Exhibit 10.1
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SECURITIES PURCHASE AGREEMENT
BETWEEN
LYONDELL CHEMICAL COMPANY
AND
OCCIDENTAL CHEMICAL HOLDING CORPORATION
July 8, 2002
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TABLE OF CONTENTS
Page
SECTION 1 SALE OF SECURITIES; PURCHASE PRICE................................. 1
1.1 Sale of Securities on Closing Date............................. 1
1.2 Purchase Price................................................. 2
1.3 Contingent Payment Amount...................................... 2
SECTION 2 CLOSING DATE, PAYMENT AND DELIVERY................................. 2
2.1 Closing Date................................................... 2
2.2 Payment and Delivery........................................... 2
2.3 Agreements to be Entered Into at Closing....................... 3
2.4 Payments of Cash and Delivery of Certificates.................. 3
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 3
3.1 Organization, Good Standing and Power.......................... 3
3.2 Authorization and Validity of Agreements....................... 3
3.3 Lack of Conflicts.............................................. 4
3.4 Certain Fees................................................... 4
3.5 SEC Reports; Financial Statements.............................. 4
3.6 Absence of Certain Changes..................................... 5
3.7 Capitalization................................................. 5
3.8 Issuance of the Company Securities............................. 6
3.9 Undisclosed Liabilities........................................ 6
3.10 No Defaults.................................................... 6
3.11 Use of Proceeds................................................ 6
3.12 Exemption from Section 203..................................... 6
3.13 Financial Condition............................................ 7
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................... 7
4.1 Organization, Good Standing and Power.......................... 7
4.2 Authorization and Validity of Agreements....................... 7
4.3 Lack of Conflicts.............................................. 8
4.4 Certain Fees................................................... 8
4.5 Information Supplied for Proxy Statement....................... 8
4.6 Investment..................................................... 8
4.7 Investigation; No General Solicitation......................... 9
4.8 Sophistication and Financial Condition of Stockholder.......... 9
4.9 Status of the Company Securities............................... 9
4.10 No Ownership of the Company Securities......................... 9
4.11 Governmental Consents.......................................... 10
SECTION 5 ADDITIONAL AGREEMENTS.............................................. 10
5.1 Conduct of the Company Business Pending the Closing Date....... 10
5.2 Further Actions................................................ 11
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5.3 Notifications................................................................ 12
5.4 The Company Proxy Statement; Stockholders' Meeting; Effectiveness of
Amendment.................................................................... 12
5.5 No Inconsistent Action....................................................... 12
5.6 Listing of Shares of Original Common Stock................................... 12
5.7 Reservation of Shares........................................................ 13
5.8 Alternate Cash Consideration................................................. 13
SECTION 6 CONDITIONS TO CLOSING............................................................ 14
6.1 Conditions Precedent to Obligations of the Parties........................... 14
6.2 Conditions Precedent to Obligations of the Company........................... 15
6.3 Conditions Precedent to Obligations of the Purchaser......................... 15
SECTION 7 TERMINATION AND WAIVER........................................................... 16
7.1 General...................................................................... 16
7.2 Effect of Termination........................................................ 17
SECTION 8 SURVIVAL AND INDEMNIFICATION..................................................... 17
8.1 Survival..................................................................... 17
8.2 Indemnification by the Purchaser............................................. 18
8.3 Indemnification by the Company............................................... 18
8.4 Mitigation; Limitation on Consequential, Punitive and Exemplary Damages...... 19
8.5 Procedures................................................................... 19
8.6 Termination of Indemnification............................................... 19
SECTION 9 MISCELLANEOUS.................................................................... 20
9.1 Successors and Assigns....................................................... 20
9.2 Benefits of Agreement Restricted to Parties.................................. 20
9.3 Notices...................................................................... 20
9.4 Severability................................................................. 22
9.5 Press Releases............................................................... 22
9.6 Confidentiality Agreement.................................................... 22
9.7 Entire Agreement............................................................. 23
9.8 Construction................................................................. 23
9.9 Counterparts................................................................. 23
9.10 Governing Law................................................................ 23
9.11 Transaction Costs............................................................ 23
9.12 Amendment.................................................................... 23
9.13 Jurisdiction; Consent to Service of Process; Waiver.......................... 24
9.14 Waiver of Jury Trial......................................................... 24
9.15 Further Assurances........................................................... 24
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APPENDIX
Appendix A Definitions
SCHEDULES
Schedule 3 Exceptions to Representations and Warranties of the Company
Schedule 4 Exceptions to Representations and Warranties of Occidental
Schedule 6.2(e) Company Consents
Schedule 6.3(d) Occidental Consents
EXHIBITS
Exhibit A Form of Warrant
Exhibit B Form of Stockholders Agreement
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Amendment to Restated Certificate of Incorporation
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated as of July 8,
2002, is entered into by and between Lyondell Chemical Company, a Delaware
corporation (the "Company"), and Occidental Chemical Holding Corporation, a
California corporation (the "Purchaser").
Definitions of capitalized terms used in this Agreement are set forth in
Appendix A.
RECITALS
WHEREAS, the Purchaser desires to purchase from the Company, and the
Company desires to issue and deliver to the Purchaser, upon the terms and
conditions set forth herein, the Company Securities;
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
SALE OF SECURITIES; PURCHASE PRICE
1.1 Sale of Securities on Closing Date.
(a) At Closing, the Company shall issue and sell, assign, transfer and
deliver to the Purchaser, and the Purchaser shall purchase from the Company,
(i) such number of shares of Series B Common Stock as shall be determined in
accordance with Section 1.1(b) and (ii) 5,000,000 Warrants substantially in
the form of Warrant set forth in Exhibit A. Each such Warrant shall entitle
the holder to purchase one share of Original Common Stock (subject to the
Company's Net Payment Right set forth therein) at an exercise price of $25.00
per share.
(b) The number of shares of Series B Common Stock shall be determined as
follows (rounded to the nearest whole share); if the 20-Day Average Price of
Original Common Stock at the time of Closing:
(i) is greater than or equal to $17.10, the number of shares shall
be 30 million.
(ii) is less than $17.10 and greater than $15.10, the number of
shares shall be
32 million - (2 million x (20-Day Average Price - $15.10) );
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($17.10 - $15.10)
(iii) is less than or equal to $15.10 and greater than or equal to
$14.10, the number of shares shall be 32 million;
(iv) is less than $14.10 and greater than $13.10, the number of
shares shall be
34 million - (2 million x (20-Day Average Price - $13.10) );or
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($14.10 - $13.10)
(v) is less than or equal to $13.10, the number of shares shall
be 34 million.
1.2 Purchase Price. In consideration for the Company Securities to be
issued and sold on the Closing Date pursuant to Section 1.1 and the right to
receive a Contingent Payment Amount as described in Section 1.3, the Purchaser
shall pay to the Company on the Closing Date $440,000,000.
1.3 Contingent Payment Amount. The Company shall pay to the Purchaser a
contingent payment amount (a "Contingent Payment Amount") with respect to each
distribution, excluding distributions of the proceeds from asset sales and sales
of equity in the Partnership, by the Partnership to its partners that (i)
relates to the period from January 1, 2002 to December 31, 2003 and (ii) is made
by the Partnership after the Closing Date but prior to May 1, 2004 (a
"Partnership Distribution") in an amount of cash equal to the amount of each
such Partnership Distribution paid with respect to 7,375 Units; provided,
however, that the Company may, at its sole discretion, instead pay all or any
part of such amount by the issuance, assignment, transfer and delivery of such
number of shares of its Original Common Stock or Series B Common Stock, at its
option, as is equal in value to the portion of the Contingent Payment Amount to
be so satisfied with Contingent Shares. Each such share so issued, assigned,
transferred and delivered shall be valued for this purpose at the average of the
Daily Prices (calculated to the nearest thousandth) for the 20 Business Day
period beginning 10 Business Days before the date on which the related
Partnership Distribution is made and ending 9 Business Days thereafter. Each
Contingent Payment Amount shall be paid 15 Business Days after the Company
receives the related Partnership Distribution. Notwithstanding anything above to
the contrary, the aggregate value of all Contingent Payment Amounts shall not
exceed $35 million; for this purpose, payments made in stock shall be valued as
set forth above.
SECTION 2
CLOSING DATE, PAYMENT AND DELIVERY
2.1 Closing Date. The Closing shall take place at the offices of Xxxxx
Xxxxx L.L.P., Xxxxxxx, Xxxxx 00000, at 10:00 a.m. on (i) August 30, 2002, or
(ii) if all conditions set forth in Sections 6.1, 6.2 and 6.3, other than
conditions to be satisfied at Closing, have not been satisfied or waived by that
date, on the third Business Day after the first day that all of such conditions
have been satisfied or waived or (iii) on such other date as may be agreed to in
writing by the Parties (the "Closing Date").
2.2 Payment and Delivery. At the Closing, the Purchaser shall transmit the
aggregate purchase price set forth in Section 1.2, and the Company shall issue
and deliver to the Purchaser certificates representing the Company Securities to
be issued on the Closing Date.
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2.3 Agreements to be Entered Into at Closing. At Closing, (a) the Company,
Occidental and the Purchaser shall enter into a stockholders agreement in
substantially the form set forth in Exhibit B (as executed and delivered
pursuant hereto, the "Stockholder Agreement") and (b) the Company and the
Purchaser shall enter into a registration rights agreement in substantially the
form set forth in Exhibit C (as executed and delivered pursuant hereto, the
"Registration Rights Agreement").
2.4 Payments of Cash and Delivery of Certificates. Any funds required to
be paid hereunder shall be made by wire transfer of immediately available funds
to an account designated by the intended recipient of such funds in writing. Any
stock certificate required to be delivered hereunder shall be duly registered in
the name of the Purchaser and shall bear the appropriate legends as set forth in
Section 4.5 of the Stockholder Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on Schedule 3, the Company represents and warrants
to the Purchaser that:
3.1 Organization, Good Standing and Power. The Company (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 and to conduct its business as such is now being
conducted, (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
business conducted 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 Company Material
Adverse Effect and (iii) has, and in the case of the Related Securities
Agreements to be executed by it at the Closing, will have, all requisite
corporate power and authority to enter into this Agreement and, as applicable,
the Related Securities Agreements to which it is or will be a party and to
perform its obligations hereunder and thereunder.
3.2 Authorization and Validity of Agreements. Assuming the approval of the
Company's stockholders referred to in Section 6.2(f):
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized and approved by all necessary corporate
action on its part. This Agreement has been duly and validly executed and
delivered by the Company 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.
(b) The execution, delivery and performance by the Company of the
Related Securities 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
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approved by all necessary corporate action on its part. At the Closing,
each of the Related Securities Agreements to which the Company will be a
party will be duly and validly executed and delivered by it and will be
upon execution and delivery 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.
3.3 Lack of Conflicts. The execution, delivery and, assuming (i) the
effectiveness of the Amendment, (ii) satisfaction of the condition in Section
6.2(f) and (iii) receipt of the approval contemplated by Section 5.6 and of the
Consents contemplated by Schedule 6.2(d), performance by the Company of this
Agreement and the Related Securities 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 (w) violate (with or without
the giving of notice or the lapse of time or both) any Legal Requirement
applicable to it or any of its Subsidiaries, other than those that would not be
reasonably likely to have a Company Material Adverse Effect, (x) 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 any of its Subsidiaries, (y)
result in the creation of any Encumbrance upon any of its assets, other than
those arising under this Agreement or any of the Related Securities Agreements,
or those that would not be reasonably likely to have a Company Material Adverse
Effect or (z) 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 its Subsidiaries are bound, except for violations,
conflicts, breaches, terminations and defaults that would not be reasonably
likely to have a Company Material Adverse Effect.
3.4 Certain Fees. Neither the Company 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.
3.5 SEC Reports; Financial Statements.
(a) The Company has filed all forms, reports and documents required to
be filed by it with the SEC since December 31, 2001 (the "Company SEC
Reports"). The Company 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 the Company SEC Reports, as of the date it was 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.
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(b) The financial statements (including any notes thereto) contained
in the Company 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 in all material respects the consolidated (or combined, as
applicable) financial position, results of operations and changes in
stockholders' equity and cash flows of the Company and its consolidated
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).
3.6 Absence of Certain Changes. Except as described in the Company SEC
Reports filed prior to the date of this Agreement, since December 31, 2001, (i)
the Company and its Affiliates (including, for this purpose, the Partnership)
have not incurred any material liabilities or obligations, fixed, contingent,
accrued or otherwise, that have had or are reasonably likely to have a Company
Material Adverse Effect and (ii) no event, occurrence or other matter has
occurred that has or is reasonably likely to have a Company Material Adverse
Effect.
3.7 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of
the Company consists of 250,000,000 shares of Original Common Stock, of
which 125,844,920 were issued and outstanding as of July 1, 2002, and
80,000,000 shares of preferred stock, $.01 par value per share, no shares
of which are issued and outstanding as of the date hereof. As of July 2,
the Company had 9,631,767 shares reserved for issuance upon exercise of
outstanding options to purchase shares of Original Common Stock and
2,447,922 performance shares have been granted and were outstanding under
its benefit plans. Except as described in this Agreement, as of the date of
this Agreement, there are no other options, warrants, conversion privileges
or other contractual rights presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of the Company's capital stock.
The Company has no outstanding agreements granting registration rights to
any Person.
(b) The Board of Directors at a meeting duly called and held on May 2,
2002, has adopted resolutions that take all necessary action to provide
that, under the Company Rights Agreement, (i) Occidental shall not be an
"Acquiring Person" so long as Occidental's "Beneficial Ownership" of the
Company's "common stock" does not exceed the Occidental Rights Trigger
Amount, (ii) no "Stock Acquisition Date" shall occur as a result of the
execution, delivery and performance of this Agreement, the Warrant or the
Stockholder Agreement in accordance with their terms and (iii) no
"Distribution Date" shall occur as a result of the announcement of or the
execution of this Agreement, the Warrant or the Stockholder Agreement. As
used in this Section 3.7(b), the terms "Acquiring Person," "Beneficial
Ownership," "Distribution Date" and "Stock Acquisition Date" shall have the
meaning ascribed to such terms in the Company Rights Agreement and the
Company's "common stock" shall include shares of Original Common Stock and
Series B Common Stock.
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3.8 Issuance of the Company Securities. Subject to (i) obtaining the
approval of its stockholders as contemplated by Section 6.2(f) and (ii) the
effectiveness of the Amendment, all corporate action on the part of the Company,
its directors and stockholders necessary for the issuance and delivery of the
Subject Securities has been taken. Upon the issuance and delivery of the Initial
Shares as contemplated by this Agreement, the Initial Shares will be validly
issued, fully paid and nonassessable. Upon the issuance and delivery of any
Warrant Shares or any Net Payment Shares issued upon exercise of a Warrant in
accordance with the terms of the Warrant, such Warrant Shares or Net Payment
Shares, as the case may be, will be validly issued, fully paid and
nonassessable. Upon the issuance and delivery of the PIK Shares in accordance
with the terms of the Series B Common Stock, the PIK Shares will be validly
issued, fully paid and nonassessable. Upon the issuance and delivery of
Conversion Shares pursuant to the conversion of shares of Series B Common Stock
in accordance with the terms of the Series B Common Stock, such Conversion
Shares will be validly issued, fully paid and nonassessable. Upon the issuance
and delivery of Contingent Shares, such Contingent Shares shall be validly
issued, fully paid and nonassessable. Neither the issuance and sale or the
issuance and delivery, as applicable, of any of the Subject Securities will give
rise to any preemptive rights or rights of first refusal on behalf of any
Person. Subject to effectiveness of the Amendment, (i) 42,000,000 shares of
Series B Common Stock have been reserved for issuance as Initial Shares, PIK
Shares, Contingent Shares or Net Payment Shares and (ii) 42,000,000 shares of
Original Common Stock have been reserved for issuance as Warrant Shares,
Conversion Shares, Contingent Shares or Net Payment Shares.
3.9 Undisclosed Liabilities. To the Knowledge of the Company, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature, whether or not fixed, accrued, contingent or otherwise, except
liabilities and obligations that (i) are disclosed in the Company SEC Reports or
(ii) do not or are not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
3.10 No Defaults. Neither the Company nor any of its Subsidiaries is, or
with the giving of notice or lapse of time or both would be, in violation of or
in default under its charter or by-laws or similar governing or organizational
documents or any contract, indenture, lease, mortgage, Government License or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which it or any of them or any of their respective properties is
bound, except for violations and defaults that, individually or in the
aggregate, would not be reasonably likely to have a Company Material Adverse
Effect.
3.11 Use of Proceeds. The Company will use the proceeds received hereunder
to satisfy its obligations under the Partner Sub Purchase Agreement.
3.12 Exemption from Section 203. The Board of Directors, at a meeting duly
called and held on May 2, 2002, has adopted resolutions that are still in full
force and effect as of the date hereof, exempting this Agreement and the
transactions contemplated hereby, from the restrictions on "business
combinations" of Section 203 of the Delaware General Corporation Law.
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3.13 Financial Condition. (i) The Company is not in default under Sections
5.11, 5.12, 5.13 and 6.1(g) of its Credit Agreement dated as of July 23, 1998,
(ii) the Company has not defaulted on any obligation to pay principal or
interest under its Debt Documents and (iii) the Company is not insolvent nor the
subject of a Bankruptcy Proceeding.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Except as set forth on Schedule 4, the Purchaser represents and
warrants to the Company that:
4.1 Organization, Good Standing and Power. The Purchaser (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 to conduct its business as
such is now being conducted, (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 business conducted 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
an Occidental Material Adverse Effect and (iii) has, and in the case of the
Related Securities Agreements to be executed by it at the Closing, will have,
all requisite corporate power and authority to enter into this Agreement and, as
applicable, the Related Securities Agreements to which it is or will be a party
and to perform its obligations hereunder and thereunder.
4.2 Authorization and Validity of Agreements.
(a) The execution, delivery and performance by the Purchaser of this
Agreement and the consummation by each Occidental Party of the transactions
contemplated hereby have been duly authorized and approved by all necessary
corporate or similar action on their part. This Agreement has been duly and
validly executed and delivered by the Purchaser and is its legal, valid and
binding obligation, enforceable against the Purchaser 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.
(b) The execution, delivery and performance by each Occidental Party
of the Related Securities 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 corporate action
on its part. At the Closing, each of the Related Securities Agreements to
which an Occidental Party will be a party will be duly and validly executed
and delivered by each Occidental Party and will be upon execution and
delivery its legal, valid and binding obligation, enforceable against each
Occidental Party 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.
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4.3 Lack of Conflicts. The execution, delivery and, assuming receipt of
the Consents contemplated by Schedule 6.3(d), performance by the Purchaser of
this Agreement and by each Occidental Party of the Related Securities Agreements
to which it is or will be a party and the consummation by each such Occidental
Party of the transactions contemplated hereby and thereby does not (i) violate
(with or without the giving of notice or the lapse of time or both) any Legal
Requirement applicable to it or any of its Subsidiaries, other than those that
would not be reasonably likely to have an Occidental Material Adverse Effect,
(ii) conflict with, or result in the breach of, any provision of the charter or
by-laws or similar governing or organizational documents of such Occidental
Party or any of its Subsidiaries, (iii) result in the creation of any
Encumbrance upon any of its assets, other than those arising under this
Agreement or any of the Related Securities Agreements, or those that would not
be reasonably likely to have an Occidental Material Adverse Effect 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 its Subsidiaries are bound, except for violations, conflicts, breaches,
terminations and defaults that would not be reasonably likely to have an
Occidental Material Adverse Effect.
4.4 Certain Fees. No Occidental Party nor any Affiliates of any Occidental
Party nor any of its officers, directors or employees, on behalf of any
Occidental Party 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.
4.5 Information Supplied for Proxy Statement. None of the information
supplied or to be supplied by Occidental or its Affiliates in writing
specifically for inclusion in the Proxy Statement to be filed with the SEC by
the Company in connection with the Company stockholder meeting to be held in
connection with this Agreement will, at the date mailed to the Company's
stockholders, or (except to the extent amended or supplemented as described in
the next sentence) at the time of such meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior to
the time of such meeting, any event with respect to Occidental, or with respect
to other information supplied by Occidental in writing specifically for
inclusion in the Proxy Statement, shall occur which is required to be described
in an amendment of, or a supplement to, the Proxy Statement, Occidental will
promptly notify the Company of such event.
4.6 Investment. The Purchaser acknowledges and agrees that the Subject
Securities will be subject to the Stockholder Agreement and, among other things,
will bear the legends specified therein. The Purchaser is acquiring the Subject
Securities for investment for its own account, not as a nominee or agent, and
not with a view to, or for resale in connection with, any distribution thereof
in violation of applicable law, and has not offered or sold any portion of the
Subject Securities to be acquired by it. The Purchaser acknowledges and
understands that investment in the Subject Securities is subject to a high
degree of risk and that it must bear the economic risk of its investment for an
indefinite period of time because the Subject Securities must be held
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indefinitely (i) until subsequently registered under the Securities Act and
applicable state and other securities laws or (ii) unless an exemption from
registration is available which depends upon, among other things, the bona fide
nature of the Purchaser's investment intent and the accuracy of the Purchaser's
representations as expressed herein. The Purchaser understands that any transfer
agent of the Company will be issued stop transfer instructions with respect to
the Subject Securities unless such transfer is subsequently registered under the
Securities Act and applicable state and other securities laws or unless an
exemption from such registration is available. The Purchaser was not organized
for the purpose of acquiring the Subject Securities.
4.7 Investigation; No General Solicitation. The Purchaser has received a
copy of the Company SEC Reports. The Purchaser has had a reasonable opportunity
to ask questions relating to and otherwise discuss the terms and conditions of
the offering and the other information set forth in the Company SEC Reports and
this Agreement and the Company's business, management and financial affairs with
the Company's management and other parties, and the Purchaser has received
satisfactory responses to its inquiries. To the extent necessary, the Purchaser
has retained, at the expense of the Purchaser, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and
consequences of this Agreement and its purchase of the Subject Securities
hereunder. The Purchaser has relied only on its own independent investigation
and on the Company's representations and warranties in this Agreement and the
Related Securities Agreements before deciding to acquire the Subject Securities.
4.8 Sophistication and Financial Condition of Stockholder. The Purchaser
is an experienced and sophisticated investor and has such knowledge and
experience in financial and business matters or its professional advisors have
such knowledge and experience in financial and business matters as are necessary
to evaluate the merits and risks of an investment in the Subject Securities and
to evaluate the merits and risks of its investment and protect its own interest
in connection with the acquisition of a Subject Security. The Purchaser is able
to bear the economic risk of this investment regarding the Company, is able to
hold the Subject Securities indefinitely and has a sufficient net worth to
sustain a loss of its entire investment in the Company in the event such loss
should occur.
4.9 Status of the Company Securities. The Purchaser has been informed by
the Company that the Subject Securities have not been and will not be registered
under the Securities Act or under any state securities laws, including Section
25102(f) of the California Corporations Code, except as specifically provided in
the Registration Rights Agreement, and are being offered and sold in reliance
upon federal and state exemptions for transactions not involving any public
offering. The Purchaser acknowledges that any certificate representing Subject
Securities will bear the legend or legends specified by Section 4.5 of the
Stockholder Agreement.
4.10 No Ownership of the Company Securities. Neither Occidental nor any of
its Affiliates beneficially owns any shares of capital stock of the Company nor
any securities convertible into or otherwise exercisable to acquire capital
stock of the Company, except insofar as this Agreement shall be deemed to confer
any such ownership.
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4.11 Governmental Consents. Except as may be required under the HSR Act and
such filings as may be required to be made with the SEC, or under state
securities or blue sky laws, no consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of the Purchaser is required in connection with the valid execution and delivery
of this Agreement, the acquisition of the Restricted Securities, or the
consummation of any other transaction contemplated hereby.
SECTION 5
ADDITIONAL AGREEMENTS
5.1 Conduct of the Company Business Pending the Closing Date. The Company
agrees that, except as required or specifically contemplated by this Agreement
or otherwise consented to or approved in writing by the Purchaser, during the
period commencing on the date hereof and ending on the Closing Date, it shall
and shall cause its Affiliates to:
(a) use commercially reasonable efforts to conduct its or their
operations in all material respects only in the usual, regular and ordinary
manner consistent with past practice, except for such matters, that
individually and in the aggregate, do not, and are not reasonably likely
to, have a Company Material Adverse Effect;
(b) not (i) issue any shares of capital stock of the Company, except
(A) pursuant to the exercise of options, warrants, conversion rights and
other contractual rights existing on the date of this Agreement, (B)
pursuant to the exercise of awards granted after the date of this Agreement
pursuant to Section 5.1(b)(ii) or (C) pursuant to any acquisition that is
permitted under Section 5.1(d) below or (ii) grant, confer or award any
option, warrant, conversion right or other right to acquire any shares of
capital stock of the Company, except for grants and awards to directors,
officers and employees of the Company;
(c) not sell, lease or otherwise dispose of any of its or their assets
(including capital stock of Subsidiaries), with a value, individually or in
the aggregate, in excess of $500 million, except for (i) sales of surplus
or obsolete equipment, (ii) sales of other assets in the ordinary course of
business, (iii) sales, leases or other transfers between the Company and
its Subsidiaries or between those Subsidiaries or (iv) the sale or other
disposition of accounts receivable pursuant to one or more accounts
receivable securitization facilities or other arrangements to a similar
effect;
(d) not acquire or agree to acquire by merging or consolidating with
or, by purchasing an equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any Person, with a
value, individually or in the aggregate, in excess of $500 million;
(e) with respect to the Company, except for the payment of regular
quarterly dividends on the Original Common Stock not to exceed $.225 per
share with customary record and payment dates, not declare, set aside or
pay any dividend or make any other distribution or payment with respect to
any shares of its capital stock;
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(f) with respect to the Company, not split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for, shares
of its capital stock;
(g) after obtaining Knowledge thereof, give notice to the Purchaser of
any claim or litigation (threatened or instituted) or any other event or
occurrence which could reasonably be expected to have a Company Material
Adverse Effect;
(h) not take any action that is reasonably likely to result in its
representations and warranties in Section 3 hereof, or in any of the
Related Securities Agreements, not being true in all material respects as
of the Closing Date; and
(i) not agree, whether in writing or otherwise, to take any action it
has agreed pursuant to this Section 5.1 not to take.
5.2 Further Actions.
(a) Each Party shall 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.
(b) Each Party shall act in good faith and 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 Securities Agreements to be entered into by such Party at
Closing, and to confirm that such transactions have been accomplished,
including using all commercially reasonable efforts to obtain and effect
prior to the Closing Date all Consents and Filings necessary to consummate
the transactions contemplated hereby and by the Related Securities
Agreements. Each Party shall furnish to the other Parties and their
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) Each Party shall keep the other Parties fully informed from time
to time as any such other Party shall reasonably request as to the status
of all Consents being sought by such Party pursuant to Section 5.2(b).
(d) Each Party shall furnish to the other Parties such information,
cooperation and assistance as reasonably may be requested in connection
with the foregoing.
(e) Each Party shall negotiate and otherwise act in good faith to
complete, execute and deliver the Related Securities Agreements at the
Closing and to effect the Closing at the earliest practicable date.
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(f) None of the provisions of this Section 5.2 shall under any
circumstances require the Parties or their respective Affiliates to (i) pay
any consideration other than legal fees and other customary expenses, (ii)
surrender, modify or amend in any respect any contract, lease, mortgage or
other agreement or instrument (including this Agreement), (iii) hold
separately (in trust or otherwise), divest itself of, or otherwise
rearrange the composition of, any of its assets, (iv) agree to any
limitations on its freedom of action with respect to future acquisitions of
assets or securities or with respect to any existing or future business or
activities or on the enjoyment of the full rights of ownership, possession
and use of any asset or security it now owns or hereafter acquires or (v)
agree to any of the foregoing or any other conditions or requirements of
any Governmental Authority or other Person, in each case to the extent that
doing so would be adverse or burdensome to such Person in any material
respect.
5.3 Notifications. Each Party shall notify the other Parties and keep each
of 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; and (ii) any fact or
circumstance of which such Party has Knowledge that indicates that any condition
to Closing is reasonably likely not to be satisfied in a timely fashion.
5.4 The Company Proxy Statement; Stockholders' Meeting; Effectiveness of
Amendment. The Company prepared and filed with the SEC the Proxy Statement in
preliminary form on June 11, 2002. The Company shall prepare, file with the SEC
and mail to its stockholders the definitive Proxy Statement as promptly as
practicable. The Company shall (a) cause to be considered at a special meeting
of stockholders that shall be held as promptly as practicable after the date
hereof and shall be called for the purpose of voting upon an amendment of its
Restated Certificate of Incorporation, as heretofore amended, in substantially
the form set forth in Exhibit D (as effected, the "Amendment"), and the issuance
of the Company Securities as contemplated hereby, (b) subject to the fiduciary
obligations of the Board of Directors under applicable law, through its Board of
Directors, recommend to its stockholders approval of such matters and not
rescind such recommendation, (c) use commercially reasonable efforts to cause
the Proxy Statement to be mailed to its stockholders at the earliest practicable
date, (d) use commercially reasonable efforts to obtain approval of such matters
by its stockholders and (e) upon that approval, take all steps necessary to
ensure the effectiveness of the Amendment and return a certified copy thereof
from the office of the Secretary of State of Delaware as soon thereafter as
practicable.
5.5 No Inconsistent Action. Neither Party shall take any material action
inconsistent with its obligations under this Agreement or which could materially
hinder or delay the consummation of the Closing; provided, however, that any
action that may be taken in accordance with Section 5.1 shall not be deemed to
violate this Section 5.5.
5.6 Listing of Shares of Original Common Stock. The Company shall promptly
prepare and submit to the New York Stock Exchange, Inc. a listing application
covering the shares of Original Common Stock issuable in connection with the
transactions contemplated hereby and shall use reasonable best efforts to
obtain, prior to Closing, approval for the listing of such shares, subject to
official notice of issuance.
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5.7 Reservation of Shares. After the Closing, the Company shall, from time
to time, reserve such additional shares of Series B Common Stock, Original
Common Stock or both, as it deems reasonably necessary to accommodate the
issuance of Subject Securities as contemplated by this Agreement or the Related
Securities Agreements.
5.8 Alternate Cash Consideration.
(a) In the event the Purchaser or its Affiliates become obligated to
pay the Alternate Cash Consideration pursuant to Section 6.9(e) of the
Partner Sub Purchase Agreement (and the Alternate Cash Consideration is to
be based on the value of 5.4 million shares of Original Common Stock), then
the Purchaser may, provided that it notifies the Company of its election to
do so promptly after such payment obligation arises, pay to the Company
(i) if the Purchaser or its Affiliates beneficially own,
directly or indirectly, 5.4 million or more shares of Common Stock on
the date such payment obligation arises, an amount equal to the Sale
Proceeds of the first 5.4 million shares of Common Stock sold by the
Purchaser or its Affiliates after such date; or
(ii) if the Purchaser or its Affiliates beneficially own,
directly or indirectly, fewer than 5.4 million shares of Common Stock
on such date, an amount equal to (x) the Sale Proceeds of all such
shares so owned on such date, plus (y) the Sale Proceeds received by
the Purchaser or its Affiliates from having sold that number of shares
most recently sold by them that is equal to (a) 5.4 million shares,
minus (b) the number of shares held by them on such date.
(b) In lieu of receiving the Alternate Cash Consideration as a result
of Sale Proceeds as described in Section 5.8(a), the Company may, by
written notice delivered promptly after the obligation to pay the Alternate
Cash Consideration arises, elect to receive from the Purchaser,
(i) if the Purchaser or its Affiliates beneficially own, directly
or indirectly, 5.4 million or more shares of Common Stock on the date
such cash-payment obligation arises, up to 5.4 million shares of
Common Stock, it being understood that if the Company elects to
receive less than 5.4 million shares of Common Stock so owned on such
date, then the Purchaser shall deliver to the Company (x) such number
of shares as the Company elects to receive, plus (y) an amount equal
to the Sale Proceeds of the first shares sold by the Purchaser or its
Affiliates after such date that is equal in number to (a) 5.4 million,
minus (b) the number of shares received by the Company; or
(ii) if the Purchaser or its Affiliates beneficially own,
directly or indirectly, fewer than 5.4 million shares of Common Stock
on such date, up to all such shares owned on such date, it being
understood that the Purchaser shall
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deliver to the Company (x) such number of shares as the Company elects
to receive, plus (y) an amount equal to the Sale Proceeds of all such
shares beneficially owned, directly or indirectly, by the Purchaser on
such date after subtracting the number of shares received by the
Company, plus (z) the Sale Proceeds received by the Purchaser or its
Affiliates from having sold that number of shares most recently sold
by them that is equal to (a) 5.4 million shares, minus (b) the number
of shares held by them on such date.
(c) The Purchaser shall make any cash payment described in Section
5.8(a) reasonably promptly after receipt of the Sale Proceeds, or, if the
Company has elected to receive all or part of the Make Whole Payment in
shares as described in Section 5.8(b), the Purchaser shall deliver those
shares (and Sale Proceeds if applicable) reasonably promptly after the
Company notifies the Purchaser of the Company's election to receive those
shares (and Sale Proceeds if applicable).
(d) To the extent that this Section 5.8 contemplates that the
Purchaser will satisfy its obligation to pay the Company the Make Whole
Amount with Sale Proceeds of shares owned, directly or indirectly, on the
date of such event, Purchaser or its Affiliates shall sell such shares as
promptly as practicable. Any such sales of shares made after the date of
such event shall be made in such manner as may be directed by the Company,
and the Purchaser and its Affiliates shall cooperate with the Company
regarding any such sales in an effort to maximize the Sale Proceeds. The
Purchaser or its Affiliates shall provide such documentation as is
reasonably required by the Company to support that they have complied with
their obligations under this Section 5.8(d).
SECTION 6
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of the 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 Legal Requirement of any Authority shall be
in effect which materially restrains, enjoins or otherwise prohibits (i)
the transactions contemplated hereby; or (ii) the ownership by the
Purchaser (including enjoyment of any rights relating thereto) of the
Company Securities at and after the Closing; and no Proceeding seeking any
such Legal Requirement shall be pending; provided, that before any
determination is made to the effect that this condition has not been
satisfied, each Party shall use commercially reasonable efforts to have
such Legal Requirement lifted, vacated or dismissed.
(b) HSR Act. The waiting period applicable to the Closing under the
HSR Act shall have expired or been terminated without the imposition of any
condition or restriction on such expiration or termination.
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6.2 Conditions Precedent to Obligations of the Company. The obligations of
the Company under this Agreement are subject to the satisfaction (or written
waiver by the Company) 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 the Company, all representations and warranties of the
Purchaser contained in this Agreement and the Related Securities Agreements
that contain qualifications and exceptions relating to materiality or to an
Occidental Material Adverse Effect shall be true and correct on and as of
the Closing Date, and all other representations and warranties of the
Purchaser contained in such agreements shall be true and correct in all
material respects as of the Closing Date, in each case with the same force
and effect as though such representations and warranties had been made on
and as of the Closing Date.
(b) Performance of Agreements. The Purchaser shall in all material
respects have performed and complied with all obligations and agreements
contained in this Agreement and each of its Affiliates shall have executed
all agreements and documents (including the Related Securities 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 an Occidental Material Adverse Change.
(d) Third Party Consents. All Consents of any third party listed on
Schedule 6.2(d) shall have been obtained.
(e) Officer's Certificate. The Company shall have received a
certificate, dated the Closing Date, signed by the President or a Vice
President of the Purchaser, to the effect that, to the knowledge of such
officer, the conditions specified in the above paragraphs have been
fulfilled.
(f) Stockholder Approval. The stockholders of the Company shall have
duly approved the Amendment and the issuance of the Subject Securities.
(g) Partner Sub Purchase Agreement. The Company is in a position to
use the proceeds of the sale of its securities hereunder as contemplated by
Section 3.11 and all conditions to closing the Partner Sub Purchase
Agreement shall have been satisfied or waived or shall be capable of
satisfaction not later than two Business Days after the Closing Date.
6.3 Conditions Precedent to Obligations of the Purchaser. The obligations
of the Purchaser under this Agreement are subject to the satisfaction (or
written waiver by the Purchaser) on or prior to the Closing Date of each of the
following conditions:
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(a) Accuracy of Representations and Warranties. Notwithstanding any
investigation, inspection or evaluation conducted or notice or Knowledge
obtained by the Purchaser, all representations and warranties of the
Company contained in this Agreement and the Related Securities Agreements
that contain qualifications and exceptions relating to materiality or a
Company Material Adverse Effect shall be true and correct on and as of the
Closing Date, and all other representations and warranties of the Company
contained in such agreements shall be true and correct in all material
respects as of the Closing Date, in each case with the same force and
effect as though such representations and warranties had been made on and
as of the Closing Date.
(b) Performance of Agreements. The Company 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 Related Securities Agreements) to be performed, complied
with or executed by it 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 Company Material Adverse Change.
(d) Third Party Consents. All Consents of any third party listed on
Schedule 6.3(d) shall have been obtained.
(e) Amended Certificate of Incorporation. The Amendment shall have
been filed with the Secretary of State of the State of Delaware.
(f) Officer's Certificate. The Purchaser shall have received a
certificate, dated the Closing Date, signed by the President or a Vice
President of the Company, to the effect that, to the knowledge of such
officer, the conditions specified in the above paragraphs have been
fulfilled.
SECTION 7
TERMINATION AND WAIVER
7.1 General. This Agreement may be terminated and the transactions
contemplated herein and in the Related Securities Agreements may be abandoned at
any time prior to the Closing:
(a) by the written consent of the Parties;
(b) by the Company if there has been a material misrepresentation or a
breach of an agreement by the Purchaser in this Agreement that (i) if such
misrepresentation or breach existed on the Closing Date, would constitute a
failure to satisfy any condition to Closing set forth in Section 6.2(a) or
6.2(b) and (ii) has not been cured and cannot reasonably be cured by the
earlier of (x) 30 days after all other conditions to Closing have been
satisfied and (y) the Termination Date;
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(c) by the Purchaser if there has been a material misrepresentation or
a breach of an agreement by the Company in this Agreement that (i) if such
misrepresentation or breach existed on the Closing Date, would constitute a
failure to satisfy any condition to Closing set forth in Section 6.3(a) or
6.3(b) and (ii) has not been cured and cannot reasonably be cured by the
earlier of (x) 30 days after all other conditions to Closing have been
satisfied and (y) the Termination Date;
(d) by the Company or the Purchaser in the event that the Closing does
not occur for any reason on or before 90 days after the date hereof, as
such 90-day period may be extended for up to an additional 120 days upon
request of any Party (the "Termination Date"). The right to terminate this
Agreement pursuant to this Section 7.1(d) shall not be available to any
Party whose breach of this Agreement has been the cause of, or resulted in,
the failure of the Closing to occur by the Termination Date unless the
failure to Close by such date is due to a breach by both of the Parties (in
which case the Company or the Purchaser may terminate this Agreement as
provided in Sections 7.1(b) or 7.1(c) respectively); or
(e) by any Party if it becomes impossible to satisfy any condition to
that Party's performance set forth in Sections 6.2 or 6.3.
Any right of termination set forth above shall be exercised by written notice
from the terminating Party to the other Party.
7.2 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 7 and Sections 9.6, 9.10, 9.11, 9.13 and 9.14 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.
SECTION 8
SURVIVAL AND INDEMNIFICATION
8.1 Survival.
(a) The representations and warranties of the Parties contained in
this Agreement or in any Related Securities Agreement shall not survive the
Closing, except that (i) the representations and warranties contained in
Section 3.8 shall survive indefinitely, together with any associated right
of indemnification pursuant to Section 8.3 and (ii) the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, 4.3, 4.4,
4.6, 4.7, 4.8 and 4.10 shall survive two years after the Closing, and shall
thereafter terminate, together with any associated right of indemnification
pursuant to Section 8.2 or 8.3.
(b) Except as expressly provided in this Agreement, the covenants and
agreements of the Parties contained in this Agreement or in any Related
Securities
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Agreement shall not be limited or affected by any investigation undertaken
by any Party, and shall survive indefinitely, together with any associated
right of indemnification.
8.2 Indemnification by the Purchaser.
(a) From and after the Closing, the Purchaser shall indemnify, defend
and hold harmless the Company Indemnified Parties from, against and in
respect of any losses, claims, damages, fines, penalties, assessments by
public agencies, settlement, cost or expenses (including reasonable
attorneys' fees) and other liabilities (any of the foregoing being a
"Loss"), as incurred (payable promptly upon written request), arising from,
in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of the
Purchaser in this Agreement that survives the Closing; and
(ii) any breach of any covenant or agreement of the Purchaser in
this Agreement.
(b) Notwithstanding the foregoing, the Purchaser shall not have any
liability with respect to breaches of representations and warranties in
this Agreement (i) of which the Company has Knowledge as of the Closing
Date or (ii) under Section 8.2(a)(i) unless the aggregate of all Losses for
which the Purchaser would, but for this Section 8.2(b)(i), be liable
exceeds on a cumulative basis an amount equal to 1% of the purchase price
paid pursuant to Section 1.2, as adjusted pursuant to the terms thereof, if
applicable; provided, however, that after such amount is reached the
Purchaser shall be responsible for the full amount of such Loss.
8.3 Indemnification by the Company.
(a) From and after the Closing, the Company shall indemnify, defend
and hold harmless the Purchaser Indemnified Parties from, against and in
respect of any Loss, as incurred (payable promptly upon written request),
arising from, in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of the Company
in this Agreement that survives the Closing; and
(ii) any breach of any covenant or agreement of the Company in
this Agreement.
(b) Notwithstanding the foregoing, the Company shall not have any
liability with respect to breaches of representations and warranties in
this Agreement (i) of which the Purchaser has Knowledge as of the Closing
Date or (ii) under Section 8.3(a)(i) unless the aggregate of all Losses for
which the Company would, but for this Section 8.3(b)(i), be liable exceeds
on a cumulative basis an amount equal to 1% of the purchase price paid
pursuant to Section 1.2, as adjusted pursuant to the terms thereof, if
applicable; provided, however, that after such amount is reached the
Company shall be responsible for the full amount of such Loss.
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8.4 Mitigation; Limitation on Consequential, Punitive and Exemplary
Damages.
(a) Each of the Parties shall mitigate, and shall cause each of its
Affiliates to mitigate, any Loss that such Party or its Affiliates may
suffer as a consequence of any matter giving rise to a right to
indemnification against any other Party or its Affiliates under Section 8
by taking all actions which a reasonable person would undertake to minimize
or alleviate the amount of such Loss and the consequences thereof, as if
such Person would be required to suffer the entire amount of such Loss and
the consequences thereof by itself, without recourse to any remedy against
another Person, including pursuant to any right of indemnification
hereunder.
(b) Notwithstanding any other provision of this Agreement, no
Indemnifying Party nor its Affiliates nor their respective agents,
employees or representatives shall be liable under Section 8 for
consequential, incidental, indirect or punitive damages or lost profits in
connection with direct claims by an Indemnified Party (i.e., a claim by an
Indemnified Party that does not seek reimbursement for a Third Party Claim
paid or payable by the Indemnified Party) with respect to the
indemnification obligations under this Agreement unless any such claim
arises out of the fraudulent actions of an Indemnifying Party or its
Affiliates.
(c) The rights provided to each Indemnified Party pursuant to this
Section 8, as limited by and subject to the provisions of this Section 8,
shall be such Indemnified Party's sole remedy for breach of any
representation or warranty by or covenant or obligation of any Indemnifying
Party under this Agreement or any Related Securities Agreement.
8.5 Procedures. In order for an Indemnified Party to be entitled to any
indemnification provided for under this Agreement, such Indemnified Party shall
deliver written notice of a claim for indemnification with reasonable promptness
to the Indemnifying Party, which notice shall describe in reasonable detail the
nature of the claim, an estimate of the amount of damages attributable to such
claim to the extent feasible and the basis of the Indemnified Party's request
for indemnification hereunder; provided that any failure to timely give such
notice shall not relieve the Indemnifying Party of any of its obligations under
this Section 8.5 except to the extent that such failure prejudices or impairs,
in any material respect, any of the rights or obligations of the Indemnifying
Party. If the Indemnifying Party disputes its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good
faith to negotiate a resolution of such dispute and, if not resolved through
negotiations, the Indemnified Party may initiate a judicial proceeding in
accordance with the conditions set forth in Sections 9.10, 9.13 and 9.14.
8.6 Termination of Indemnification. The obligations to indemnify and hold
harmless any Party shall terminate when the applicable representation or
warranty terminates pursuant to the terms of this Agreement; provided, however,
that such obligations to indemnify and hold harmless shall not terminate with
respect to any item as to which the Person to be indemnified shall have, before
the expiration of the applicable period, previously made a claim by delivering a
notice of such claim pursuant to Section 8.5 to the Party to be providing the
indemnification (which notice shall identify the representation or warranty
claimed to have been inaccurate, or
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the covenant claimed to have been breached, and shall state with reasonable
particularity the nature of the asserted inaccuracy or breach).
SECTION 9
MISCELLANEOUS
9.1 Successors and Assigns. No Party may 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. This Agreement shall be binding upon
and inure to the benefit of the successors of each of the Parties.
9.2 Benefits of Agreement Restricted to Parties. This Agreement is made
solely for the benefit of the Parties, and no other Person (including each
Party's employees or stockholders) shall have any right, claim or cause of
action under or by virtue of this Agreement.
9.3 Notices. All notices, requests and other communications (collectively,
the "Notices") made pursuant to this Agreement shall be in writing and signed
and correctly dated by the Party sending such Notice. All Notices shall be
delivered personally (by courier or otherwise) or by facsimile to the receiving
Party at the applicable address or facsimile number set forth below:
If to the Company:
Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. X'Xxxxx
Telecopy Number: 000-000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy Number: 000-000-0000
and
Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy Number: 000-000-0000
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If to the Purchaser:
Occidental Chemical Holding Corporation
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy Number: 000-000-0000
Any Notice delivered personally shall be deemed to have been given on the date
it is so delivered, or upon attempted delivery if acceptance of delivery is
refused, and any Notice delivered by facsimile shall be deemed to have been
given on the first Business Day it is received by the addressee (or, if such
Notice is not received during regular business hours of a Business Day, at the
beginning of the next such Business Day). The address and facsimile numbers set
forth above may be changed by a Party by giving Notice of such change of address
or facsimile number in the manner set forth in this Section 9.3.
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9.4 Severability. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect. If the economic and legal substance of the transaction
contemplated hereby is affected in any materially adverse manner as to any of
the Parties and the Parties cannot agree on a lawful substitute provision, the
adversely affected Party shall have the right to terminate this Agreement
immediately upon notice to the other Parties.
9.5 Press Releases. Unless otherwise mutually agreed, no Party shall make
or authorize any public release of information regarding the Partnership or any
other matters contemplated by, or any provisions or terms of, this Agreement or
the Related Securities Agreements except that (a) 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, (b) 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 (c) after
consultation with the other Parties, any Party may make any release that is
required by any Legal Requirement or stock exchange rule or as necessary for the
assertion or enforcement of contractual rights.
9.6 Confidentiality Agreement.
(a) The Company and Occidental have previously entered into the
Confidentiality Agreement relating to the exchange between the Company and
Occidental and its Affiliates 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, except that the choice of law and consent to
jurisdiction provisions in the Confidentiality Agreement shall be deemed to
be superseded for all purposes by the choice of law and consent to
jurisdiction provisions set forth in Sections 9.10, 9.13 and 9.14.
(b) In addition to the obligations of each Party set forth in
Section 9.6(a), the Purchaser, from and after the Closing, with respect to
itself and to its Affiliates, agrees and covenants with the Company that it
will keep confidential, and cause its and its Affiliates' respective
officers, directors, employees and advisors to keep confidential, all
information provided after the Closing Date relating to the Company and all
information relating to the operations and business of the Company, except,
in each case, as required by applicable law or administrative process (to
the extent so required) (in which case the Purchaser shall promptly notify
the Company and give the Company an opportunity to oppose such disclosure)
and except for information that is available to the public on the Closing
Date, or thereafter becomes available to the public other than as a result
of a breach of this Section 9.6(b). The covenants set forth in this Section
9.6(b) shall be effective as of Closing Date and shall terminate ten years
after the Closing Date.
-22-
9.7 Entire Agreement. This Agreement together with the Related Securities
Agreements sets forth the entire agreement and understanding among the Parties
as to the subject matter hereof and merges with and supercedes all prior
discussions, agreements and understandings of every kind and nature among them.
9.8 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) references
in this Agreement to Sections, Appendices, Schedules and Exhibits shall be
deemed to be references to Sections of, and Appendices, Schedules and Exhibits
to, this Agreement unless the context shall otherwise require; (vii) all
Appendices, Schedules and Exhibits attached to this Agreement shall be deemed
incorporated herein as if set forth in full herein; (viii) the words "hereof",
"herein" and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; (ix)
references to a Person are also to its permitted successors and permitted
assigns; and (x) unless otherwise expressly provided, any agreement, instrument
or statute defined or referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein.
9.9 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.
9.10 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.
9.11 Transaction Costs. Each Party shall be solely responsible for and
bear all of its own respective costs, fees and expenses.
9.12 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. The waiver by any Party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
-23-
9.13 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY OR ANY DISPUTE UNDER, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT 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 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 SHALL APPOINT THE
CORPORATION TRUST COMPANY, THE XXXXXXXX-XXXX 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 SHALL MAINTAIN THE APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE
AGENT) FROM THE DATE HEREOF UNTIL THE EARLIER OF THE 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. EACH PARTY HEREBY
WAIVES ANY OBJECTION IT MAY HAVE BASED ON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON-CONVENIENS.
9.14 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND INTENTIONALLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING UNDER, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
9.15 Further Assurances. From time to time, at the request of any other
Party, each Party shall execute and deliver or cause to be executed and
delivered such additional documents and instruments and take all such further
action as may be necessary or desirable to consummate the transactions
contemplated by this Agreement. When and if applicable, each Party shall
cooperate with the Company and timely comply with requests for information by
the Company which the Company may be required to seek pursuant to Temporary
Treasury Regulation Section 1.382-2T(k)(3).
-24-
IN WITNESS WHEREOF, this Securities Purchase 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.
LYONDELL CHEMICAL COMPANY
By: /s/ T. Xxxxx XxXxxxxx
______________________________________
Name: T. Xxxxx XxXxxxxx
Title: Senior Vice President, Chief
Financial Officer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ Xxxxx X. Xxxxxx
______________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
APPENDIX A
TO
SECURITIES PURCHASE AGREEMENT
DEFINITIONS
"20-Day Average Price" shall mean, at any date, the average of the Daily
Prices for the 20 consecutive Business Days ending two Business Days before such
date.
"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 neither the Partnership nor any entity controlled by it shall be
considered an Affiliate of the Company nor of the Purchaser. 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.
"Agent" shall have the meaning set forth in Section 9.13.
"Agreement" shall mean this Securities Purchase Agreement entered into
between the Parties as of the date hereof.
"Alternate Cash Consideration" shall have the meaning set forth in the
Partner Sub Purchase Agreement.
"Amendment" shall have the meaning set forth in Section 5.4.
"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).
"Bankruptcy Proceeding" shall mean (i) commencement by the Company's
creditors of an action regarding the Company under the Federal bankruptcy laws,
as now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law of the United States or any foreign
jurisdiction, (ii) commencement by the Company of a proceeding to be adjudicated
a voluntary bankrupt, (iii) consent by the Company to the filing of a bankruptcy
proceeding initiated against the Company, (iv) failure of the Company to contest
a bankruptcy proceeding against it or (v) consent by the Company to the
appointment of a receiver, custodian, liquidator or trustee for the Company or
for all or any substantial portion of its assets.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day on which the New York Stock Exchange,
Inc. is open for trading.
"Calendar Quarter" shall mean any of the following periods or any portion
thereof: (i) January 1 through March 31; (ii) April 1 through June 31; (iii)
July 1 through September 30; or (iv) October 1 through December 31.
A-1
"Closing" shall mean the closing of the transactions contemplated by this
Agreement.
"Closing Date" shall have the meaning set forth in Section 2.1.
"Common Stock" shall mean Original Common Stock and Series B Common Stock.
"Company" shall mean Lyondell Chemical Company, a Delaware corporation.
"Company Indemnified Parties" shall mean the Company and its Affiliates and
each of their respective officers, directors, employees, stockholders, agents
and representatives.
"Company Material Adverse Change" shall mean a material adverse change in
the financial condition, results of operations, assets or business of the
Company and its Subsidiaries taken as a whole, excluding changes resulting from
(i) economic or political conditions that affect the world or any regional
economy generally, (ii) any change in raw materials prices, product prices or
industry capacity or (iii) any other matter of industry-wide application that
affects the Company and its Subsidiaries taken as a whole and industry
participants whose businesses are comparable thereto in a substantially similar
way.
"Company Material Adverse Effect" shall mean any adverse circumstance or
consequence that, individually or in the aggregate, has an effect that is
material to (i) the financial condition, results of operations, assets or
business of the Company and its Subsidiaries taken as a whole or (ii) the
ability of the Company to perform its obligations under this Agreement or the
Related Securities Agreements.
"Company Rights Agreement" shall mean the Rights Agreement dated December
8, 1995 between the Company (formerly known as Lyondell Petrochemical Company)
and The Bank of New York, as rights agent.
"Company SEC Reports" shall have the meaning set forth in Section 3.5.
"Company Securities" shall mean the Initial Shares and the Warrants.
"Confidentiality Agreement" shall mean that Confidentiality Agreement
entered into as of January 7, 2002 between the Company and Occidental and
binding upon such Parties and their Affiliates as set forth therein.
"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 Securities Agreements in connection with (i) the execution and
delivery of this Agreement or any of the Related Securities Agreements or (ii)
the consummation of any of the transactions provided for hereby or thereby.
"Contingent Payment Amount" shall have the meaning set forth in Section
1.3.
A-2
"Contingent Shares" shall mean shares of Original Common Stock or Series B
Common Stock that are issued and delivered to the Purchaser as satisfaction for
a Contingent Payment Amount obligation in accordance with Section 1.3.
"Conversion Share" shall mean any share of Original Common Stock issued
upon the conversion of a share of Series B Common Stock in accordance with the
terms of the Series B Common Stock.
"Daily Price" shall mean, on any day, the average (calculated to the
nearest thousandth) of the high and low per share sales prices of Original
Common Stock on such day for sales conducted regular way, as such high and low
per share sales prices are reported on xxx.xxxxxxx.xxx or, if not reported
thereby, another authoritative source.
"Debt Documents" shall mean the Company's Credit Agreement dated as of July
23, 1998, as amended heretofore, and the Indentures, dated as of May 17, 1999
and December 4, 2001, among the Company, the guarantors party thereto and The
Bank of New York, as trustee.
"Encumbrance" shall mean any preferential right, lien, charge, encumbrance,
security interest, title defect, option or any other restriction or third-party
right.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Exercise Price" shall mean the exercise price of a Warrant, which is $25
for each Warrant exercised, subject to adjustment as provided in the Warrant.
"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 Securities Agreements or (ii) the
consummation of any of the transactions provided for hereby or thereby.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis.
"Government License" shall mean, with respect to any Person, all licenses,
permits or franchises issued by any Authority relating to the operation,
development, use, maintenance or occupancy of facilities or any other assets of
such Person's business to the extent that such licenses, permits or franchises
relate principally to the normal operation and conduct of such Person's
business.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indemnified Parties" shall mean the Purchaser Indemnified Parties and the
Company Indemnified Parties.
"Indemnifying Parties" shall mean the Party against whom indemnity is
sought.
A-3
"Initial Shares" shall mean the shares of Series B Common Stock to be
issued pursuant to Section 1.1.
"Knowledge" shall mean with respect to any Party, the actual knowledge of
any of its corporate officers.
"Legal Requirement" shall mean any law, statute, rule, ordinance, decree,
regulation, requirement, order, temporary or permanent injunction or judgment of
any Authority including the terms of any Government License.
"Loss" shall have the meaning set forth in Section 8.2(a).
"Net Payment Right" shall mean the right of the Company, upon exercise of a
Warrant, to pay the difference between the Daily Price of the Original Common
Stock on the date of such exercise and the Exercise Price in lieu of issuing one
share of Original Common Stock for each Warrant exercised, such payment to be in
the form of cash, Original Common Stock or Series B Common Stock.
"Net Payment Shares" shall mean shares of Original Common Stock or Series B
Common Stock that are issued by the Company upon exercise of a Warrant in
accordance with section 2(b) of the Warrant.
"Notice" shall have the meaning set forth in Section 9.3.
"OCC" shall mean Occidental Chemical Corporation, a New York corporation.
"Occidental" shall mean Occidental Petroleum Corporation, a Delaware
corporation.
"Occidental Material Adverse Change" shall mean a material adverse change
in the financial condition, results of operations, assets or business of the
Purchaser, excluding changes resulting from (x) economic or political conditions
that affect the world or any regional economy generally, (y) any change in raw
materials prices, product prices or industry capacity or (z) any other matter of
industry-wide application that affects the Purchaser and industry participants
whose businesses are comparable thereto in a substantially similar way.
"Occidental Material Adverse Effect" shall mean any circumstance or
consequence that, individually or in the aggregate, has an effect that is
material to (i) the financial condition, results of operations, assets or
business of the Purchaser or (ii) on the ability of the Purchaser to perform its
obligations under this Agreement or of any Occidental Party to perform its
obligations under any Related Securities Agreement.
"Occidental Parent" shall mean OCC and Oxy CH.
"Occidental Parties" shall mean Occidental and the Purchaser.
A-4
"Occidental Rights Trigger Amount" shall mean the sum without duplication
of the following acquired by Occidental or its Affiliates: (i) up to 34 million
shares of Series B Common Stock acquired pursuant to Section 1.1(b) and any
Conversion Shares, plus (ii) the number of shares of Original Common Stock
acquired by Occidental or any of its Affiliates as a result of the exercise of
the Warrant or the number of shares of Original Common Stock or Series B Common
Stock received by Occidental from the Company in satisfaction of the Company's
obligations under the Warrant, plus (iii) the number of shares of Original
Common Stock or Series B Common Stock received by Occidental or any of its
Affiliates under the terms of Section 1.3 as a result of the Company's
satisfaction of its obligations hereunder to pay the Contingent Payment Amount,
plus (iv) the number of shares of Series B Common Stock received by Occidental
or any of its Affiliates as a result of a dividend declared and paid on the
Series B Common Stock that is satisfied by delivering additional shares of
Series B Common Stock, plus (v) an aggregate of not more than 320,000 shares of
Original Common Stock acquired in the open market in any Calendar Quarter in
accordance with Section 2.2(b) of the Stockholder Agreement; provided that such
sum will not exceed a number of shares of Original Common Stock and Series B
Common Stock in the aggregate that is equal to 40% of all outstanding shares of
Original Common Stock and Series B Common Stock in the aggregate at any time.
"Original Common Stock" shall mean any shares of common stock, par value
$1.00 per share, of the Company that are not Series B Common Stock, whether as
provided for in the Restated Certificate of Incorporation of the Company, as
amended, in effect as of the date of this Agreement or in the Amendment.
"Oxy CH" shall mean Oxy CH Corporation, a California corporation.
"Parties" shall mean the Company and the Purchaser.
"Partnership" shall mean Equistar Chemicals, LP, a Delaware limited
partnership.
"Partnership Agreement" shall mean the partnership agreement of the
Partnership.
"Partnership Distribution" shall have the meaning set forth in Section 1.3.
"Partner Sub Purchase Agreement" shall mean that certain agreement dated
July 8, 2002 by and among the Company, the Purchaser, Oxy CH and OCC.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization.
"PIK Shares" shall mean any shares of Series B Common Stock issued at the
option of the Company, in lieu of a cash dividend otherwise required to be paid,
under the terms of the Series B Common Stock.
"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.
A-5
"Proxy Statement" shall mean the Proxy Statement of the Company to be filed
with the SEC under the Exchange Act, pursuant to which the Company will seek its
stockholders' approval of the Amendment and the issuance of the Company
Securities as contemplated hereby.
"Purchaser" shall mean Occidental Chemical Holding Corporation, a
California corporation.
"Purchaser Indemnified Parties" shall mean the Purchaser and its Affiliates
and each of their respective officers, directors, employees, stockholders,
agents and representatives.
"Registration Rights Agreement" shall have the meaning set forth in Section
2.3.
"Related Securities Agreements" shall mean the Stockholder Agreement, the
Registration Rights Agreement and the Warrant.
"Sale Proceeds" shall mean the proceeds received from the sale of Common
Stock pursuant to Section 5.8, minus all costs, fees and expenses of Occidental
or its Affiliates in connection with such sale, including underwriting discounts
and commissions and fees and expenses of counsel, but excluding any taxes
payable as a result of such sale.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series B Common Stock" shall mean the shares of Series B common stock, par
value $1.00 per share, of the Company to be authorized by the Amendment.
"Stockholder Agreement" shall mean have the meaning set forth in Section
2.3.
"Subject Securities" shall mean the Initial Shares, Net Payment Shares,
Warrant Shares, PIK Shares, Contingent Shares, Conversion Shares and the
Warrants.
"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.
"Termination Date" shall have the meaning set forth in Section 7.1(d).
"Units" shall mean units representing interests in the Partnership as
defined in the Partnership Agreement.
"Warrant" shall mean a warrant for the purchase of a share of Original
Common Stock.
"Warrant Shares" shall mean shares of Original Common Stock issued pursuant
to the exercise of a Warrant.
A-6
SCHEDULES
TO
SECURITIES PURCHASE AGREEMENT
3 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF THE COMPANY
None.
4 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
None.
6.2(d) THIRD PARTY CONSENTS - COMPANY
None.
6.3(d) THIRD PARTY CONSENTS - PURCHASER
None.
S-1
