1
EXHIBIT 10.1
MASTER TRANSACTION AGREEMENT
BETWEEN
EQUISTAR CHEMICALS, LP,
OCCIDENTAL PETROLEUM
CORPORATION,
LYONDELL PETROCHEMICAL COMPANY
AND
MILLENNIUM CHEMICALS INC.
2
TABLE OF CONTENTS
PAGE
SECTION 1 RELATED AGREEMENTS AND CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Tier 1 Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Tier 2 Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Partnership Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Closing Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Representations and Warranties of the Partnership . . . . . . . . . . . . . . . . . . . 3
2.2 Representations and Warranties of Occidental . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Representations and Warranties of Lyondell . . . . . . . . . . . . . . . . . . . . . . . 11
2.4 Representations and Warranties of Millennium . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Conduct of the Occidental Subject Business Pending the Closing Date . . . . . . . . . . 15
3.3 Conduct of the Partnership Subject Business Pending the Closing Date . . . . . . . . . . 17
3.4 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.5 Notifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.6 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.7 Partnership Unanimous Consent Items . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1 Conditions Precedent to Obligations of All Parties . . . . . . . . . . . . . . . . . . . 21
(a) No Injunction, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Tier 2 Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Government Licenses and Consents . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.2 Conditions Precedent to Obligations of the Partnership . . . . . . . . . . . . . . . . . 21
(a) Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . 22
(b) Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.3 Conditions Precedent to Obligations of Occidental . . . . . . . . . . . . . . . . . . . 22
(a) Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . . . . 22
(b) Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) Board of Directors Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(e) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(f) Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-i-
3
SECTION 5 TERMINATION AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.2 Benefits of Agreement Restricted to Parties . . . . . . . . . . . . . . . . . . . . . . 24
6.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.5 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.6 Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.7 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.10 Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.11 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.12 Jurisdiction; Consent to Service of Process; Waiver . . . . . . . . . . . . . . . . . . 27
6.13 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.14 Action by the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
APPENDICES
Appendix A Definitions
Appendix B List of Related Agreements
SCHEDULES
Schedule 2.1 Exceptions to Representations and Warranties of the
Partnership
Schedule 2.2 Exceptions to Representations and Warranties of Occidental
Schedule 2.3 Exceptions to Representations and Warranties of Lyondell
Schedule 2.4 Exceptions to Representations and Warranties of Millennium
Schedule 4.3(f) Occidental Consents
Schedule 6.10 Certain Expenses
-ii-
4
EXHIBITS
Exhibit A Form of Amended and Restated Agreement of Limited Partnership
Exhibit B Form of Occidental Contribution Agreement
Exhibit C Form of Amended and Restated Parent Agreement
Exhibit D Form of Sales Agreement (Ethylene)
-iii-
5
MASTER TRANSACTION AGREEMENT
This Master Transaction Agreement (this "Agreement") dated May 15, 1998
is entered into by and among Equistar Chemicals, LP, a Delaware limited
partnership (the "Partnership"), Occidental Petroleum Corporation, a Delaware
corporation ("Occidental"), Lyondell Petrochemical Company, a Delaware
corporation ("Lyondell"), and Millennium Chemicals Inc., a Delaware corporation
("Millennium").
The definitions of capitalized terms used in this Agreement, including
the appendices hereto, are set forth in Appendix A hereto.
WHEREAS, Lyondell and Millennium entered into the Master Transaction
Agreement dated July 25, 1997, as amended, which contemplated, among other
things, the formation of the Partnership;
WHEREAS, the Initial Partners entered into the Limited Partnership
Agreement of the Partnership dated October 10, 1997 and the Certificate of
Limited Partnership with respect to the Partnership became effective October
17, 1997;
WHEREAS, the Partnership commenced operations December 1, 1997 upon its
acquisition of the Subject Businesses of Lyondell and Millennium Petrochemicals
Inc., a Virginia corporation and an indirect wholly owned subsidiary of
Millennium ("Millennium Petrochemicals");
WHEREAS, Lyondell and Millennium, the respective ultimate parent entities
of the Initial Partners, desire to admit to the Partnership (i) PDG Chemical
Inc., a Delaware corporation and an indirect, wholly owned subsidiary of
Occidental ("PDG Chemical"), as a general partner, and (ii) Occidental
Petrochem Partner 1, Inc., a Delaware corporation and a wholly owned Subsidiary
("OCC Sub") of Occidental Chemical Corporation, a New York corporation ("OCC"),
and Occidental Petrochem Partner 2, Inc., a Delaware corporation and a wholly
owned Subsidiary ("Oxy CH Sub") of Oxy CH Corporation, a California corporation
("Oxy CH"), as limited partners, upon the transfer to the Partnership of the
Subject Business to be contributed by the Occidental Partners, each a wholly
owned Subsidiary of Occidental;
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Occidental Partners will contribute their Subject Business to the
Partnership through a merger, a partnership interest transfer and certain asset
transfers, the Partnership will issue Units to the Occidental Partners and the
Occidental Partners will become partners in the Partnership, and certain other
agreements will be entered into as provided for herein; and
WHEREAS, the Parties have made all applicable filings under the HSR Act
with respect to the transactions contemplated hereby and have received
confirmation from the Federal Trade Commission of the early termination of the
applicable waiting period under the HSR Act;
6
WHEREAS, the parties who have executed this Agreement (the "Parties") wish
to make certain representations and warranties to one another and provide for
the coordination of the closing of all the transactions contemplated by this
Agreement (the "Closing");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the Parties set forth herein, it is hereby agreed as follows:
SECTION 1
RELATED AGREEMENTS AND CLOSING
1.1 Tier 1 Related Agreements. The Tier 1 Related Agreements are
designated as such on Appendix B. Forms of each of the Tier 1 Related
Agreements (including forms of certain of the exhibits and versions of certain
of the schedules thereto current as of the dates indicated therein) are
attached as Exhibits to this Agreement. On the terms and subject to the
conditions set forth herein, the Parties shall cause each such agreement to be
executed and delivered by the appropriate parties thereto at the Closing in
substantially the form attached hereto with such changes as may be agreed to by
the Parties in good faith.
1.2 Tier 2 Related Agreements. The Tier 2 Related Agreements are
designated as such on Appendix B. The forms of each of the Tier 2 Related
Agreements shall be negotiated by the Parties prior to the Closing in good
faith. On the terms and subject to the conditions set forth herein, the
Parties shall cause such agreements to be executed and delivered in such forms
by the appropriate parties thereto at the Closing.
1.3 Closing Date. Provided that the conditions precedent set
forth in Section 4 of this Agreement shall have been satisfied or waived, the
Closing shall be held at a mutually agreeable location on the date hereof or on
such other date as may be agreed to in writing by the Parties (the "Closing
Date"). The Closing shall be deemed to occur at 4:00 a.m. Houston, Texas time
on the Closing Date.
1.4 Partnership Long-term Debt. At or immediately subsequent to
the Closing Date, the Partnership's long-term debt shall consist of: (i)
borrowings under a bank credit agreement or agreements providing for maximum
borrowings in the amount of $1.25 billion (inclusive of any amounts to be used
for working capital purposes); (ii) Lyondell Assumed Debt (as defined in the
Initial Master Transaction Agreement) in the amount of $745 million and (iii)
Occidental Assumed Debt in the amount of $205 million; provided, however, that
the amount of the credit agreement or agreements described in (i) above may be
adjusted to such greater amount as may be reasonably satisfactory to the
Partnership and Occidental.
1.5 Closing Transactions. As contemplated by this Agreement and
by the Occidental Contribution Agreement and the Amended and Restated
Partnership Agreement, as applicable, on the Closing Date:
-2-
7
(a) OCC will contribute or cause to be contributed
certain assets to OCC Sub which will simultaneously contribute such
assets to the Partnership, subject to the assumption by the Partnership
of certain liabilities;
(b) OCC Sub will assign a lease for certain assets to the
Partnership;
(c) Oxy CH will contribute all of the issued and
outstanding capital stock of Oxy Petrochemicals to Oxy CH Sub;
(d) Oxy Petrochemicals Inc., a wholly owned direct
Subsidiary of Oxy CH Sub ("Oxy Petrochemicals") and the Partnership will
merge, with the Partnership as the surviving entity;
(e) PDG Chemical will contribute or cause to be
contributed certain assets to the Partnership, subject to the assumption
by the Partnership of certain liabilities;
(f) the Partnership will (i) issue Units to the
Occidental Partners (pursuant to asset contributions, partnership
interest transfer or the merger, as the case may be) and the Occidental
Partners will be admitted as partners of the Partnership and (ii) issue
Units to Lyondell LP, Lyondell GP, Millennium LP and Millennium GP;
(g) OCC will agree to guarantee (with the form and terms
thereof to be substantially in the form attached to that certain letter
agreement, of even date, by and between OCC and the Partnership)
$419,700,000 of indebtedness of the Partnership; and
(h) the Partnership shall deliver (i) a note to Oxy CH
Sub obligating the Partnership to pay $419,700,000 plus interest in
accordance with the terms described therein and (ii) a note to Millennium
LP obligating the Partnership to pay $75 million plus interest in
accordance with the terms described therein.
SECTION 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Partnership. Except as
set forth on Schedule 2.1, the Partnership represents and warrants to each
other Party as follows:
(a) Organization, Good Standing and Power. The
Partnership (i) is a limited partnership duly organized, validly existing
and in good standing under the laws of the state of Delaware and has the
power and authority under its constituent documents to own, lease and
operate its assets and to conduct its Subject Business now being
conducted by it, (ii) is duly authorized, qualified or licensed to do
business as a foreign limited partnership in, and is in good standing in,
each of the jurisdictions in which its right, title or interest in or to
any of the assets held by it requires such authorization, qualification
or licensing, except where the failure to be so authorized, qualified,
licensed or in good standing would not be reasonably
-3-
8
likely to have a Material Adverse Effect with respect to its Subject
Business, and (iii) has, and in the case of the Related Agreements to be
executed by it at or prior to the Closing, will have, all requisite
corporate power and authority, or power and authority under its
constituent documents, to enter into this Agreement and, as applicable,
the Related Agreements to which it is or will be a party and to perform
its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by
the Partnership of this Agreement and the consummation by it
of the transactions contemplated hereby have been duly
authorized and approved by all necessary corporate or similar
action on its part. This Agreement has been duly and validly
executed and delivered by the Partnership and is its legal,
valid and binding obligation, enforceable against it in
accordance with its terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws related to or affecting creditors'
rights generally and by general equity principles.
(ii) The execution, delivery and performance by
the Partnership of the Related Agreements to which it will be
a party and the consummation by it of the transactions
contemplated thereby will be, as of the Closing, duly
authorized and approved by all necessary action on its part.
At the Closing, each of the Related Agreements to which the
Partnership will be a party will be duly and validly executed
and delivered by the Partnership and will be upon execution
and delivery a legal, valid and binding obligation,
enforceable against it in accordance with its terms, except
as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws related
to or affecting creditors' rights generally and by general
equity principles.
(c) Lack of Conflicts. Except with respect to the HSR
Act as set forth in Section 4.1(d), each of the execution, delivery and
performance by the Partnership of this Agreement and the Related
Agreements to which it is or will be a party and the consummation by it
of the transactions contemplated hereby and thereby does not and, as of
the Closing, will not (i) violate (with or without the giving of notice
or the lapse of time or both) any Legal Requirement applicable to it or
its Subsidiaries, other than those that would not be reasonably likely to
have a Material Adverse Effect with respect to its Subject Business, (ii)
conflict with, or result in the breach of, any provision of the charter
or by-laws or similar governing or organizational documents of it or its
Subsidiaries, (iii) result in the creation of any Encumbrance upon any of
their assets, other than those contemplated by this Agreement or any of
the Related Agreements, or those that would not be reasonably likely to
have a Material Adverse Effect with respect to its Subject Business, or
(iv) violate, conflict with or result in the breach or termination of or
otherwise give any other Person the right to terminate, or constitute a
default, event of default or an event which with notice, lapse of time or
both, would constitute a default or event of default under the terms of,
any contract, indenture, lease, mortgage, Government License or other
agreement or instrument to which it or any of its Subsidiaries is a party
or by which the properties or businesses of it or any of
-4-
9
its Subsidiaries are bound, except for violations, conflicts, breaches,
terminations and defaults that would not be reasonably likely to have a
Material Adverse Effect with respect to its Subject Business.
(d) Certain Fees. Neither the Partnership nor any of its
Affiliates nor any of its officers, directors or employees, on behalf of
it or such Affiliates, has employed any broker or finder or incurred any
other liability for any financial advisory fees, brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby.
(e) Financial Statements. The Partnership's audited
financial statements as of and for the year ended December 31, 1997 and
any unaudited quarterly financial statements prepared pursuant to Section
5.4 of the Partnership Agreement since December 31, 1997 (in each case
including any notes thereto), were prepared in accordance with United
States generally accepted accounting principles applied on a consistent
basis ("GAAP") throughout the periods indicated (except as may be
indicated in the notes thereto and except that unaudited or quarterly
financial statements do not contain all GAAP notes to such financial
statements) and each fairly presents the consolidated (or combined, as
applicable) financial position, results of operations and changes in
partners' equity and cash flows of the Partnership and its subsidiaries
as at the respective dates thereof and for the respective periods
indicated therein (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments).
(f) Absence of Certain Changes. Since December 31, 1997,
(i) the Partnership and its Affiliates have not incurred any material
liabilities or obligations, fixed, contingent, accrued or otherwise, (A)
that relate to or are allocable to its Subject Business and that have had
or are reasonably likely to have a Material Adverse Effect with respect
to its Subject Business, or (B) that would cause the long-term debt of
the Partnership immediately prior to the Closing to exceed the aggregate
of $1.745 billion and any amounts borrowed under the Partnership's bank
credit facility for working capital, (ii) the Partnership and its
Affiliates have conducted its Subject Business in all material respects
in the ordinary course, and (iii) no event, occurrence or other matter
has occurred that is reasonably likely to have a Material Adverse Effect
with respect to its Subject Business, provided that this determination
shall be made without regard to any change in general economic or
political conditions or any change in raw materials prices, product
prices, industry capacity or other matter of industry-wide application
that affects its Subject Business and Occidental's Subject Business in a
substantially similar way.
(g) Partnership Documents. The Partnership has provided
to Occidental a true and correct copy of the Partnership Agreement, as
amended to date. The Partnership has provided to Occidental true and
correct copies of (i) all minutes of meetings of the Partnership
Governance Committee held to date and such minutes accurately reflect all
actions, approvals and authorizations (including with respect to the
Strategic Plan) by or of the Partnership Governance Committee, (ii) the
Strategic Plan and (iii) the current annual budget of the Partnership.
-5-
10
(h) Partnership Interests. Without giving effect to this
Agreement or the transactions contemplated hereby, Lyondell LP, Lyondell
GP, Millennium LP and Millennium GP are the only Partners in the
Partnership and the only holders of Units, in the denominations set forth
in the Partnership Agreement. Without giving effect to this Agreement or
the transactions contemplated hereby, there are no outstanding
subscriptions, options, convertible securities, warrants or calls of any
kind issued or granted by, or binding upon, the Partnership to purchase
or otherwise acquire or to sell or otherwise dispose of any security of
or equity interest in the Partnership.
(i) Conduct of the Partnership Subject Business since
December 1, 1997. Except as required or contemplated by approvals or
authorizations (including the Strategic Plan) by or of the Partnership
Governance Committee, since the contribution of their Subject Assets to
the Partnership by Lyondell and Millennium on December 1, 1997, the
Partnership has:
(i) maintained its books, accounts and records relating
to its Subject Business in the usual, regular and
ordinary manner, complied in all material respects
with all Legal Requirements and contractual
obligations applicable to its Subject Business or to
the conduct of its Subject Business and performed all
of its material obligations relating to its Subject
Business;
(ii) not (A) modified or changed in any material respect
any of its assets or disposed of any material asset
except for (1) inventory, equipment, supplies and
other assets sold or otherwise disposed of in the
ordinary course of business and (2) any assets that
in the ordinary course of business were replaced with
substantially similar assets, (B) except in the
ordinary course of business, (x) entered into any
contract, commitment or agreement material to the
operation of its Subject Business or use of its
assets or, except as expressly contemplated by or
required pursuant to their respective terms, modified
or changed in any material respect any obligation
under any such contract, commitment or agreement, (y)
modified or changed in any material respect any
obligation under its Government Licenses, (z)
modified or changed in any material respect the
manner in which the products produced by its Subject
Business are marketed and sold, or (C) entered into
interest rate protection or other hedging agreements
(except for hydrocarbon hedging agreements entered
into in the ordinary course and expiring prior to
December 31, 1998) relating to its Subject Business;
provided, that, for purposes of (A) and (B),
"material" shall mean a change or modification that
was subject to the unanimous voting requirement of
Section 6.7 of the Partnership Agreement; and
(iii) not waived any material claims or rights relating to
its Subject Business.
(j) Employee Benefits.
-6-
11
(i) Each of the Partnership's Defined Benefit and Defined
Contribution Pension Plans covering employees
("Employee Plan") is in substantial compliance with
applicable requirements prescribed by any and all
Legal Requirements, including, but not limited to the
Code, except for violations the occurrence of which
would not in the aggregate reasonably be expected to
have a Material Adverse Effect with respect to its
Subject Business;
(ii) The Partnership has in all material respects
performed all obligations required to be performed by
it under ERISA, the Code and any other applicable
Legal Requirements and under the terms of each
Employee Plan, except such failures to perform which
would not in the aggregate reasonably be expected to
have a Material Adverse Effect with respect to its
Subject Business. The Partnership has received no
written notice of the existence of any material
default or violation by any other party of any of
such Legal Requirements, terms or requirements
applicable to any of the Employee Plans;
(iii) Other than routine claims for benefits, the
Partnership has not received any written notice of
any pending material claims or lawsuits which have
been asserted or instituted against any of the
Employee Plans, the assets of the trust or funds
under the Employee Plans, the sponsor or
administrator of any of the Employee Plans, or
against any fiduciary of any of the Employee Plans
with respect to the operation of such Plan;
(iv) The Partnership has not received any written notice
of any pending investigation or pending enforcement
action by the Pension Benefit Guaranty Corporation,
the Department of Labor, the Internal Revenue Service
or any other Authority with respect to any of the
Employee Plans;
(v) All contributions required to be made under the terms
of the Partnership's Employee Plans have been timely
made. No Employee Plan has an "accumulated funding
deficiency" (within the meaning of Section 412 of the
Code or Section 302 of ERISA);
(vi) All of the Partnership's "group health plans" (within
the meaning of Code Section 5000(b)(1)) have been
operated in substantial compliance with the group
health plan continuation coverage requirements of
Section 4980B of the Code and Sections 601 through
608 of ERISA, Title XXII of the Public Health Service
Act and the provisions of the Social Security Act;
(vii) There has been no act or omission by the Partnership
that has given rise to or may give rise to material
fines, penalties, taxes, or related charges under
Section 502(c), (i) or (l) or Section 4071 of ERISA
or Chapter 43 of the Code or the imposition of a lien
pursuant to Sections 401(a)(29) or 412(n) of the Code
or pursuant to ERISA;
-7-
12
(viii) Except with respect to the transactions contemplated
by this Agreement, no "reportable event" within the
meaning of Section 4043 of ERISA, or prohibited
transaction within the meaning of Section 406 of
ERISA, has occurred with respect to any Employee Plan
which would reasonably be expected to have a Material
Adverse Effect; and
(ix) No Employee Plan is a "multiemployer plan" as such
term is defined in section 3(37) of ERISA. No
Employee Plan is a plan maintained by more than one
employer (a so-called "multiple employer plan") for
purposes of section 413(c) of the Code or otherwise.
(k) Conduct of Business in Compliance with Regulatory and
Contractual Requirements. The Partnership and each Affiliate thereof is
operating and conducting its Subject Business in compliance with all
applicable Legal Requirements, rights of concession, licenses, know-how
or other proprietary rights of others, the failure to comply with which
would reasonably be expected to have a Material Adverse Effect with
respect to its Subject Business.
(l) Legal Proceedings. There is no litigation,
proceeding, claim, grievance, arbitration, investigation or other action
to which the Partnership or any Affiliate thereof is a party (including
proceedings or claims by or before the National Labor Relations Board,
the Equal Employment Opportunity Commission, the Department of Labor or
any other Authority) (i) that is pending or, to the Knowledge of the
Partnership, threatened, (ii) that relates in any way to the operation or
conduct of its Subject Business, or to the transactions contemplated by
this Agreement, and (iii) that upon resolution adverse to Partnership or
any Affiliate, could reasonably be expected to have a Material Adverse
Effect with respect to its Subject Business.
(m) Initial Asset Contributions. To the Partnership's
Knowledge, there is no basis for a claim by the Partnership against
Lyondell or Millennium Petrochemicals for breach of representation or
warranty of any of their respective representations and warranties set
forth in the Lyondell Asset Contribution Agreement or the Millennium
Asset Contribution Agreement.
2.2 Representations and Warranties of Occidental. Except as set
forth on Schedule 2.2, Occidental represents and warrants to each other Party
as follows:
(a) Organization, Good Standing and Power. Occidental
and each member of its Group (i) is a corporation, duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its incorporation and has the corporate power and authority to own,
lease and operate its assets and, if applicable, to conduct the Subject
Business now being conducted by it and to be conducted by it as of the
Closing, (ii) is duly authorized, qualified or licensed to do business as
a foreign corporation in, and is in good standing in, each of the
jurisdictions in which its right, title or interest in or to any of the
assets held by it or the Subject Business conducted by it, if applicable,
requires such authorization, qualification or
-8-
13
licensing, except where the failure to be so authorized, qualified,
licensed or in good standing would not be reasonably likely to have a
Material Adverse Effect with respect to its Subject Business, and (iii)
has, and in the case of the Related Agreements to be executed by it at or
prior to the Closing, will have, all requisite corporate power and
authority to enter into this Agreement and, as applicable, the Related
Agreements to which it is or will be a party and to perform its
obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements. Assuming
the approval of Occidental's board of directors referred to in Section
4.3(d):
(i) The execution, delivery and performance by
Occidental of this Agreement and the consummation by it of
the transactions contemplated hereby have been duly
authorized and approved by all necessary corporate or similar
action on its part. This Agreement has been duly and validly
executed and delivered by Occidental and is its legal, valid
and binding obligation, enforceable against it in accordance
with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other laws related to or affecting creditors' rights
generally and by general equity principles.
(ii) The execution, delivery and performance by
Occidental and each member of its Group of the Related
Agreements to which it or any member of its Group will be a
party and the consummation by it and its Group of the
transactions contemplated thereby will be, as of the Closing,
duly authorized and approved by all necessary corporate or
similar action on its or their part. At the Closing, each of
the Related Agreements to which Occidental or any member of
its Group will be a party will be duly and validly executed
and delivered by Occidental or member and will be upon
execution and delivery a legal, valid and binding obligation,
enforceable against it or such member in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws related to or affecting creditors' rights generally and
by general equity principles.
(c) Lack of Conflicts. Assuming satisfaction of the
condition in Section 4.1(c) and receipt of the Consents contemplated by
Schedule 4.3(f), and except with respect to the HSR Act as set forth in
Section 4.1(d), each of the execution, delivery and performance by
Occidental and each member of its Group of this Agreement and the Related
Agreements to which any of them is or will be a party and the
consummation by them of the transactions contemplated hereby and thereby
does not and, as of the Closing, will not (i) violate (with or without
the giving of notice or the lapse of time or both) any Legal Requirement
applicable to any of them or any of their Subsidiaries, other than those
that would not be reasonably likely to have a Material Adverse Effect
with respect to its Subject Business, (ii) conflict with, or result in
the breach of, any provision of the charter or by-laws or similar
governing or organizational documents of any of them or any of their
Subsidiaries, (iii) result in the creation of any Encumbrance upon any of
their assets, other than those contemplated by this Agreement or any of
the Related Agreements, or those that would not be reasonably likely to
have a Material Adverse Effect with respect to its Subject Business, or
(iv) violate, conflict
-9-
14
with or result in the breach or termination of or otherwise give any
other Person the right to terminate, or constitute a default, event of
default or an event which with notice, lapse of time or both, would
constitute a default or event of default under the terms of, any
contract, indenture, lease, mortgage, Government License or other
agreement or instrument to which any of them or any of their Subsidiaries
is a party or by which the properties or businesses of any of them or any
of their Subsidiaries are bound, except for violations, conflicts,
breaches, terminations and defaults that would not be reasonably likely
to have a Material Adverse Effect with respect to its Subject Business.
(d) Certain Fees. Neither Occidental nor any of its
Affiliates nor any of its officers, directors or employees, on behalf of
it or such Affiliates, has employed any broker or finder or incurred any
other liability for any financial advisory fees, brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby.
(e) SEC Reports; Financial Statements.
(i) Occidental has filed all material forms,
reports and documents required to be filed by it with the SEC
since December 31, 1996 (its "SEC Reports"). Occidental's
SEC Reports were prepared in all material respects in
accordance with the requirements of the Securities Act, or
the Exchange Act, as the case may be, and the rules and
regulations thereunder, and none of Occidental's SEC Reports,
as of the date they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ii) The financial statements (including any notes
thereto) contained in Occidental's SEC Reports were prepared
in accordance with GAAP throughout the periods indicated
(except as may be indicated in the notes thereto and except
that financial statements included with quarterly reports on
Form 10-Q do not contain all GAAP notes to such financial
statements) and each fairly presents the consolidated (or
combined, as applicable) financial position, results of
operations and changes in stockholders' equity and cash flows
of Occidental and its subsidiaries as at the respective dates
thereof and for the respective periods indicated therein
(subject, in the case of unaudited statements, to normal and
recurring year-end adjustments).
(f) Absence of Certain Changes. Since December 31, 1996,
(i) Occidental and its Affiliates have not incurred any material
liabilities or obligations, fixed, contingent, accrued or otherwise, that
relate to or are allocable to its Subject Business and that have had or
are reasonably likely to have a Material Adverse Effect with respect to
its Subject Business, (ii) Occidental and its Affiliates have conducted
its Subject Business in all material respects in the ordinary course,
consistent with past practice, and (iii) no event, occurrence or other
matter has occurred that is reasonably likely to have a Material Adverse
Effect with respect to the Subject Business of Occidental, provided that
this determination shall be made without regard to any change in general
economic or political conditions or any change in raw
-10-
15
materials prices, product prices, industry capacity or other matter of
industry-wide application that affects the Partnership's Subject Business
and Occidental's Subject Business in a substantially similar way.
2.3 Representations and Warranties of Lyondell. Except as set
forth on Schedule 2.3, Lyondell represents and warrants to each other Party as
follows:
(a) Organization, Good Standing and Power. Lyondell and
each member of its Group (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority to own, lease and operate its
assets, (ii) is duly authorized, qualified or licensed to do business as
a foreign corporation or other organization in, and is in good standing
in, each of the jurisdictions in which its right, title or interest in or
to any of the assets held by it requires such authorization,
qualification or licensing, except where the failure to be so authorized,
qualified, licensed or in good standing would not be reasonably likely to
have a Material Adverse Effect with respect to the Partnership's Subject
Business, and (iii) has, and in the case of the Related Agreements to be
executed by it at or prior to the Closing, will have, all requisite
corporate power and authority, or power and authority under its
constituent documents, to enter into this Agreement and, as applicable,
the Related Agreements to which it is or will be a party and to perform
its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by
Lyondell of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized
and approved by all necessary corporate or similar action on
its part. This Agreement has been duly and validly executed
and delivered by Lyondell and is its legal, valid and binding
obligation, enforceable against it in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws related to or affecting creditors' rights generally and
by general equity principles.
(ii) The execution, delivery and performance by
Lyondell and each member of its Group of the Related
Agreements to which it or any member of its Group will be a
party and the consummation by it and its Group of the
transactions contemplated thereby will be, as of the Closing,
duly authorized and approved by all necessary corporate or
similar action on its or their part. At the Closing, each of
the Related Agreements to which Lyondell or any member of its
Group will be a party will be duly and validly executed and
delivered by Lyondell or member and will be upon execution
and delivery a legal, valid and binding obligation,
enforceable against it or such member in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws related to or affecting creditors' rights generally and
by general equity principles.
-11-
16
(c) Lack of Conflicts. Except with respect to the HSR
Act as set forth in Section 4.1(d), each of the execution, delivery and
performance by Lyondell and each member of its Group of this Agreement
and the Related Agreements to which any of them is or will be a party and
the consummation by them of the transactions contemplated hereby and
thereby does not and, as of the Closing, will not (i) violate (with or
without the giving of notice or the lapse of time or both) any Legal
Requirement applicable to any of them or any of their Subsidiaries, other
than those that would not be reasonably likely to have a Material Adverse
Effect with respect to Lyondell, (ii) conflict with, or result in the
breach of, any provision of the charter or by-laws or similar governing
or organizational documents of any of them or any of their Subsidiaries,
(iii) result in the creation of any Encumbrance upon any of their assets,
other than those contemplated by this Agreement or any of the Related
Agreements, or those that would not be reasonably likely to have a
Material Adverse Effect with respect to Lyondell, or (iv) violate,
conflict with or result in the breach or termination of or otherwise give
any other Person the right to terminate, or constitute a default, event
of default or an event which with notice, lapse of time or both, would
constitute a default or event of default under the terms of, any
contract, indenture, lease, mortgage, Government License or other
agreement or instrument to which any of them or any of their Subsidiaries
is a party or by which the properties or businesses of any of them or any
of their Subsidiaries are bound, except for violations, conflicts,
breaches, terminations and defaults that would not be reasonably likely
to have a Material Adverse Effect with respect to Lyondell.
(d) Certain Fees. Neither Lyondell nor any of its
Affiliates nor any of its officers, directors or employees, on behalf of
it or such Affiliates, has employed any broker or finder or incurred any
other liability for any financial advisory fees, brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby.
(e) Joint Proxy Statement. The Joint Proxy Statement was
prepared in all material respects in accordance with the requirements of
the Securities Act, or the Exchange Act, as the case may be, and the
rules and regulations thereunder, and, as of the date of the
Stockholders' Meetings and insofar as it relates to the Subject Business
of Lyondell, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(f) Title to Lyondell Units. Without giving effect to
this Agreement or the transactions contemplated hereby, Lyondell LP and
Lyondell GP each owns the number of Units set forth in Section 2.1 of the
Partnership Agreement opposite its name. Except as contemplated by this
Agreement, there are no outstanding subscriptions, options, convertible
securities, warrants or calls of any kind issued or granted by, or
binding upon, the Partnership or any member of the Lyondell Group to
purchase or otherwise acquire or to sell or otherwise dispose of any
security of or equity interest in the Partnership.
-12-
17
2.4 Representations and Warranties of Millennium. Except as set
forth on Schedule 2.4, Millennium represents and warrants to each other Party
as follows:
(a) Organization, Good Standing and Power. Millennium
and each member of its Group (i) is a corporation or a limited liability
company duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
corporate power and authority or power under its constituent documents to
own, lease and operate its assets, (ii) is duly authorized, qualified or
licensed to do business as a foreign corporation or other organization
in, and is in good standing in, each of the jurisdictions in which its
right, title or interest in or to any of the assets held by it requires
such authorization, qualification or licensing, except where the failure
to be so authorized, qualified, licensed or in good standing would not be
reasonably likely to have a Material Adverse Effect with respect to the
Partnership's Subject Business, and (iii) has, and in the case of the
Related Agreements to be executed by it at or prior to the Closing, will
have, all requisite corporate power and authority, or power and authority
under its constituent documents, to enter into this Agreement and, as
applicable, the Related Agreements to which it is or will be a party and
to perform its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by
Millennium of this Agreement and the consummation by it of
the transactions contemplated hereby have been duly
authorized and approved by all necessary corporate or similar
action on its part. This Agreement has been duly and validly
executed and delivered by Millennium and is its legal, valid
and binding obligation, enforceable against it in accordance
with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other laws related to or affecting creditors' rights
generally and by general equity principles.
(ii) The execution, delivery and performance by
Millennium and each member of its Group of the Related
Agreements to which it or any member of its Group will be a
party and the consummation by it and its Group of the
transactions contemplated thereby will be, as of the Closing,
duly authorized and approved by all necessary corporate or
similar action on its or their part. At the Closing, each of
the Related Agreements to which Millennium or any member of
its Group will be a party will be duly and validly executed
and delivered by Millennium or member and will be upon
execution and delivery a legal, valid and binding obligation,
enforceable against it or such member in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws related to or affecting creditors' rights generally and
by general equity principles.
(c) Lack of Conflicts. Except with respect to the HSR
Act as set forth in Section 4.1(d), each of the execution, delivery and
performance by Millennium and each member of its Group of this Agreement
and the Related Agreements to which any of them is or will be a party and
the consummation by them of the transactions contemplated hereby
-13-
18
and thereby does not and, as of the Closing, will not (i) violate (with or
without the giving of notice or the lapse of time or both) any Legal
Requirement applicable to any of them or any of their Subsidiaries, other
than those that would not be reasonably likely to have a Material Adverse
Effect with respect to Millennium, (ii) conflict with, or result in the
breach of, any provision of the charter or by- laws of any of them or any
of their Subsidiaries, (iii) result in the creation of any Encumbrance
upon any of their assets, other than those contemplated by this Agreement
or any of the Related Agreements, or those that would not be reasonably
likely to have a Material Adverse Effect with respect to Millennium, or
(iv) violate, conflict with or result in the breach or termination of or
otherwise give any other Person the right to terminate, or constitute a
default, event of default or an event which with notice, lapse of time or
both, would constitute a default or event of default under the terms of,
any contract, indenture, lease, mortgage, Government License or other
agreement or instrument to which any of them or any of their Subsidiaries
is a party or by which the properties or businesses of any of them or any
of their Subsidiaries are bound, except for violations, conflicts,
breaches, terminations and defaults that would not be reasonably likely
to have a Material Adverse Effect with respect to Millennium.
(d) Certain Fees. Neither Millennium nor any of its
Affiliates nor any of its officers, directors or employees, on behalf of
it or such Affiliates, has employed any broker or finder or incurred any
other liability for any financial advisory fees, brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby.
(e) Joint Proxy Statement. The Joint Proxy Statement was
prepared in all material respects in accordance with the requirements of
the Securities Act, or the Exchange Act, as the case may be, and the
rules and regulations thereunder, and, as of the date of the
Stockholders' Meetings and insofar as it relates to the Subject Business
of Millennium, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(f) Title to Millennium Units. Without giving effect to
this Agreement or the transactions contemplated hereby, Millennium LP and
Millennium GP each owns the number of Units set forth in Section 2.1 of
the Partnership Agreement opposite its name. Except as contemplated by
this Agreement, there are no outstanding subscriptions, options,
convertible securities, warrants or calls of any kind issued or granted
by, or binding upon, the Partnership or any member of the Millennium
Group to purchase or otherwise acquire or to sell or otherwise dispose of
any security of or equity interest in the Partnership.
SECTION 3
ADDITIONAL AGREEMENTS
3.1 Access to Information. Each of Occidental and the
Partnership agrees that, during the period commencing on the date hereof and
ending at the Closing, (i) it will give or cause to be given to any other Party
and its representatives reasonable access during normal business hours to
-14-
19
the offices, plants, properties, books and records relating to its Subject
Business as such other Party may reasonably request, (ii) it will furnish or
cause to be furnished to any other Party, such financial and operating data and
any other information with respect to the business and properties of its
Subject Business as such other Party may reasonably request (provided such data
and information need only be furnished to the extent it was prepared in the
ordinary course) and (iii) any other Party and its representatives shall be
entitled to reasonable access during normal business hours to the
representatives, officers, employees and contractors of such Party who are
involved in its Subject Business as such other Party may reasonably request;
provided, that Lyondell and Millennium also agree to the foregoing provisions
to the extent that any of the foregoing remain in their possession and have not
been transferred to the Partnership; provided, further that, after
consultation, to the extent permissible, with such other Party, such Party may
restrict access and provision of information to the extent it reasonably
believes necessary to (w) comply with existing confidentiality agreements with
third parties (provided that, upon such other Party's reasonable request, it
shall use its commercially reasonable efforts to secure waivers of any such
confidentiality agreements), (x) ensure compliance with antitrust laws, (y)
preserve the secrecy of confidential information to the extent not related to
its Subject Business and (z) preserve legal privilege; and provided, further
that any access or information obtained by any Party and its representatives in
accordance with this Section 3.1 and otherwise in connection with the
consummation of the transactions contemplated by this Agreement and the Related
Agreements shall be subject to the terms and conditions of the Confidentiality
Agreement.
3.2 Conduct of the Occidental Subject Business Pending the
Closing Date. Occidental agrees that, except as required or contemplated by
this Agreement or otherwise consented to or approved in writing by the
Partnership, during the period commencing on the date hereof and ending on the
Closing Date, it will and will cause its Affiliates to:
(a) use its commercially reasonable efforts to operate
and maintain its Subject Business in all material respects only in the
usual, regular and ordinary manner consistent with past practice
(including undertaking scheduled or necessary "turnarounds" or other
maintenance work and including offsite storage, treatment and disposal of
chemical substances generated prior to the Closing) and, to the extent
consistent with such operation and maintenance, use commercially
reasonable efforts to preserve the present business organization of its
Subject Business intact, keep available the services of, and good
relations with, the present employees and preserve present relationships
with all persons having business dealings with its Subject Business,
except in each case for such matters that, individually and in the
aggregate, do not and are not reasonably likely to have a Material
Adverse Effect on its Subject Business;
(b) maintain its books, accounts and records relating to
its Subject Business in the usual, regular and ordinary manner, on a
basis consistent with past practice, comply in all material respects with
all Legal Requirements and contractual obligations applicable to its
Subject Business or to the conduct of its Subject Business and perform
all of its material obligations relating to its Subject Business;
-15-
20
(c) not (i) modify or change in any material respect any
of its Contributed Assets or dispose of any material Contributed Asset
except for (A) inventory, equipment, supplies and other Contributed
Assets sold or otherwise disposed of in the ordinary course of business
and (B) any Contributed Assets that in the ordinary course of business
are replaced with substantially similar Contributed Assets, (ii) except
in the ordinary course of business after consultation with the
Partnership, (x) enter into any contract, commitment or agreement that
would be material to the operation of its Subject Business or use of the
Contributed Assets or, except as expressly contemplated by this Agreement
or expressly contemplated by or required pursuant to their respective
terms, modify or change in any material respect any obligation under any
such contract, commitment or agreement, (y) modify or change in any
material respect any obligation under its Government Licenses, (z) modify
or change in any material respect the manner in which the products
produced by its Subject Business are marketed and sold, or (iii) enter
into interest rate protection or other hedging agreements (except for
hydrocarbon hedging agreements entered into in the ordinary course and
expiring prior to December 31, 1998) relating to its Subject Business;
(d) not waive any material claims or rights relating to
its Subject Business;
(e) after obtaining Knowledge thereof, give notice to the
Partnership of any claim or litigation (threatened or instituted) or any
other event or occurrence which could reasonably be expected to have a
Material Adverse Effect on its Contributed Assets or Subject Business,
other than the types of events, occurrences or other matters referred to
in the proviso set forth in Section 2.2(f)(iii);
(f) not take any action that is reasonably likely to
result in its representations and warranties in Section 2 hereof, or in
the form of Occidental Contribution Agreement, not being true in all
material respects as of the Closing Date; and
(g) not agree, whether in writing or otherwise, to take
any action it has agreed pursuant to this Section 3.2 not to take;
provided, however, that notwithstanding anything to the contrary contained in
this Section 3.2, prior to the Closing Date the Occidental Group and the
Partnership will act independently of each other in making decisions as to the
research and development, raw materials, manufacturing, pricing, marketing and
distribution of their products. It is acknowledged by the Parties that the
Originator Receivables Sale Agreement dated as of October 27, 1998, by and
among Occidental Receivables Inc., OCC and other parties, has been terminated
with respect to Oxy Petrochemicals.
3.3 Conduct of the Partnership Subject Business Pending the
Closing Date. The Partnership agrees that, except as required or contemplated
by approvals or authorizations (including the Strategic Plan) by or of the
Partnership Governance Committee prior to the date hereof or by this Agreement
(including, without limitation, Schedule 3.3 hereto) or otherwise consented to
or approved in writing by Occidental, during the period commencing on the date
hereof and ending on the Closing Date, it will and will cause its Affiliates
to:
-16-
21
(a) use its commercially reasonable efforts to operate
and maintain its Subject Business in all material respects only in a
usual, regular and ordinary manner consistent with the Strategic Plan
(including undertaking scheduled or necessary "turnarounds" or other
maintenance work and including offsite storage, treatment and disposal of
chemical substances generated prior to the Closing) and, to the extent
consistent with such operation and maintenance, use commercially
reasonable efforts to preserve the present business organization of its
Subject Business intact, keep available the services of, and good
relations with, the present employees and preserve present relationships
with all persons having business dealings with its Subject Business,
except in each case for such matters that, individually and in the
aggregate, do not and are not reasonably likely to have a Material
Adverse Effect on its Subject Business;
(b) maintain its books, accounts and records relating to
its Subject Business in the usual, regular and ordinary manner, comply in
all material respects with all Legal Requirements and contractual
obligations applicable to its Subject Business or to the conduct of its
Subject Business and perform all of its material obligations relating to
its Subject Business;
(c) not (i) modify or change in any material respect any
of its assets or dispose of any material asset except for (A) inventory,
equipment, supplies and other assets sold or otherwise disposed of in the
ordinary course of business and (B) any assets that in the ordinary
course of business are replaced with substantially similar assets, (ii)
except in the ordinary course of business after consultation with
Occidental, (x) enter into any contract, commitment or agreement that
would be material to the operation of its Subject Business or use of its
assets or, except as expressly contemplated by this Agreement or
expressly contemplated by or required pursuant to their respective terms,
modify or change in any material respect any obligation under any such
contract, commitment or agreement, (y) modify or change in any material
respect any obligation under its Government Licenses, (z) modify or
change in any material respect the manner in which the products produced
by its Subject Business are marketed and sold, or (iii) enter into
interest rate protection or other hedging agreements (except for
hydrocarbon hedging agreements entered into in the ordinary course and
expiring prior to December 31, 1998) relating to its Subject Business;
provided, that, for purposes of (i) and (ii), "material" shall mean a
change or modification that is subject to the unanimous voting
requirement of Section 6.7 of the Partnership Agreement;
(d) not waive any material claims or rights relating to
its Subject Business;
(e) after obtaining Knowledge thereof, give notice to
Occidental of any claim or litigation (threatened or instituted) or any
other event or occurrence which could reasonably be expected to have a
Material Adverse Effect on its assets or Subject Business, other than the
types of events, occurrences or other matters referred to in the proviso
set forth in Section 2.1(f)(iii);
(f) not take any action that is reasonably likely to
result in its representations and warranties in Section 2 hereof not
being true in all material respects as of the Closing Date;
-17-
22
(g) not to make any distributions that are not in
compliance with Section 3.1 of the Partnership Agreement; and
(h) not agree, whether in writing or otherwise, to take
any action it has agreed pursuant to this Section 3.3 not to take;
provided, however, that notwithstanding anything to the contrary contained in
this Section 3.3, prior to the Closing Date the Occidental Group and the
Partnership will act independently of each other in making decisions as to the
research and development, raw materials, manufacturing, pricing, marketing and
distribution of their products.
3.4 Further Actions.
(a) Each Party will use its commercially reasonable
efforts to take, or cause to be taken, all other action and do, or cause
to be done, all other things necessary, proper or appropriate to resolve
the objections, if any, as may be asserted by any Authority with respect
to the transactions contemplated hereby under any antitrust laws or
regulations; provided that no Party shall be required to take any action
that could have any material adverse effect on its or its Affiliates'
business, operations, prospects, assets, condition (financial or
otherwise) or results of operations or that would, or would be reasonably
likely to, materially frustrate the financial or other business benefits
reasonably expected to be derived by any Party from the transactions
contemplated by this Agreement.
(b) Subject to the terms and conditions hereof, each
Party agrees to act in good faith and to use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement and under the
Related Agreements to be entered into by such Party or its Affiliates at
Closing, and to confirm that such transactions have been accomplished,
including without limitation, using all commercially reasonable efforts:
(i) to obtain and effect prior to the Closing Date all necessary Consents
and Filings; and (ii) to, in the case of Occidental, obtain prior to the
Closing Date all Government Licenses or consents to the transfer of any
Government Licenses that are transferable by it or its Affiliates
necessary to consummate the transactions contemplated hereby and by the
Related Agreements and to allow for the prudent and uninterrupted
operation of the Subject Business by the Partnership after the Closing.
Each Party shall furnish to the other Party and its Affiliates such
necessary information and assistance as the other may reasonably request
in connection with its preparation of any such Filings or other materials
required in connection with the foregoing.
(c) Occidental shall use its commercially reasonable
efforts to procure all Consents that are necessary to transfer its
Subject Business to the Partnership. Notwithstanding any other provision
of this Agreement to the contrary, the Parties hereto acknowledge and
agree that at the Closing Occidental or any Occidental Partner, as
applicable, will not assign to the Partnership any Contract or warranties
which by their terms require Consent from any other contracting party
thereto unless any such Consent has been obtained prior to the Closing
-18-
23
Date. Before the Closing, the other Parties and the Partnership will use
their commercially reasonable efforts and cooperate with Occidental and
the Occidental Partners (together, the "Contracting Party") in obtaining
any necessary Consents to the assignment of the Contracts, including,
without limitation, by furnishing to the Contracting Party or other
parties to any Contract summary financial information and other
information with respect to the Partnership reasonably requested by the
Contracting Party or such other parties and taking any such other actions
(which, subject to any provisions to the contrary included in any Related
Agreement, shall not include the incurrence of any expense not otherwise
required to be incurred) as the Contracting Party or such other parties
may reasonably request for the purpose of obtaining any releases, waivers
or terminations as the Contracting Party may reasonably request on behalf
of itself or any Affiliate. No representation is made by the Contracting
Party with respect to whether any Consent to assign a Contract will be
obtainable, and in no event shall the initial capital contributions be
subject to reduction as a result of any Contract not being assigned to
the Partnership at the Closing by virtue of the necessary Consent not
being obtained. Following the Closing, the Partnership, Occidental and
the Occidental Partners shall cooperate with each other and use
commercially reasonable efforts to obtain those Consents that were not
obtained prior to the Closing and (i) if such Consents are obtained
following the Closing, Occidental and the Occidental Partners shall
execute and deliver any other and further instruments of assignment,
assumption, transfer and conveyance and take such other and further
action as the Partnership may request in order to assign to the
Partnership any Contract or warranties to which such Consents relate and
(ii) pending such transfer or issuance to the Partnership, shall provide,
to the extent it may lawfully do so, the Partnership with the benefits of
any such Contracts, in which case, as provided for in the Occidental
Contribution Agreement, the Partnership shall promptly assume and
discharge (or reimburse Occidental or its Affiliate for) all obligations
and liabilities associated with the benefits of such Contracts so made
available to the Partnership.
(d) Occidental shall keep each other Party fully informed
from time to time as any other Party shall reasonably request as to the
status of all Consents being sought by Occidental or a Occidental Partner
pursuant to Section 3.4(c).
(e) Each Party shall furnish to the other Party such
information, cooperation and assistance as reasonably may be requested in
connection with the foregoing.
(f) Each Party shall negotiate and otherwise act in good
faith to complete, execute and deliver the Related Agreements at the
Closing and to effect the Closing at the earliest practicable date.
3.5 Notifications. Each Party shall notify the other Parties and
keep them advised as to (i) any litigation or administrative proceeding that is
either pending or, to its Knowledge, threatened against such Party which
challenges the transactions contemplated hereby; (ii) in the case of the
Partnership or Occidental, any material damage to or destruction of its Subject
Business and (iii) any fact of which such Party has Knowledge that indicates
that any condition to Closing is reasonably likely not to be satisfied in a
timely fashion.
-19-
24
3.6 Employee Matters.
(a) Substantially all employees of Occidental, OCC, Oxy
Petrochemicals or one of the Occidental Partners who are associated
primarily with Occidental's Subject Business shall be offered employment
with the Partnership pursuant to the terms of the Occidental Contribution
Agreement.
(b) The Partnership shall provide benefits to such
employees who become employees of the Partnership under the benefit plans
and programs of the Partnership upon employment with the Partnership,
subject to the more specific provisions of the Occidental Contribution
Agreement.
(c) No provision of this Agreement shall require OCC, Oxy
Petrochemicals or any of the Occidental Partners to fail to comply with
the terms of any current collective bargaining agreement.
3.7 Partnership Unanimous Consent Items. No action that requires
the consent of Representatives of both Lyondell and Millennium pursuant to
Section 6.7 of the Partnership Agreement shall be taken prior to the Closing
without the consent of Occidental (other than actions regarding this Agreement
and the transactions contemplated hereby).
SECTION 4
CONDITIONS TO CLOSING
4.1 Conditions Precedent to Obligations of All Parties. The
respective obligations of the Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or prior
to the Closing Date of each of the following conditions:
(a) No Injunction, etc. No preliminary or permanent
injunction or other order issued by any federal or state court of
competent jurisdiction in the United States or by any United States
federal or state governmental or regulatory body or any statute, rule,
regulation or executive order promulgated or enacted by any United States
federal or state governmental authority shall be in effect which
materially restrains, enjoins or otherwise prohibits (i) the transactions
contemplated hereby; (ii) the ownership by the Partnership (including
enjoyment of any rights relating thereto) of its Subject Business or
Occidental's Subject Business at and after the Closing; or (iii) the
operation by the Partnership of its Subject Business or Occidental's
Subject Business at and after the Closing; and no Proceeding seeking any
such injunction or order shall be pending; provided, that before any
determination is made to the effect that this condition has not been
satisfied, each Party shall each use commercially reasonable efforts to
have such order or injunction lifted, vacated or dismissed.
(b) Tier 2 Related Agreements. The Parties shall have
reached agreement with respect to definitive execution forms of the Tier
2 Related Agreements in accordance with Section 1.2.
-20-
25
(c) Government Licenses and Consents. Occidental shall
have obtained and effected all Government Licenses and Consents required
from any Authority for the consummation of the transactions contemplated
hereunder and under the Related Agreements to be entered into at the
Closing and required to allow for the prudent and uninterrupted operation
of its Subject Business by the Partnership after the Closing in a manner
consistent with past practices, except for those Government Licenses and
Consents, the absence of which is not, in the aggregate, reasonably
likely to have a Material Adverse Effect with respect to Occidental's
Subject Business.
(d) HSR Act. The waiting period applicable to the
Closing under the HSR Act shall have expired or been terminated, and no
consent, approval, permit or authorization in connection therewith shall
impose terms or conditions that would have, or would be reasonably likely
to have, a material adverse effect on any Party (assuming the Closing has
taken place) or that would, or would be reasonably likely to, materially
frustrate the financial or other business benefits reasonably expected to
be derived by any Party from the transactions contemplated by this
Agreement.
4.2 Conditions Precedent to Obligations of the Partnership. The
obligations of the Partnership under this Agreement are subject to the
satisfaction (or waiver by the Partnership) on or prior to the Closing Date of
each of the following conditions:
(a) Accuracy of Representations and Warranties.
Notwithstanding any investigation, inspection or evaluation conducted or
notice or Knowledge obtained by any member of the Equistar Group, all
representations and warranties of members of the Occidental Group
contained in this Agreement and the Related Agreements that contain
qualifications and exceptions relating to materiality or Material Adverse
Effect shall be true and correct on and as of the Closing Date, and all
other representations and warranties of the members of such Group
contained in such agreements shall be true and correct in all material
respects as of the Closing Date.
(b) Performance of Agreements. Occidental and its
Affiliates shall in all material respects have performed and complied
with all obligations and agreements contained in this Agreement, and
executed all agreements and documents (including the Tier 1 Related
Agreements and the Tier 2 Related Agreements) to be performed, complied
with or executed by it or them on or prior to the Closing Date.
(c) No Material Adverse Change. After the date of this
Agreement, no event, occurrence or other matter shall have occurred that
is reasonably likely to have a Material Adverse Effect with respect to
Occidental's Subject Business, provided that this determination shall be
made without regard to any change in general economic or political
conditions or any change in raw materials prices, product prices,
industry capacity or other matter of industry-wide application that
affects the Partnership's Subject Business and Occidental's Subject
Business in a substantially similar way.
-21-
26
(d) Officer's Certificates. The Partnership shall have
received a certificate, dated the Closing Date, signed by the President
or a Vice President of Occidental to the effect that, to the Knowledge of
Occidental, the conditions specified in the above paragraphs have been
fulfilled.
4.3 Conditions Precedent to Obligations of Occidental. The
obligations of Occidental under this Agreement are subject to the satisfaction
(or waiver by Occidental) on or prior to the Closing Date of each of the
following conditions:
(a) Accuracy of Representations and Warranties.
Notwithstanding any investigation, inspection or evaluation conducted or
notice or Knowledge obtained by any member of the Occidental Group, all
representations and warranties of the Partnership and of members of the
Lyondell Group and the Millennium Group contained in this Agreement and
the Related Agreements that contain qualifications and exceptions
relating to materiality or Material Adverse Effect shall be true and
correct on and as of the Closing Date, and all other representations and
warranties of such Persons contained in such agreements shall be true and
correct in all material respects as of the Closing Date.
(b) Performance of Agreements. Each of the Partnership,
Lyondell and its Affiliates and Millennium and its Affiliates shall in
all material respects have performed and complied with all obligations
and agreements contained in this Agreement, and executed all agreements
and documents (including the Tier 1 Related Agreements and the Tier 2
Related Agreements) to be performed, complied with or executed by it or
them on or prior to the Closing Date.
(c) No Material Adverse Change. After the date of this
Agreement, no event, occurrence or other matter shall have occurred that
is reasonably likely to have a Material Adverse Effect with respect to
the Partnership's Subject Business, provided that this determination
shall be made without regard to any change in general economic or
political conditions or any change in raw materials prices, product
prices, industry capacity or other matter of industry-wide application
that affects the Partnership's Subject Business and Occidental's Subject
Business in a substantially similar way.
(d) Board of Directors Approval. This Agreement and the
Tier 1 Related Agreements, and the transactions contemplated by such
agreements, shall have been duly authorized and approved by Occidental's
board of directors.
(e) Officer's Certificates. Occidental shall have
received certificates, dated the Closing Date, signed by the President or
a Vice President of each of the Partnership, Lyondell and Millennium to
the effect that, to the Knowledge of such Party, the conditions specified
in the above paragraphs have been fulfilled; provided, that, with respect
to the conditions set forth in Sections 4.3(a) and 4.3(b), such
certificates shall only concern the accuracy of representations and
warranties and performance of agreements of the Partnership, the Lyondell
Group and the Millennium Group, respectively.
-22-
27
(f) Third Party Consents. All Consents of any third
party listed on Schedule 4.3(f) shall have been obtained.
SECTION 5
TERMINATION AND WAIVER
5.1 General. This Agreement may be terminated and the
transactions contemplated herein and in the Related Agreements may be abandoned
at any time prior to the Closing:
(a) by the written consent of the Parties;
(b) by the Partnership, by notice to Occidental, if there
has been a material misrepresentation or a breach of an agreement by
Occidental in this Agreement that (i) if such misrepresentation or breach
existed on the Closing Date, would constitute a failure to satisfy the
conditions to Closing set forth in Section 4.2(b) and (ii) has not been
cured and cannot reasonably be cured within 30 days after all other
conditions to Closing have been satisfied;
(c) by Occidental, by notice to the Partnership, if there
has been a material misrepresentation or a breach of an agreement by any
of the Partnership, Lyondell or Millennium in this Agreement that (i) if
such misrepresentation or breach existed on the Closing Date, would
constitute a failure to satisfy the conditions to Closing set forth in
Section 4.3(b) and (ii) has not been cured and cannot reasonably be cured
within 30 days after all other conditions to Closing have been satisfied;
(d) by any Party, by notice to each other Party, if after
the date hereof and prior to the Closing any final, non-appealable order
or injunction shall be issued by any federal or state court of competent
jurisdiction in the United States or by any United States Authority, or
any Legal Requirement shall be promulgated or enacted by any United
States Authority, that would have the effect of prohibiting or making
unlawful the performance of this Agreement, the execution, delivery or
performance of any Related Agreement or the consummation of the Closing;
and
(e) by any Party, by notice to each other Party, in the
event that, for any reason, the Closing does not occur on or before
December 31, 1998; provided, however, that if the Closing does not occur
due to the act or omission of one of the Parties, that Party may not
terminate this Agreement pursuant to the provisions of this Section
5.1(e).
5.2 Effect of Termination. In the event of any termination of
this Agreement as provided above, this Agreement shall forthwith become wholly
void and of no further force and effect and there shall be no liability on the
part of any Party, its Subsidiaries or their respective officers or directors;
provided, however, that upon any such termination the obligations of the
Parties with respect to this Section 5, expenses under Section 6.10 and
confidentiality under Section 6.6 shall remain in full force and effect; and
provided, further, that nothing herein will relieve any party from liability
for damages for any breach of this Agreement.
-23-
28
SECTION 6
MISCELLANEOUS
6.1 Successors and Assigns. Except as may be expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
successors of all of the Parties. No Party may otherwise assign or delegate
any of its rights or obligations under this Agreement without the prior written
consent of all of the other Parties, which consent shall be in the sole and
absolute discretion of each such Party. Any purported assignment or delegation
without such consent shall be void and ineffective.
6.2 Benefits of Agreement Restricted to Parties. This Agreement
is made solely for the benefit of the Parties, and no other Person (including
employees) shall have any right, claim or cause of action under or by virtue of
this Agreement.
6.3 Notices. All notices, requests and other communications that
are required or may be given under this Agreement shall, unless otherwise
provided for elsewhere in this Agreement, be in writing and shall be deemed to
have been duly given if and when (i) transmitted by telecopier facsimile with
proof of confirmation from the transmitting machine or (ii) delivered by
commercial courier or other hand delivery, as follows:
Equistar Chemicals, LP: Occidental Petroleum Corporation:
Gerald A. O'Brien 10889 Wilshire Boulevard
Vice President and Secretary Los Angeles, California 90024
Equistar Chemicals, LP Attention: President
1221 McKinney Street Telecopy Number: (310) 443-6977
Houston, Texas 77010
Telecopy Number: (713) 309-4718
with a copy to: with a copy to:
Baker & Botts, L.L.P. Occidental Petroleum Corporation
910 Louisiana Street 10889 Wilshire Boulevard
Houston, Texas 77002 Los Angeles, California 90024
Attention: Stephen A. Massad Attention: General Counsel
Telecopy Number: (713) 229-1522 Telecopy Number: (310) 443-6333
Lyondell Petrochemical Company: Millennium Chemicals Inc.:
Kerry A. Galvin George H. Hempstead, III
Chief Corporate Counsel and Senior Vice President,
Corporate Secretary Law and Administration and Secretary
Lyondell Petrochemical Company Millennium Chemicals Inc.
1221 McKinney Street 99 Wood Avenue South
Houston, Texas 77010 Iselin, New Jersey 08830
Telecopy Number: (713) 309-4718 Telecopy Number: 908-603-6857
-24-
29
6.4 Severability. In the event that any provision of this
Agreement shall finally be determined to be unlawful, such provision shall, so
long as the economic and legal substance of the transactions contemplated
hereby is not affected in any materially adverse manner as to any of the
Parties, be deemed severed from this Agreement and every other provision of
this Agreement shall remain in full force and effect.
6.5 Press Releases. Unless otherwise mutually agreed, no Party
shall make or authorize any public release of information regarding the matters
contemplated by, or any provisions or terms of, this Agreement or the Related
Agreements, and Occidental shall not make or authorize any public release of
information regarding the Partnership, except (i) that a press release or press
releases in mutually agreed upon form or forms shall be issued by the Parties
as promptly as is practicable following the execution of this Agreement, (ii)
that the Parties may, after consultation with each other, communicate with
employees, customers, suppliers, stockholders, lenders, lessors, and other
particular groups as may be necessary or appropriate and not inconsistent with
the prompt consummation of the transactions contemplated by this Agreement and
(iii) after consultation with each other, as required by law or stock exchange
rule or as necessary for the assertion or enforcement of contractual rights.
6.6 Confidentiality Agreement. Lyondell, on behalf of the
Partnership, and Occidental have heretofore entered into the Confidentiality
Agreement relating to the exchange between Lyondell and the Partnership, on the
one hand, and Occidental and the Occidental Partners, on the other hand, of
certain confidential information related or otherwise pertinent to the
transactions contemplated by this Agreement. Nothing in this Agreement shall
be construed as impairing or otherwise limiting the obligations assumed
pursuant to the Confidentiality Agreement by the parties thereto. The
Confidentiality Agreement shall remain in full force and effect in accordance
with its terms until the earlier of Closing or its expiration date. The
Partnership and Millennium shall be bound by, and shall be entitled to the
benefits of, such Confidentiality Agreement to the same extent as if they were
parties thereto.
6.7 Construction. In construing this Agreement, the following
principles shall be followed: (i) no consideration shall be given to the
captions of the articles, sections, subsections or clauses, which are inserted
for convenience in locating the provisions of this Agreement and not as an aid
in construction; (ii) no consideration shall be given to the fact or
presumption that any of the Parties had a greater or lesser hand in drafting
this Agreement; (iii) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate; (iv) the word "includes" and its
syntactic variants mean "includes, but is not limited to" and corresponding
syntactic variant expressions; (v) the plural shall be deemed to include the
singular, and vice versa; (vi) each gender shall be deemed to include the other
genders; (vii) each exhibit, appendix, attachment and schedule to this
Agreement is a part of this Agreement; and (viii) any reference herein or in
any schedule hereto to any agreements entered into prior to the date hereof
shall include any amendments or supplements made thereto.
6.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.
-25-
30
6.9 Governing Law. The laws of the State of Delaware shall
govern the construction, interpretation and effect of this Agreement without
giving effect to any conflicts of law principles.
6.10 Transaction Costs.
(a) Subject to subsection (b) and Section 2.8 of the
Occidental Contribution Agreement, and except as provided on Schedule
6.10, all reasonable out-of-pocket costs, fees and expenses incurred at
any time by any Party in connection with the negotiation, execution and
delivery of this Agreement, the satisfaction of the conditions to Closing
under this Agreement and the consummation of the transactions
contemplated hereby shall be reimbursed by the Partnership (if the cost,
fee or expense was incurred by a Party other than the Partnership) and if
incurred or reimbursed by the Partnership shall be shared by Lyondell,
Millennium and Occidental pro rata in accordance with the relative
interests to be held by their Subsidiaries in the Partnership after
Closing; provided, however, that if any one expense item or series of
directly related expenses exceeds $5 million, all of such expense or
expenses in excess of such $5 million shall be paid by the Party
incurring such expense.
(b) Notwithstanding the foregoing, each Party shall be
solely responsible for and bear all of its own respective costs, fees and
expenses if this Agreement is terminated and the Closing does not occur.
6.11 Amendment. All waivers, modifications, amendments or
alterations of this Agreement shall require the written approval of each of the
Parties. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including any investigation by or on behalf of any
Party, shall be deemed to constitute a waiver by the Party taking such action
of compliance with any representations, warranties, covenants or agreements
contained herein and in any documents delivered or to be delivered pursuant to
this Agreement and in connection with the Closing hereunder. The waiver by any
Party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.
6.12 Jurisdiction; Consent to Service of Process; Waiver. ANY
JUDICIAL PROCEEDING BROUGHT AGAINST ANY PARTY TO THIS AGREEMENT OR ANY DISPUTE
UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER
RELATED HERETO SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS OF THE STATE OF
DELAWARE, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
TO THIS AGREEMENT ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED)
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES TO
THIS AGREEMENT SHALL APPOINT THE CORPORATION TRUST COMPANY, THE PRENTICE-HALL
CORPORATION SYSTEM, INC. OR A SIMILAR ENTITY (THE "AGENT") AS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF PROCESS IN ANY PROCEEDING IN ANY SUCH COURT IN THE
STATE OF DELAWARE, AND EACH OF THE PARTIES TO THIS AGREEMENT SHALL MAINTAIN THE
APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE AGENT) FROM THE DATE HEREOF UNTIL
THE EARLIER OF THE
-26-
31
CLOSING DATE OR THE TERMINATION OF THIS AGREEMENT AND SATISFACTION OF ALL
OBLIGATIONS HEREUNDER. THE FOREGOING CONSENTS TO JURISDICTION AND APPOINTMENTS
OF AGENT TO RECEIVE SERVICE OF PROCESS SHALL NOT CONSTITUTE GENERAL CONSENTS TO
SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR ANY PURPOSE EXCEPT AS PROVIDED
ABOVE AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE
PARTIES HERETO. EACH PARTY HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED ON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS.
6.13 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
6.14 Action by the Partnership. Any determination (including as
to the satisfaction of any and all conditions precedent to the obligations of
the Partnership set forth in Section 4.2 of this Agreement), consent, approval,
waiver, other action or right to be made, given, taken or exercised by the
Partnership pursuant to or as contemplated by this Agreement shall be subject
to the Partnership Governance Committee unanimous voting requirements set forth
in Section 6.7 of the Partnership Agreement; provided, however, that the
Partnership's exercise of its right of termination set forth in Section 5.1(b)
of this Agreement shall only require the approval of either two or more
Representatives of Lyondell or two or more Representatives of Millennium,
acting separately.
[SIGNATURE PAGES FOLLOW]
-27-
32
IN WITNESS WHEREOF, this Master Transaction Agreement has been executed
on behalf of each of the Parties, by their respective officers thereunto duly
authorized, effective as of the date first written above.
EQUISTAR CHEMICALS, LP
By: /s/ Eugene R. Allspach
-------------------------------------
Name: Eugene R. Allspach
Title: President and Chief
Operating Officer
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ S.P. Dominick, Jr.
-------------------------------------
Name: S.P. Dominick, Jr.
Title: Vice President and Controller
LYONDELL PETROCHEMICAL COMPANY
By: /s/ Dan F. Smith
-------------------------------------
Name: Dan F. Smith
Title: Chief Executive Officer
MILLENNIUM CHEMICALS INC.
By: /s/ George H. Hempstead, III
-------------------------------------
Name: George H. Hempstead, III
Title: Senior Vice President
[Signature Page to Master Transaction Agreement]
-28-
33
APPENDIX A
TO
MASTER TRANSACTION AGREEMENT
DEFINITIONS
"Affiliate" shall mean any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified; provided, however, that for purposes of this
Agreement (i) Canadian Occidental Petroleum Ltd. and any entities controlled by
it shall not be considered an Affiliate of the Occidental Group, (ii) Suburban
Propane Partners, L.P. and any entities controlled by it shall not be
considered an Affiliate of the Millennium Group, (iii) neither the Partnership
nor any entity controlled by it shall be considered an Affiliate of the
Occidental Group, the Lyondell Group or the Millennium Group, (iv) no member of
the Occidental Group, the Lyondell Group or the Millennium Group shall be
considered an Affiliate of the Partnership and (v) the Partnership shall not be
considered an Affiliate of any member of the Occidental Group, the Lyondell
Group or the Millennium Group. For purposes of this definition, the term
"control" shall have the meaning set forth in 17 CFR 230.405, as in effect on
the date hereof.
"Agreement" shall mean this Master Transaction Agreement entered into between
the Parties as of the date hereof.
"Amended and Restated Partnership Agreement" shall mean that certain Amended
and Restated Partnership Agreement of the Partnership to be executed and
delivered at the Closing in substantially the form attached hereto as
Exhibit A.
"Assumed Liabilities" shall have the meaning assigned to such term in the
Occidental Contribution Agreement.
"Authority" shall mean any government or governmental or regulatory body
thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, department or instrumentality thereof, or any court or
arbitrator (public or private).
"Business Day" shall mean any day other than a Saturday, Sunday or other day on
which banks are closed in New York City, New York.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Closing" shall have the meaning set forth in the seventh WHEREAS clause of
this Agreement.
"Closing Date" shall have the meaning set forth in Section 1.3.
"Confidentiality Agreement" shall mean that certain Confidentiality Agreement
dated December 11, 1997 between Lyondell and Occidental.
A-1
34
"Consent" shall mean any consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by any other Person or any
Authority, or any expiration or termination of any applicable waiting period
under any Legal Requirement, required with respect to any Party or any party to
the Related Agreements in connection with (i) the execution and delivery of
this Agreement or any of the Related Agreements or (ii) the consummation of any
of the transactions provided for hereby or thereby.
"Contracts" shall have the meaning assigned to such term in the Occidental
Contribution Agreement.
"Contributed Assets" shall have the meaning assigned to the term "Assets" in
the Occidental Contribution Agreement.
"Encumbrance" shall mean any lien, charge, encumbrance, security interest,
title defect, option or any other restriction or third-party right.
"ERISA" shall mean the Employee Retirement Income Security Act, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Equistar Group" shall mean the Partnership, the Initial Partners, Lyondell,
Millennium and Millennium Petrochemicals.
"Filing" shall mean any filing with any Person or any Authority required with
respect to any Party in connection with (i) the execution and delivery of this
Agreement or any of the Related Agreements or (ii) the consummation of any of
the transactions provided for hereby or thereby.
"GAAP" shall have the meaning set forth in Section 2.1(e).
"Government License" shall have the meaning assigned to such term in the
Occidental Contribution Agreement.
"Group" shall mean the Equistar Group, the Occidental Group, the Lyondell Group
or the Millennium Group, as appropriate.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Initial Master Transaction Agreement" shall mean the Master Transaction
Agreement dated July 25, 1997, between Lyondell and Millennium, as amended.
"Initial Partners" shall mean Lyondell LP, Lyondell GP, Millennium LP and
Millennium GP.
"Joint Proxy Statement" shall mean the Joint Proxy Statement of Lyondell and
Millennium dated October 17, 1997.
A-2
35
"Knowledge" shall mean with respect to any Party the actual knowledge of (i)
any current plant manager, (ii) any current officer of such Party having
responsibilities with respect to an applicable Subject Business or the
transactions contemplated in this Agreement, (iii) in the case of Occidental,
any current officer of OCC, Oxy Petrochemicals or of an Occidental Partner
having responsibilities with respect to Occidental's Subject Business or the
transactions contemplated in this Agreement, and (iv) any current employee
reporting directly to an officer described in clause (ii) or (iii).
"Legal Requirement" shall mean any law, statute, rule, ordinance, decree,
regulation, requirement, order or judgment of any Authority including the terms
of any Government License.
"Lyondell" shall have the meaning set forth in the first paragraph of this
Agreement.
"Lyondell Asset Contribution Agreement" shall mean that certain Asset
Contribution Agreement dated December 1, 1997, to which Lyondell and the
Partnership are parties.
"Lyondell GP" shall mean Lyondell Petrochemical G.P. Inc., a Delaware
corporation and a wholly owned Subsidiary of Lyondell.
"Lyondell Group" shall mean Lyondell, Lyondell LP and Lyondell GP.
"Lyondell LP" shall mean Lyondell Petrochemical L.P. Inc., a Delaware
corporation and a wholly owned Subsidiary of Lyondell.
"Lyondell Note" shall mean that certain promissory note in the aggregate
principal amount of $345 million dated December 1, 1997 payable to the
Partnership by Lyondell LP.
"Material Adverse Effect" shall mean any adverse circumstance or consequence
that, individually or in the aggregate, has an effect that is material to the
financial condition, results of operations, assets or business of the
applicable Party or Subject Business (taken as a whole), as the case may be.
"Millennium" shall have the meaning set forth in the first paragraph of this
Agreement.
"Millennium Asset Contribution Agreement" shall mean that certain Asset
Contribution Agreement dated December 1, 1997, to which Millennium
Petrochemicals and the Partnership are parties.
"Millennium GP" shall mean Millennium GP LLC, a Delaware limited liability
company and an indirect, wholly owned Subsidiary of Millennium.
"Millennium Group" shall mean Millennium, Millennium Petrochemicals, Millennium
LP and Millennium GP.
"Millennium LP" shall mean Millennium LP LLC, a Delaware limited liability
company and an indirect, wholly owned Subsidiary of Millennium.
A-3
36
"Millennium Petrochemicals" shall have the meaning set forth in the third
WHEREAS clause of this Agreement.
"Occidental" shall have the meaning set forth in the first paragraph of this
Agreement.
"Occidental Contribution Agreement" shall mean that certain Agreement and Plan
of Merger and Asset Contribution between the Occidental Partners, Oxy
Petrochemicals and the Partnership to be executed and delivered at the Closing
in substantially the form attached hereto as Exhibit B.
"Occidental Assumed Debt" shall mean the Lease Intended for Security, dated
December 18, 1991, among OCC, the institutions listed on Schedule I thereto,
Norwest Bank Minnesota, National Association, as Agent and Chemical Bank and
the Bank of Nova Scotia, as Information Agents, and having an amount
outstanding as of the date of this Agreement of $205 million.
"Occidental Group" shall mean Occidental, OCC, Oxy CH, and the Occidental
Partners and, prior to the Closing, Oxy Petrochemicals.
"Occidental Partners" shall mean PDG Chemical, OCC Sub and Oxy CH Sub.
"OCC" shall have the meaning set forth in the fourth WHEREAS clause of this
Agreement.
"OCC Sub" shall have the meaning set forth in the fourth WHEREAS clause.
"Oxy CH" shall have the meaning set forth in the fourth WHEREAS clause of this
Agreement.
"Oxy CH Sub" shall have the meaning set forth in the fourth WHEREAS clause of
this Agreement.
"Oxy Petrochemicals" shall have the meaning set forth in Section 1.5(d).
"Parties" shall have the meaning set forth in the seventh WHEREAS clause of
this Agreement.
"Partnership" shall have the meaning set forth in the first paragraph of this
Agreement.
"Partnership Agreement" shall mean the Agreement of Limited Partnership of the
Partnership dated October 10, 1997.
"Partnership Governance Committee" shall mean the "Partnership Governance
Committee" as defined in the Partnership Agreement.
"PDG Chemical" shall have the meaning set forth in the fourth WHEREAS clause of
this Agreement.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization.
A-4
37
"Proceeding" shall mean any action, suit, claim or legal, administrative or
arbitration proceeding or governmental investigation to which any Party or an
Affiliate is a party.
"Related Agreements" shall mean the Tier 1 Related Agreements and the Tier 2
Related Agreements.
"Representatives" shall mean the "Representatives," as defined in the
Partnership Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 2.2.(e).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stockholders' Meetings" shall mean the special stockholders meetings of each
of Lyondell and Millennium held November 20, 1997.
"Strategic Plan" shall mean the Five-Year Strategic Plan adopted by the
Partnership Governance Committee, as amended and modified prior to the date
hereof pursuant to action of the Partnership Governance Committee, as set forth
in minutes of their meetings.
"Subject Business" shall mean (i) in the case of Occidental, the "Contributed
Business" as defined in the Occidental Contribution Agreement, including the
Contributed Assets and the Assumed Liabilities related thereto; (ii) in the
case of each of Lyondell and Millennium, their respective "Contributed
Businesses" as defined in their respective Asset Contribution Agreements dated
December 1, 1997; and (iii) in the case of the Partnership, the business of the
Partnership, which consists substantially of the Subject Business of Lyondell
and Millennium.
"Subsidiary" shall mean, with respect to any Party, any Person of which such
Party, either directly or indirectly, owns 50% or more of the equity or voting
interests, except, in the case of Lyondell, Lyondell-CITGO Refining Company
Ltd. and Equistar Chemicals, LP.
"Tier 1 Related Agreements" shall mean those agreements so designated on
Appendix B, forms of each of which (including forms of the exhibits and certain
of the schedules thereto current as of the dates indicated therein), are
attached hereto as Exhibits.
"Tier 2 Related Agreements" shall mean those agreements so designated on
Appendix B (including Appendix B-2), descriptions of certain terms of which are
included thereon.
"Unit" shall mean a unit representing a partnership interest in the
Partnership.
A-5
38
APPENDIX B
TO
MASTER TRANSACTION AGREEMENT
LIST OF RELATED AGREEMENTS
Tier 1 Related Agreements
1. Amended and Restated Agreement of Limited Partnership
2. Agreement and Plan of Merger and Asset Contribution among the
Occidental Partners, Oxy Petrochemicals and the Partnership
3. Amended and Restated Parent Agreement
4. Sales Agreement (Ethylene)
Tier 2 Related Agreements
1. Agreements the form of which is an exhibit to the Occidental
Agreement and Plan of Merger and Contribution.
2. Operating Agreement by and between the Partnership and OCC.
3. Tolling Processing Agreement by and between the Partnership
and OCC.
4. Amended and Restated Indemnity Agreement among OCC, PDG
Chemical, Oxy Petrochemicals, OCC Sub, Oxy CH Sub, Lyondell
GP, Lyondell LP, Millennium GP, Millennium LP and Millennium
America Inc., a Delaware corporation, amending and restating
the Indemnity Agreement, dated December 1, 1997.
5. Agreement between OCC and the Partnership obligating OCC to
provide a guarantee for the collection of $419,700,000 of
Partnership debt and obligating the Partnership to extend or
refinance such debt for a term at least equivalent to the
term of such guarantee.
6. Agreement between OCC and the Partnership obligating the
Partnership to prepay or restructure the Occidental Assumed
Debt within an agreed period of time.
7. Promissory Note for $419,700,000 of the Partnership payable
to Oxy CH Sub.
8. Promissory Note for $75 million of the Partnership payable to
Millennium LP.
B-1
39
9. Agreement for Assumption of Lease Intended for Security dated
December 18, 1991 ($205 million).
10. Assignment and Assumption Agreement related to Lease Intended
for Security dated March 28,1994 (Pitney Bowes).
11. Agreement regarding termination of Lyondell guaranty of
certain Partnership railcar leases.
12. Sublease by OCC to the Partnership related to 1990 railcar
lease.
13. Sublease by Oxy Petrochemicals to the Partnership related to
1995 railcar lease.
14. Tax Indemnity Agreement between OCC and the Partnership
related to the 1990 railcar sublease.
15. Tax Indemnity Agreement between Oxy Petrochemicals and the
Partnership related to the 1995 railcar sublease.
16. Master Arbitration Amendment to Related Agreements.
17. First Amendment to Lyondell Asset Contribution Agreement.
18. First Amendment to Millennium Asset Contribution Agreement.
19. Transition Services Agreement between the Partnership and
OCC.
20. Pipeline Acquisition Agreement between OCC and the
Partnership related to the Cyclohexane pipeline.
B-2