valid and legally binding agreement of the Issuer, the
Company and each other subsidiary of the Company party thereto,
enforceable against the Issuer, the Company and each other subsidiary
of the Company party thereto in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and except as enforcement thereof is subject to general equitable
principles (whether considered in a proceeding in equity or at law).
(o) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(p) The execution, delivery and performance by the Issuer and
the Company of each of the Transaction Documents to which each is a
party, the issuance, authentication, sale and delivery of the
Securities and compliance by the Issuer and the Company with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents (i) will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust,
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loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, (ii) will not result
in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries and (iii) will not result in any
violation of any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets, except, in the case of clauses (i) and
(iii) above, such as would not, singularly or in the aggregate, have a
Material Adverse Effect; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator
or governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Issuer and the Company of each of the Transaction
Documents to which each is a party, the issuance, authentication, sale
and delivery of the Securities and compliance by the Issuer and the
Company with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which shall have been obtained or made prior to the Closing Date and
(ii) as may be required to be obtained or made under the Securities Act
and applicable state securities laws as provided in the Registration
Rights Agreement.
(q) The historical financial statements (including the related
notes) incorporated by reference in the Offering Memorandum have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated;
and the financial information contained in the Offering Memorandum
under the heading "Capitalization" and in the Annual Report of the
Company on Form 10-K for the fiscal year ended December 31, 2001 under
the heading "Selected Financial Data" is derived from the accounting
records of the Company and its subsidiaries and Equistar and fairly
presents the information purported to be shown thereby. The other
historical financial and statistical information and data included or
incorporated by reference in the Offering Memorandum are, in all
material respects, fairly presented.
(r) Except as described in the Offering Memorandum, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which (A)
singularly or in the aggregate could reasonably be expected to have a
Material Adverse Effect or (B) question the validity or enforceability
of any of the Transaction Documents or any action taken or to be taken
pursuant thereto; and to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(s) No action has been taken, to the knowledge of the Company,
and no statute, rule, regulation or order has been enacted, adopted or
issued by any governmental agency or body which prevents the issuance
of the Securities or suspends the sale of the
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Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of its
subsidiaries which would prevent or suspend the issuance or sale of the
Securities or the use of the Offering Memorandum in any jurisdiction;
no action, suit or proceeding is pending against or, to the knowledge
of the Issuer and the Company, threatened against or affecting the
Company or any of its subsidiaries before any court or arbitrator or
any governmental agency, body or official, domestic or foreign, which
could reasonably be expected to interfere with or adversely affect the
issuance of the Securities in any material respect or in any manner
draw into question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant
thereto; and the Issuer has complied with any and all requests by any
securities authority in any jurisdiction for additional information to
be included in the Offering Memorandum.
(t) Neither the Company nor any of its Significant
Subsidiaries is (i) in violation of its charter or by-laws, (ii) in
default, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) in violation of
any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject except, in the case
of clauses (ii) and (iii), such as would not, singularly or in the
aggregate, have a Material Adverse Effect.
(u) The Company and each of its Significant Subsidiaries
possess all material licenses, certificates, authorizations and permits
issued by, and have made all declarations and filings with, the
appropriate federal, state or foreign regulatory agencies or bodies
which are necessary for the ownership of their respective properties or
the conduct of their respective businesses as described in the Offering
Memorandum, except where the failure to possess or make the same would
not, singularly or in the aggregate, have a Material Adverse Effect,
and neither the Company nor any of its subsidiaries has received
notification of any revocation or modification of any such license,
certificate, authorization or permit or has any reason to believe that
any such license, certificate, authorization or permit will not be
renewed in the ordinary course.
(v) The Company and each of its Significant Subsidiaries have
filed all material federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and
have paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its Significant
Subsidiaries which has had (nor does the Company or any of its
Significant Subsidiaries have any knowledge of any tax deficiency which
could reasonably be expected to have) a Material Adverse Effect.
(w) Neither the Company nor the Issuer is (i) an "investment
company" or a company "controlled by" an investment company within the
meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or a "subsidiary
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company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(x) The Company and each of its Significant Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability and (iii) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(y) The Company and each of its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, which insurance is in amounts and of such types as is
customary in the industries in which the Company operates. Neither the
Company nor any of its subsidiaries has received notice from any
insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue
such insurance, except such as would not have a Material Adverse
Effect.
(z) Except as disclosed in the Offering Memorandum, the
Company and each of its Significant Subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses, except where
the failure to own or possess such rights would not have a Material
Adverse Effect; and the conduct of their respective businesses will not
conflict with, and the Company and its subsidiaries have not received a
notice of any claim of conflict with, any such rights of others, except
such as would not have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries have good and
marketable title to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections
of title except such as (i) do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries, (ii) are imposed pursuant to the Credit Agreement or
permitted thereby or (iii) could not reasonably be expected to have a
Material Adverse Effect.
(bb) No labor disturbance by or dispute with the employees of
the Company or any of its Significant Subsidiaries exists or, to the
knowledge of the Company, is contemplated or threatened.
(cc) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue
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Code of 1986, as amended from time to time (the "Code")) or
"accumulated funding deficiency" (as defined in Section 302 of
ERISA) ---- or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect
to any employee benefit plan of the Company or any of its subsidiaries,
in any such case, which could reasonably be expected to have a Material
Adverse Effect; each such employee benefit plan is in compliance in all
material respects with applicable law, including ERISA and the Code;
the Company and each of its subsidiaries have not incurred and do not
expect to incur any material liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any pension plan for
which the Company or any of its subsidiaries would have any liability;
and each such pension plan that is intended to be qualified under
Section 401(a) of the Code is the subject of a favorable determination
letter issued by the Internal Revenue Service with respect to its
qualified status and, to the Company's knowledge, nothing has occurred,
whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
(dd) Except for matters described in the Offering Memorandum,
there has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind
of toxic or other wastes or other hazardous substances by, due to or
caused by the Company or any of its subsidiaries (or, to the best
knowledge of the Company, any other entity (including any predecessor)
for whose acts or omissions the Company or any of its subsidiaries is
or could reasonably be expected to be liable) upon any of the property
now or previously owned or leased by the Company or any of its
subsidiaries, or upon any other property, in violation of any statute
or any ordinance, rule, regulation, order, judgment, decree or permit
or which would, under any statute or any ordinance, rule (including
rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability, except for any violation or liability that
could not reasonably be expected to have, singularly or in the
aggregate with all such violations and liabilities, a Material Adverse
Effect; and there has been no disposal, discharge, emission or other
release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Issuer or the Company
has knowledge, except for any such disposal, discharge, emission or
other release of any kind which could not reasonably be expected to
have, singularly or in the aggregate with all such discharges and other
releases, a Material Adverse Effect.
(ee) Neither the Company nor, to the knowledge of the Issuer
and the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from
corporate funds, (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977, or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment,
except such as would not, singularly or in the aggregate, have a
Material Adverse Effect.
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(ff) On and immediately after the Closing Date, each of the
Issuer and the Company (after giving effect to the issuance of the
Securities and to the other transactions related thereto as described
in the Offering Memorandum) will be Solvent. As used in this paragraph,
the term "Solvent" means, with respect to a particular date, that on
such date (i) the present fair market value (or present fair saleable
value) of the assets of the Issuer or the Company, as applicable, is
not less than the total amount required to pay the probable liabilities
of the Issuer or the Company, as applicable, on its total existing
debts and liabilities (including contingent liabilities) as they become
absolute and matured, (ii) the Issuer or the Company, as applicable, is
able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of
the Securities as contemplated by this Agreement and the Offering
Memorandum, the Issuer or the Company, as applicable, is not incurring
debts or liabilities beyond its ability to pay as such debts and
liabilities mature and (iv) the Issuer or the Company, as applicable,
is not engaged in any business or transaction, and is not about to
engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which the Issuer or the
Company, as applicable, is engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(gg) None of the proceeds of the sale of the Securities will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(hh) Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Company or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities.
(ii) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(jj) None of the Company, any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under
the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable.
(kk) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as such
term is defined in the Securities Act), which is or will be integrated
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with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(ll) None of the Company or any of its affiliates or any other
person acting on its or their behalf has engaged, in connection with
the offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D
under the Securities Act (it being understood that neither the Company
nor the Issuer makes any representation as to the activities of the
Initial Purchasers).
(mm) There are no securities of the Issuer or the Company
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or listed on a national securities exchange or quoted
in a U.S. automated inter-dealer quotation system, except for the
common stock of the Company and the Issuer's 9 1/4% Senior Notes due
2008 (CUSIP number 60036NAD3).
(nn) None of the Issuer or the Company has taken or will take,
directly or indirectly, any action prohibited by Regulation M under the
Exchange Act in connection with the offering of the Securities.
(oo) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
(pp) Since the dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (i) there has
been no material adverse change or any development involving a
prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Issuer or the Company, whether or not arising in the
ordinary course of business, (ii) none of the Issuer or the Company has
incurred any material liability or obligation, direct or contingent,
other than in the ordinary course of business, (iii) none of the Issuer
or the Company has entered into any material transaction other than in
the ordinary course of business and (iv) there has not been any
material change in the capital stock or long-term debt of the Issuer or
the Company, or any dividend or distribution of any kind declared, paid
or made by the Issuer or the Company on any class of their respective
capital stock.
(qq) PricewaterhouseCoopers LLP are independent certified
public accountants with respect to the Company and its subsidiaries and
Equistar within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants
("AICPA") and its interpretations and rulings thereunder.
2. Purchase and Resale of the Securities. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Issuer agrees to issue and sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Issuer, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on
12
Schedule 1 hereto at a purchase price equal to 100.9625% of the principal amount
thereof. The Issuer shall not be obligated to deliver any of the Securities
except upon payment for all of the Securities to be purchased as provided
herein.
(b) The Initial Purchasers have advised the Issuer that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and, in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S.
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) the Securities have not been registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except pursuant
to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(ii) such Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act.
(iii) None of such Initial Purchaser or any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities,
and all such persons have complied and will comply with the offering
restriction requirements of Regulation S.
(iv) at or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
13
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."
(v) it has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of
the Securities, except with its affiliates or with the prior written
consent of the Issuer.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that (i) it has not offered or sold, and prior
to the date six months after the Closing Date will not offer or sell, any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied, and will comply,
with all applicable provisions of the Financial Services and Markets Act 2000
and the Public Offers of Securities Regulations 1995 with respect to anything
done by it in relation to the Securities in, from or otherwise involving the
United Kingdom and (iii) it has only issued or passed on, and will only issue or
pass on, in the United Kingdom any document received by it in connection with
the issue of the Securities to a person who is of a kind described in Article
49(2)(a) to (e) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2001 (as amended) or is a person to whom such document may
otherwise lawfully be issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees
that, prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Issuer shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Issuer and
the Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(d) and (e), counsel for the Issuer and the
Company and for the Initial Purchasers, respectively, may rely upon the accuracy
of the representations and warranties of the Initial Purchasers and their
compliance with their agreements contained in this Section 2, and each Initial
Purchaser hereby consents to such reliance.
(f) The Issuer and the Company acknowledge and agree that the
Initial Purchasers may sell Securities to any affiliate of an Initial Purchaser
and that any such affiliate may sell Securities purchased by it to an Initial
Purchaser.
14
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of Cravath, Swaine &
Moore, New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Company, at 10:00 A.M., New York City time, on June
26, 2002, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchasers and the Issuer
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Issuer by wire or book-entry transfer of
same-day funds to such account or accounts as the Issuer shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as JPMorgan on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Issuer agrees to make one or more global certificates evidencing the
Securities available for inspection by JPMorgan on behalf of the Initial
Purchasers in New York, New York, at least 24 hours prior to the Closing Date.
4. Further Agreements of the Issuer and the Company. The
Issuer and the Company agree with each of the several Initial Purchasers:
(a) at any time prior to completion of the resale of the
Securities by the Initial Purchasers, to advise the Initial Purchasers
promptly and, if requested, confirm such advice in writing, of the
happening of any event which makes any statement of a material fact
made in the Offering Memorandum untrue or which requires the making of
any additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; to advise the Initial Purchasers promptly of any order
preventing or suspending the use of the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale
in any jurisdiction and of the initiation or threatening of any
proceeding for any such purpose; and to use reasonable efforts to
prevent the issuance of any such order preventing or suspending the use
of the Offering Memorandum or suspending any such qualification and, if
any such suspension is issued, to obtain the lifting thereof at the
earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of
the Offering Memorandum (and any amendments or supplements thereto) as
may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum or filing with the Commission any document that
will be incorporated by reference therein, to furnish a copy of the
proposed amendment, supplement or document to be incorporated by
reference to the Offering Memorandum to each of the Initial Purchasers
and counsel for the Initial Purchasers and not to effect any such
amendment or
15
supplement or to file any such document with the Commission to which
the Initial Purchasers shall reasonably and timely object by notice to
the Issuer; provided, however, that the Initial Purchasers shall have
no right to object to the filing of any document with the Commission
that the Company reasonably believes is required by law to be so filed;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Issuer, to amend
or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement (or any document
to be filed with the Commission and incorporated by reference in the
Offering Memorandum) as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended
or supplemented (or including such document to be incorporated by
reference therein), will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for so long as the Securities are outstanding, to furnish
to the Initial Purchasers upon request copies of any annual reports,
quarterly reports and current reports filed by the Issuer or the
Company with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Issuer
or the Company to the Trustee or to the holders of the Securities
pursuant to the Indenture or the Exchange Act or any rule or regulation
of the Commission thereunder;
(g) to take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may designate and to continue
such qualifications in effect for so long as required for the resale of
the Securities; and to arrange for the determination of the eligibility
for investment of the Securities under the laws of such jurisdictions
as the Initial Purchasers may reasonably request; provided that the
Company and its subsidiaries shall not be obligated to qualify as
foreign corporations in any jurisdiction in which they are not so
qualified or to file a general consent to service of process in any
jurisdiction;
16
(h) to assist the Initial Purchasers in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through The Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company
or any of its subsidiaries (other than the Securities) without the
prior written consent of the Initial Purchasers;
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchasers, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(n) in connection with the offering of the Securities, until
JPMorgan on behalf of the Initial Purchasers shall have notified the
Issuer of the completion of the resale of the Securities, not to, and
to cause its affiliated purchasers (as defined in Regulation M under
the Exchange Act) not to, either alone or with one or more other
persons, bid for or
17
purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Securities, or attempt to
induce any person to purchase any Securities; and not to, and to cause
its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the
price of the Securities;
(o) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date
hereof a copy of the independent accountants' report included in the
Offering Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use reasonable efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
(r) to not take any action prior to the Closing Date which
would require the Offering Memorandum to be amended or supplemented
pursuant to Section 4(d);
(s) prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to either of the Company or the Issuer, its
condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in
the ordinary course of business and consistent with the past practices
of the Company and the Issuer and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers,
unless in the judgment of the Company and its counsel, and after
notification to the Initial Purchasers, such press release or
communication is required by law; and
(t) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Issuer and the Company contained herein,
to the accuracy of the statements of the Issuer and the Company and their
respective officers made in any certificates delivered pursuant hereto, to the
performance by the Issuer and the Company of their respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
18
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company or the Issuer on or prior to the Closing Date
that the Offering Memorandum or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel
for the Initial Purchasers, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction
Documents and the Offering Memorandum, and all other legal matters
relating to the Transaction Documents and the transactions contemplated
thereby, shall be satisfactory in all material respects to the Initial
Purchasers, and the Issuer and the Company shall have furnished to the
Initial Purchasers all documents and information that they or their
counsel may reasonably request to enable them to pass upon such
matters.
(d) Each of C. William Carmean, as Senior Vice
President--General Counsel and Secretary of the Company and the Issuer,
and Fried, Frank, Harris, Shriver & Jacobson shall have furnished to
the Initial Purchasers their written opinion, as counsel to the Company
and the Issuer, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, substantially to the effect set forth in Annex B
and Annex C hereto.
(e) The Initial Purchasers shall have received from Cravath,
Swaine & Moore, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and the Company and the
Issuer shall have furnished to such counsel such documents and
information as they request for the purpose of enabling them to pass
upon such matters.
(f) The Company shall have furnished to the Initial Purchasers
a letter (the "Initial Letter") of PricewaterhouseCoopers LLP,
addressed to the Initial Purchasers and dated the date hereof, in form
and substance satisfactory to the Initial Purchasers.
(g) The Company shall have furnished to the Initial Purchasers
a letter (the "Bring-Down Letter") of PricewaterhouseCoopers LLP,
addressed to the Initial Purchasers and dated the Closing Date (i)
confirming that they are independent public accountants with respect to
the Company and its subsidiaries and Equistar within the meaning of the
Securities Act and the applicable rules and regulations thereunder
adopted by the Commission, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more
than three business days prior to the date of the Bring-Down Letter),
that the conclusions and findings of such accountants with respect to
the financial information and other matters covered by the Initial
Letter are accurate and (iii) confirming in all material respects the
conclusions and findings set forth in the Initial Letter.
19
(h) The Issuer and the Company shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, of their
respective chief executive officers and their respective chief
financial officers stating that (A) such officers have reviewed the
Offering Memorandum, (B) in their opinion, the Offering Memorandum, as
of its date, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and,
since the date of the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or
supplemented) would not include any untrue statement of a material fact
and would not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
(C) as of the Closing Date, the representations and warranties of the
Issuer or the Company, as applicable, in this Agreement are true and
correct in all material respects, and the Issuer or the Company, as
applicable, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder on or
prior to the Closing Date, and (D) subsequent to the date of the most
recent financial statements contained in the Offering Memorandum, there
has been no material adverse change in the financial position or
results of operation of the Company or any of its subsidiaries, or any
change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole.
(i) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Issuer and the Company.
(j) The Securities shall have been duly executed and delivered
by the Issuer and duly authenticated by the Trustee.
(k) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(l) If any event shall have occurred that requires the Issuer
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(m) There shall not have occurred any invalidation of Rule
144A by any court or any withdrawal or proposed withdrawal of any rule
or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchasers would
materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Securities as contemplated hereby.
20
(n) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto
or any document filed with the Commission after the date hereof and
incorporated by reference therein), there shall not have been any
change in the capital stock or long-term debt or any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the
effect of which, in any such case described above, is, in the judgment
of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of
the Securities on the terms and in the manner contemplated by this
Agreement and the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(o) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(p) Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating
accorded the Securities or any of the Company's or the Issuer's other
debt securities by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes
of Rule 436(g)(2) of the rules and regulations of the Commission under
the Securities Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading or
improvement) its rating of the Securities or any of the Company's or
the Issuer's other debt securities.
(q) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities issued or guaranteed by the Company on any
exchange or in the over-the-counter market shall have been suspended,
(ii) any moratorium on commercial banking activities shall have been
declared by federal or New York state authorities or (iii) an outbreak
or escalation of hostilities, a declaration by the United States of a
national emergency or war or a change in general economic, political or
financial conditions or markets or any calamity or crisis, either
within or outside the United States, that, in the judgment of JPMorgan,
is material and adverse and makes it impracticable or inadvisable to
proceed with the sale or the delivery of the Securities on the terms
and in the manner contemplated by this Agreement and in the Offering
Memorandum (exclusive of any amendment or supplement thereto).
21
(r) The Second Amendment shall have been duly authorized by
the Issuer, the Company and each other subsidiary of the Company party
thereto and shall have been executed and delivered by each party
thereto, and all conditions to the effectiveness of the Second
Amendment shall have been satisfied. The Refinancing shall be
consummated substantially concurrently with the sale of the Securities
hereunder.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Initial
Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Issuer prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(m), (n), (o), (p) or (q) shall have occurred and be
continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date,
any Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Issuer and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
36 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers or the Issuer, except that the
Issuer and the Company will continue to be liable for the payment of expenses to
the extent set forth in Sections 8 and 12 and except that the provisions of
Sections 9 and 10 shall not terminate and shall remain in effect. As used in
this Agreement, the term "Initial Purchasers" includes, for all purposes of this
Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto that, pursuant to this Section 7, purchases Securities which a
defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Issuer or any
non-defaulting Initial Purchaser for damages caused by its default. If
other persons are obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial
Purchasers or the Issuer may postpone the Closing Date for up to seven
full business days in order to effect any changes that in the opinion
of counsel for the Issuer or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or
arrangement, and the Issuer agrees to promptly prepare any amendment or
supplement to the Offering Memorandum that effects any such changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Issuer
shall fail to tender the Securities for delivery to the Initial Purchasers or
(c) the Initial Purchasers shall decline to purchase the Securities for any
reason permitted under this Agreement, the Issuer and the Company shall
reimburse the Initial Purchasers for such out-of-pocket expenses (including
reasonable fees and disbursements of counsel) as shall have been reasonably
incurred by the Initial Purchasers in connection with this Agreement and the
proposed purchase and resale of the Securities. If this
22
Agreement is terminated pursuant to Section 7 by reason of the default of one or
more of the Initial Purchasers, the Issuer and the Company shall not be
obligated to reimburse any defaulting Initial Purchaser on account of such
expenses.
9. Indemnification. (a) The Issuer and the Company shall
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Initial Purchaser may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum or in any amendment or supplement thereto or in any
information provided by the Issuer or the Company pursuant to Section 4(e) or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
shall reimburse each Initial Purchaser promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuer and
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with any Initial
Purchasers' Information.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Issuer, their respective
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company or the Issuer within
the meaning of the Securities Act or the Exchange Act (collectively referred to
for purposes of this Section 9(b) and Section 10 as the Company) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with any Initial Purchasers' Information provided by such Initial
Purchaser, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing
23
to defend against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect
24
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
The obligations of the Issuer, the Company and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Issuer, the Company or the Initial Purchasers, as the case
may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuer and the Company on the one
hand and the Initial Purchasers on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Issuer and the Company on the one hand and the Initial Purchasers on the
other with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Issuer
and the Company on the one hand and the Initial Purchasers on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Issuer and
the Company, on the one hand, and the total discounts and commissions received
by the Initial Purchasers with respect to the Securities purchased under this
Agreement, on the other, bear to the total gross proceeds from the sale of the
Securities under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to the Issuer and the Company or information supplied by the Issuer and
the Company on the one hand or to any Initial Purchasers' Information on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuer, the Company and the Initial Purchasers agree that it would
not be just and equitable if contributions pursuant to this Section 10 were to
be determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 10 shall be deemed to include, for purposes of this Section 10, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person
25
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 10 are several in
proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Issuer, the Company and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except (i) as provided in Sections 9 and 10 with respect to affiliates,
officers, directors, employees, representatives, agents and controlling persons
of the Issuer, the Company and the Initial Purchasers and in Section 4(e) with
respect to holders and prospective purchasers of the Securities and (ii) that
any and all obligations of, and services to be provided by, JPMorgan hereunder
may be performed, and any and all rights of JPMorgan hereunder may be exercised,
by or through its affiliates. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
11, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
12. Expenses. The Issuer and the Company agree with the
Initial Purchasers to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Securities and any taxes payable in that
connection, (b) the costs incident to the preparation, printing and distribution
of the Offering Memorandum and any amendments or supplements thereto, (c) the
costs of reproducing and distributing each of the Transaction Documents, (d) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities, (e) the fees and expenses of the
Issuer's and the Company's counsel and independent accountants, (f) the fees and
expenses of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
for the Initial Purchasers), (g) any fees charged by rating agencies for rating
the Securities, (h) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties), (i) all
expenses and application fees incurred in connection with the application for
the inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC and (j) all other costs and expenses
incident to the performance of the obligations of the Issuer and the Company
under this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that except as provided in this Section 12 and
Section 8, the Initial Purchasers shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Issuer, the
Company and the Initial Purchasers contained in this Agreement or made by or on
behalf of the Issuer, the Company or the Initial Purchasers pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any termination or cancelation of this Agreement or any
investigation made by or on behalf of any of them or any of their respective
affiliates, officers, directors, employees, representatives, agents or
controlling persons.
26
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to J.P. Morgan Securities Inc., 270
Park Avenue, New York, New York 10017, Attention: Ken Lang (telecopier
no.: (212) 270-0994); or
(b) if to the Company or the Issuer, shall be delivered or
sent by mail or telecopy transmission to the address of the Company set
forth in the Offering Memorandum, Attention: C. William Carmean
(telecopier no.: (732) 933-5270);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company or the
Issuer shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Initial Purchasers by JPMorgan.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchasers' Information consists solely of the following information in the
Offering Memorandum: (i) the last paragraph on the front cover page concerning
the terms of the offering by the Initial Purchasers and (ii) the statements
concerning the Initial Purchasers contained in the third, ninth and tenth
paragraphs under the heading "Plan of Distribution".
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a
27
binding agreement between the Issuer, the Company and the several Initial
Purchasers in accordance with its terms.
Very truly yours,
MILLENNIUM AMERICA INC.,
By /s/ C. William Carmean
----------------------
Name: C. William Carmean
Title: Senior Vice President - General
Counsel and Secretary
MILLENNIUM CHEMICALS INC.,
By /s/ C. William Carmean
----------------------
Name: C. William Carmean
Title: Senior Vice President - General
Counsel and Secretary
28
Accepted:
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
DAIWA SECURITIES SMBC EUROPE LIMITED
SG COWEN SECURITIES CORPORATION
By J. P. MORGAN SECURITIES INC.,
By /s/ Timothy Donahue
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
1 Chase Manhattan Plaza, 26th floor
New York, New York 10081
Attention: Legal Department
SCHEDULE 1
Principal
Amount
Initial Purchasers of Securities
- ------------------ -------------
J.P. Morgan Securities Inc. $ 48,375,000
Banc of America Securities LLC $ 37,625,000
Credit Lyonnais Securities (USA) Inc. $ 5,000,000
SG Cowen Securities Corporation $ 5,000,000
BNP Paribas Securities Corp. $ 2,000,000
Daiwa Securities SMBC Europe Limited $ 2,000,000
============
Total $100,000,000