EXHIBIT 10.5
EXECUTION COPY
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OCCIDENTAL PARTNER SUB PURCHASE AGREEMENT
AMONG
LYONDELL CHEMICAL COMPANY,
OCCIDENTAL CHEMICAL HOLDING CORPORATION,
OXY CH CORPORATION
AND
OCCIDENTAL CHEMICAL CORPORATION
JULY 8, 2002
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TABLE OF CONTENTS
Page
SECTION 1 COVENANTS REGARDING PRE-CLOSING RESTRUCTURING........................2
1.1 Pre-Closing Restructuring........................................2
1.2 Organization, Capitalization, Title..............................2
SECTION 2 PURCHASE AND SALE OF THE OCCIDENTAL PARTNER SUBS.....................2
2.1 Sale of the Occidental Partner Subs..............................2
2.2 Purchase Price...................................................3
SECTION 3 CLOSING DATE, PAYMENT AND DELIVERY...................................3
3.1 Closing Date.....................................................3
3.2 Payment and Delivery.............................................3
3.3 Payments of Cash; Delivery of Certificates.......................3
SECTION 4 REPRESENTATIONS AND WARRANTIES OF OCCIDENTAL PARTIES.................4
4.1 Organization, Good Standing and Power............................4
4.2 Authorization and Validity of Agreements.........................4
4.3 Lack of Conflicts................................................4
4.4 Certain Fees.....................................................5
4.5 Occidental Partner Subs..........................................5
4.6 Partnership Units................................................6
4.7 Tax Matters......................................................7
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................8
5.1 Organization, Good Standing and Power............................8
5.2 Authorization and Validity of Agreement..........................9
5.3 Lack of Conflicts................................................9
5.4 Certain Fees.....................................................9
5.5 Financing.......................................................10
5.6 Investment......................................................10
5.7 Investigation; No General Solicitation..........................10
5.8 Sophistication and Financial Condition of Purchaser.............10
SECTION 6 ADDITIONAL AGREEMENTS...............................................10
6.1 Conduct of Occidental Business Pending the Closing Date.........10
6.2 Further Actions.................................................11
6.3 Notifications...................................................12
6.4 No Inconsistent Action..........................................12
6.5 Preservation of Corporate Existence of Oxy LP2..................13
6.6 Release.........................................................13
6.7 [Intentionally Omitted].........................................13
6.8 Agreement Regarding OCC Indemnity...............................13
6.9 Indemnity and Other Agreements Regarding Potential Loss of
Units Under Section 14 of the Partnership Agreement.............13
SECTION 7 ADDITIONAL AGREEMENTS REGARDING CERTAIN TAX MATTERS.................16
7.1 Absence of Section 338(h)(10) Election..........................16
7.2 Absence of Tax Election As to Oxy LP1...........................16
7.3 Tax Indemnification.............................................16
7.4 Tax Indemnification Duration....................................16
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7.5 Straddle Periods................................................16
7.6 Responsibility for Filing Tax Returns for Periods through
Closing Date....................................................17
7.7 Cooperation on Tax Matters......................................17
7.8 Tax Sharing Agreements..........................................18
7.9 Certain Taxes and Fees..........................................18
7.10 Audits..........................................................18
7.11 Carrybacks......................................................18
7.12 Post Closing Elections..........................................18
7.13 Consistent Tax Treatment........................................19
7.14 Refunds.........................................................19
SECTION 8 CONDITIONS TO CLOSING...............................................19
8.1 Conditions Precedent to Obligations of Both Parties.............19
8.2 Conditions Precedent to Obligations of Occidental Parties.......19
8.3 Conditions Precedent to Obligations of the Purchaser............20
SECTION 9 TERMINATION.........................................................21
9.1 General.........................................................21
9.2 Effect of Termination...........................................22
SECTION 10 SURVIVAL AND INDEMNIFICATION.......................................22
10.1 Survival........................................................22
10.2 Indemnification by the Purchaser................................23
10.3 Indemnification by the Occidental Parties.......................23
10.4 Mutual Indemnity................................................24
10.5 Mitigation; Limitation on Consequential, Punitive and
Exemplary Damages; Exclusive Remedy.............................24
10.6 EXTENT OF INDEMNIFICATION.......................................25
10.7 Procedures......................................................25
10.8 Termination of Indemnification..................................27
SECTION 11 MISCELLANEOUS......................................................28
11.1 Successors and Assigns..........................................28
11.2 Benefits of Agreement Restricted to Parties.....................28
11.3 Notices.........................................................28
11.4 Severability....................................................29
11.5 Press Releases..................................................29
11.6 Confidentiality Agreement.......................................30
11.7 Entire Agreement................................................30
11.8 Construction....................................................30
11.9 Counterparts....................................................31
11.10 Governing Law...................................................31
11.11 Transaction Costs...............................................31
11.12 Amendment.......................................................31
11.13 Jurisdiction; Consent to Service of Process; Waiver.............31
11.14 Waiver of Jury Trial............................................32
11.15 Special Joinder by Oxy LP2......................................32
11.16 Special Joinder by Occidental...................................32
11.17 Further Assurances..............................................32
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APPENDIX
Appendix A Definitions
SCHEDULES
Schedule 1.2 Organization, Capitalization, Title
Schedule 2.2 Allocation of Purchase Price
Schedule 4 Exceptions to Representations and Warranties of Occidental
Parties
Schedule 4.5 Organization, Capitalization, Title
Schedule 4.6 Partnership Units
Schedule 4.7(e) Tax Basis
Schedule 5 Exceptions to Representations and Warranties of the
Purchaser
Schedule 5.5 Financing
Schedule 8.2(d) Occidental Consents
Schedule 8.3(e) Purchaser Consents
EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of Option to Sell Petrochemical Plant Agreement
Exhibit C Form of $75 Million Note
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OCCIDENTAL PARTNER SUB PURCHASE AGREEMENT
This OCCIDENTAL PARTNER SUB PURCHASE AGREEMENT (this "Agreement"),
dated July 8, 2002, is entered into by and among Lyondell Chemical Company, a
Delaware corporation (the "Purchaser"), Occidental Chemical Holding Corporation,
a California corporation ("OCHC"), Oxy CH Corporation, a California corporation
("Oxy CH"), and Occidental Chemical Corporation, a New York corporation ("OCC").
The definitions of capitalized terms used in this Agreement are
set forth in Appendix A.
RECITALS
WHEREAS, Oxy CH and OCC are each indirect wholly owned
subsidiaries of OCHC;
WHEREAS, OCC owns all of the outstanding capital stock of
Occidental Petrochem Partner 1, Inc., a Delaware corporation ("Oxy LP1");
WHEREAS, Oxy CH owns all of the outstanding capital stock of each
of Occidental Petrochem Partner 2, Inc., a Delaware corporation ("Oxy LP2"), and
Occidental Petrochem Partner GP, Inc., a Delaware corporation ("Oxy GP" and
together with Oxy LP1 and Oxy LP2, the "Occidental Partner Subs");
WHEREAS, the Occidental Partner Subs hold, in the aggregate, a
29.5% partnership interest in Equistar Chemicals, LP, a Delaware limited
partnership (the "Partnership");
WHEREAS, Oxy CH and OCC are the Occidental Parent referred to in
the Parent Agreement for purposes of Section 2 of the Parent Agreement (the
"Occidental Parent");
WHEREAS, Lyondell and Millennium are each a "Parent" for purposes
of the Parent Agreement;
WHEREAS, Section 2.2 of the Parent Agreement provides a right of
first option for Lyondell and Millennium to purchase a pro-rata portion of the
Partner Sub Stock;
WHEREAS, Millennium did not elect to purchase its pro-rata portion
of the Partner Sub Stock and Lyondell elected to purchase all of the Partner Sub
Stock; and
WHEREAS, the Occidental Parent desires to Transfer all of the
Partner Sub Stock to the Purchaser upon the terms and subject to the conditions
hereinafter set forth;
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
COVENANTS REGARDING PRE-CLOSING RESTRUCTURING
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1.1 Pre-Closing Restructuring. Prior to Closing, OCC shall cause Oxy
LP1 to convert into a Delaware limited liability company.
1.2 Organization, Capitalization, Title. The Occidental Parties
covenant that as of Closing:
(a) The name, form of entity and jurisdiction of incorporation
or organization of Oxy LP1 will be as set forth on Schedule 1.2. True,
correct and complete copies of the limited liability company
organizational documents for Oxy LP1 will be delivered to the Purchaser
prior to Closing.
(b) The capitalization of Oxy LP1 will be as set forth on
Schedule 1.2. The respective limited liability company interests set
forth thereon will constitute all the outstanding ownership interests of
Oxy LP1. The Oxy LP1 Interests, Oxy LP2 Shares and Oxy GP Shares
collectively will represent 100% of Occidental's ownership interest in
the Partnership.
(c) All of the Oxy LP1 Interests will be owned beneficially and
of record by OCC. All Oxy LP1 Interests will be duly authorized and
validly issued in accordance with its governing or organizational
documents, and will be fully paid and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Limited
Liability Company Act of the State of Delaware) and none of the Oxy LP1
Interests will have been issued in violation of any preemptive rights.
(d) OCC will own all of the limited liability company interests
set forth in Schedule 1.2 free and clear of all Encumbrances, and such
interests will not be subject to any agreements or understandings with
respect to the voting, ownership or Transfer thereof. There will not be
outstanding subscriptions, options, convertible securities, warrants or
calls of any kind issued or granted by, or binding upon, any Occidental
Party or its Affiliates to purchase or otherwise acquire or to sell or
otherwise dispose of any security or equity interest of Oxy LP1.
(e) OCC will have full legal right to Transfer the Oxy LP1
Interests to the Purchaser or one or more of its Affiliates.
SECTION 2
PURCHASE AND SALE OF THE OCCIDENTAL PARTNER SUBS
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2.1 Sale of the Occidental Partner Subs. At Closing:
(a) OCC shall Transfer and deliver to the Purchaser, or to one
or more Affiliates of the Purchaser designated in writing by the
Purchaser, all of the Oxy LP1 Interests and the Purchaser (or such
Affiliate or Affiliates) shall purchase and acquire all of the Oxy LP1
Interests from OCC; and
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(b) Oxy CH shall Transfer and deliver to the Purchaser, or to
one or more Affiliates of the Purchaser designated in writing by the
Purchaser, all of the Oxy LP2 Shares and the Oxy GP Shares and the
Purchaser (or such Affiliate or Affiliates) shall purchase and acquire
all of the Oxy LP2 Shares and the Oxy GP Shares from Oxy CH.
2.2 Purchase Price. The aggregate purchase price payable to OCC and
Oxy CH by the Purchaser for the Partner Sub Stock shall be $440,010,000. Such
aggregate purchase price shall be allocated between OCC and Oxy CH as set forth
on Schedule 2.2.
SECTION 3
CLOSING DATE, PAYMENT AND DELIVERY
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3.1 Closing Date. The Closing shall be held at the offices of Xxxxx
Xxxxx L.L.P. in Houston, Texas at 10:00 a.m. on (i) August 30, 2002, or (ii) if
all conditions set forth in Sections 8.1, 8.2 and 8.3, 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 all 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").
3.2 Payment and Delivery. At Closing:
(a) the Purchaser shall, or shall cause its Affiliates to,
transmit the portion of the aggregate purchase price allocated to OCC and
Oxy CH in Schedule 2.2 to OCC and Oxy CH, respectively,
(b) OCC shall deliver to the Purchaser a certificate
representing the Oxy LP1 Interests purchased hereunder (together with a
stock power executed in blank and any other appropriate documentation to
a similar effect as reasonably requested by the Purchaser) and
(c) Oxy CH shall deliver to the Purchaser certificates
representing the Oxy GP Shares and the Oxy LP2 Shares purchased hereunder
(together in each case with stock powers executed in blank and any other
appropriate documentation to a similar effect as reasonably requested by
the Purchaser).
3.3 Payments of Cash; 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
Partner Sub Stock certificates delivered hereunder shall be duly registered in
the name of the intended recipient and shall bear the legend set forth in
Section 2.1(b) of the Parent Agreement.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF OCCIDENTAL PARTIES
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Except as set forth on Schedule 4, the Occidental Parties jointly
and severally represent and warrant to the Purchaser as follows:
4.1 Organization, Good Standing and Power. Each Occidental Party (i)
is a corporation duly incorporated, 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 now being conducted by it, (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 all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder.
4.2 Authorization and Validity of Agreements.
(a) The execution, delivery and performance by each Occidental
Party of this Agreement and the consummation by each such Party of the
transactions contemplated hereby have been duly authorized and approved
by all necessary corporate or similar action on its part. This Agreement
has been duly and validly executed and delivered by each Occidental Party
and is its legal, valid and binding obligation, enforceable against each
such 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.
(b) The execution, delivery and performance by each Occidental
Party of the Related Purchase Agreements to which it will be a party and
the consummation by each such Occidental Party 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 Purchase Agreements to which an Occidental Party 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.
4.3 Lack of Conflicts. Execution, delivery and, assuming receipt of
the Consents contemplated by Schedule 8.2(d), performance by each Occidental
Party of this Agreement and the Related Purchase Agreements to which it is or
will be a party and the consummation by each such party of the transactions
contemplated hereby and thereby does not and, as of the Closing, will not (i)
violate (with or without the giving of notice or the lapse of time or both) any
Legal Requirement applicable to any of them or any of their Subsidiaries or to
Occidental, other than those that would not be reasonably likely to have an
Occidental Material Adverse Effect, (ii)
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conflict with, or result in the breach of, any provision of the charter or
by-laws or similar governing or organizational documents of any of them or any
of their Subsidiaries, (iii) result in the creation of any Encumbrance upon any
of their assets, other than those arising under this Agreement 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 that with notice, lapse of time or both, would
constitute a default or event of default under the terms of, any contract,
indenture, lease, mortgage, Government License or other agreement or instrument
to which any of them or any of their Subsidiaries or Occidental is a party or by
which the properties or businesses of any of them or any of their Subsidiaries
are bound, except for violations, conflicts, breaches, terminations and defaults
that would not be reasonably likely to have an Occidental Material Adverse
Effect.
4.4 Certain Fees. No Occidental Party 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.
4.5 Occidental Partner Subs.
(a) The name, form of entity and jurisdiction of incorporation
or organization of each Occidental Partner Sub as of the date of this
Agreement are set forth on Schedule 4.5. True, correct and complete
copies of the charter and bylaws or comparable organizational documents
for each Occidental Partner Sub have been delivered to the Purchaser.
(b) The capitalization of each Occidental Partner Sub as of the
date of this Agreement is as set forth on Schedule 4.5. The respective
shares set forth thereon constitute all the outstanding capital stock of
each such Occidental Partner Sub, as of the dates indicated thereon. The
Oxy LP1 Shares, Oxy LP2 Shares and Oxy GP Shares collectively represent
100% of Occidental's ownership interest in the Partnership.
(c) As of the date of this Agreement, (i) Oxy LP1 Shares are
owned beneficially and of record by OCC and (ii) the Oxy LP2 Shares and
Oxy GP Shares are owned beneficially and of record by Oxy CH. All Partner
Sub Stock is duly authorized, validly issued, fully paid and
nonassessable and none of the Partner Sub Stock was issued in violation
of any preemptive rights.
(d) OCC and Oxy CH own all of the shares of Partner Sub Stock
as set forth in Section 4.5(c) free and clear of all Encumbrances, and
such shares are not subject to any agreements or understandings with
respect to the voting, ownership or Transfer thereof. There are no
outstanding subscriptions, options, convertible securities, warrants or
calls of any kind issued or granted by, or binding upon, any Occidental
Party or any of its Affiliates to purchase or otherwise acquire or to
sell or otherwise dispose of any security or equity interest in any of
the Occidental Partner Subs.
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(e) OCC and Oxy CH have full legal right, respectively, to
Transfer the Oxy LP1 Shares, Oxy LP2 Shares and Oxy GP Shares to the
Purchaser (or one or more of its Affiliates).
(f) Except for any liability of Oxy GP arising under Delaware
law because it is a general partner of the Partnership, in the case of
each Occidental Partner Sub, (A) its business is and, since its
incorporation, has been restricted solely to the holding of its Units and
the doing of things necessary or incidental in connection therewith
(including the exercise of its rights and powers under the Partnership
Agreement), (B) it does not and, since its incorporation, has not, owned
any assets, incurred any liabilities or engaged, participated or invested
in any business outside the scope of the business set forth in (A), (C)
it does not and, since its incorporation, has not, had any employees,
(D) it does not have any outstanding debt obligations, including any
permitted under Section 2.4 of the Parent Agreement, (E) it is not a
party to any contracts or agreements and (F) except as provided in
Section 6.8, it has not incurred any other liabilities that remain
outstanding.
(g) In the case of the Occidental Partner Subs, taken together,
(A) to the Knowledge of each Occidental Party, no Occidental Partner Sub
has any liabilities or obligations of any nature, whether or not fixed,
accrued, contingent or otherwise, except liabilities and obligations that
do not or are not reasonably likely to have, individually or in the
aggregate, an Occidental Material Adverse Effect and (B) there are no
Proceedings pending or to any Occidental Party's Knowledge, threatened,
involving any Occidental Partner Sub that could reasonably be expected to
have an Occidental Material Adverse Effect and no Occidental Party has
Knowledge of any judgment, order writ, injunction or decree of any
Authority against or involving any Occidental Partner Sub. No Occidental
Partner Sub 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 such Occidental Partner Sub is a party or by which it or any of its
properties is bound, except for violations and defaults that individually
and in the aggregate would not be reasonably likely to have an Occidental
Material Adverse Effect.
4.6 Partnership Units. Each Occidental Partner Sub owns beneficially
and of record the Units set forth opposite its name on Schedule 4.6 and the
partnership interests that relate thereto free and clear of all Encumbrances,
and such Units and related partnership interests are not subject to any
agreements or understandings with respect to the voting, ownership or Transfer
thereof or with respect to any other rights of a partner of the Partnership
holding such Units under the Partnership Agreement. There are no outstanding
subscriptions, options, convertible securities, warrants or calls of any kind
issued or granted by, or binding upon, any Occidental Party or any of its
Affiliates to purchase or otherwise acquire or to sell or otherwise dispose of
the Units or the related partnership interests.
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4.7 Tax Matters.
(a) Each Occidental Partner Sub has filed all Tax Returns that
it was required to file under applicable laws and regulations. All such
Tax Returns were correct and complete in all respects and have been
prepared in substantial compliance with all applicable laws and
regulations. All Taxes due and owing by any Occidental Partner Sub
(whether or not shown on any Tax Return) have been paid. There are no
liens for Taxes (other than Taxes not yet due and payable) upon any of
the assets of any Occidental Partner Sub.
(b) Each Occidental Partner Sub has withheld and paid all Taxes
required to have been withheld and paid in connection with any amounts
paid or owing to any employee, independent contractor, creditor,
stockholder or other third party.
(c) No Occidental Partner Sub has reason to expect that any
Authority will assess an Occidental Partner Sub for additional Taxes
(other than Taxes attributable to its interest in the Partnership) for
any period for which Tax Returns have been filed. No Occidental Partner
Sub has received from any foreign, federal, state or local taxing
Authority (including jurisdictions where any Occidental Partner Sub has
not filed Tax Returns) any notice of deficiency or proposed adjustment
for any amount of Tax proposed, asserted, or assessed by any taxing
Authority against any Occidental Partner Sub (other than Tax attributable
to its interest in the Partnership). The Occidental Parties or their
Affiliates have delivered to the Purchaser correct and complete copies of
all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by any Occidental Partner Sub
filed or received since its formation.
(d) No Occidental Partner Sub has filed a consent under Section
341(f) of the Code concerning collapsible corporations.
(e) To the Knowledge of the Occidental Parties, the correct
aggregate tax basis (as determined solely for federal income tax
purposes) of the properties that have been contributed to the Partnership
by Oxy GP and Oxy LP2 (or their predecessors in interest) is at least 95%
of the aggregate tax basis amount reported to the Partnership. Schedule
4.7(e) sets forth the following information (as determined solely for
federal income tax purposes) with respect to each Occidental Partner Sub
as of the most recent practicable date: (i) the basis of each Occidental
Partner Sub in each of its assets other than its interest in the
Partnership; (ii) the amount of any net operating loss, net capital loss,
unused investment or other credit, unused foreign tax, or excess
charitable contribution allocable to any Occidental Partner Sub; and
(iii) the amount of any deferred gain or loss allocable to any Occidental
Partner Sub arising out of any intercompany transaction, other than such
deferred gains or losses included in the income of an Occidental Partner
Sub in a tax year ending on or before the Closing Date.
(f) Each Occidental Partner Sub has amended or will amend its
federal income Tax Returns corresponding exactly to the information
provided to such Occidental Partner Sub by the Partnership.
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(g) Other than because of such items being reported by the
Partnership, Oxy LP2 will not be required to include any item of income
in taxable income for any taxable period (or portion thereof) ending
after the Closing Date as a result of any: (i) change in method of
accounting for a taxable period ending on or prior to the Closing Date;
(ii) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date; (iii) intercompany
transactions or any excess loss account described in Treasury Regulations
under Section 1502 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law); (iv) installment sale or open
transaction disposition made on or prior to the Closing Date; or (v)
prepaid amount received on or prior to the Closing Date.
(h) Each Affiliated Group of which any Occidental Partner Sub
is or was a member (each an "Occidental Affiliated Group") has filed all
income Tax Returns that it was required to file for each taxable period
during which any Occidental Partner Sub was a member of such group. Any
tax shown as due on such returns as owing has been paid. With respect to
the items on such Occidental Affiliated Group Tax Returns specifically
concerning any Occidental Partner Sub, other than items for which such
Tax Returns are filed or amended in accordance with information provided
by the Partnership, there is no dispute or claim either (i) claimed or
raised by any authority in writing or (ii) as to which any Occidental
Party or its Affiliate has Knowledge based upon personal contact with any
agent of such authority.
(i) None of the Occidental Partner Subs has any liability for
the Taxes of any other Person under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law).
SECTION 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
Except as set forth on Schedule 5, the Purchaser represents and
warrants to the Occidental Parties that:
5.1 Organization, Good Standing and Power. The Purchaser (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the corporate power and authority to own, lease
and operate its assets and to conduct its business as now being conducted by it,
(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 Purchaser Material
Adverse Effect and (iii) has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
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5.2 Authorization and Validity of Agreement.
(a) The execution, delivery and performance by the Purchaser 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 Purchaser 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 Purchaser of
the Related Purchase Agreements to which it will be a party and the
consummation by the Purchaser 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
Purchase Agreements to which the Purchaser 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.
5.3 Lack of Conflicts. The execution, delivery and, assuming receipt
of the Consents contemplated by Schedule 8.3(e), performance by the Purchaser of
this Agreement and the Related Purchase Agreements to which it is or will be a
party and the consummation by it of the transactions contemplated hereby and
thereby does not and, as of the Closing, will not (i) violate (with or without
the giving of notice or the lapse of time or both) any Legal Requirement
applicable to it or any of its Subsidiaries, other than those that would not be
reasonably likely to have a Purchaser 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 it 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 those that would not be reasonably
likely to have a Purchaser 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 that 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
Purchaser Material Adverse Effect.
5.4 Certain Fees. Neither the Purchaser nor any of its Affiliates nor
any of their officers, directors or employees, on behalf of the Purchaser 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.
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5.5 Financing. The Purchaser either (i) has sufficient cash resources
to pay the purchase price set forth in Section 2.2 and to pay all of its
associated fees and expenses or (ii) has entered into definitive agreements as
described in Schedule 5.5 providing for sufficient funds to pay the purchase
price set forth in Section 2.2 and to pay all of its associated fees and
expenses.
5.6 Investment. The Purchaser is acquiring the Partner Sub Stock 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 Partner Sub Stock
to be acquired by it. The Purchaser acknowledges that any certificate
representing Partner Sub Stock will bear the legend set forth in Section 2.1(b)
of the Parent Agreement.
5.7 Investigation; No General Solicitation. The Purchaser has had a
reasonable opportunity to ask questions relating to and otherwise discuss the
Partnership's business, management and financial affairs with the Occidental
Parties' management and other Persons, 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 Partner Sub Stock
hereunder. The Purchaser has relied only on its own independent investigation
and on the Occidental Parties' representations and warranties in this Agreement
before deciding to acquire the Partner Sub Stock.
5.8 Sophistication and Financial Condition of Purchaser. 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 Partner Sub Stock and
to protect its own interest in connection with its acquisition of the Partner
Sub Stock. The Purchaser is able to bear the economic risk of this investment,
is able to hold the Partner Sub Stock indefinitely and has a sufficient net
worth to sustain a loss of its entire investment in the Partner Sub Stock in the
event such loss should occur.
SECTION 6
ADDITIONAL AGREEMENTS
---------------------
6.1 Conduct of Occidental Business Pending the Closing Date. Each
Occidental Party 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) not amend the organizational documents of any of the
Occidental Partner Subs or permit the merger or consolidation of any of
the Occidental Partner Subs;
(b) not cause or permit any of the Occidental Partner Subs to
(i) enter into any agreement of any nature, (ii) lease, assign or dispose
of any assets, (iii) purchase or otherwise acquire any assets, (iv) incur
or assume any liabilities, (v) except as set forth in the OCC Indemnity
and as contemplated by Section 6.8, assume, guarantee, endorse or
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otherwise become liable with respect to any indebtedness or (vi) waive
any material claims or rights;
(c) not cause or permit any of the Occidental Partner Subs to
(i) issue any shares of capital stock or limited liability interests or
other equity or debt securities or options, warrants, conversion rights
or other rights to acquire equity or debt securities or (ii) split,
combine or reclassify any of their capital stock or limited liability
interests or issue or authorize or propose the issuance of any other
securities in respect of, in lieu or in substitution for, shares of their
capital stock or limited liability interests;
(d) not purchase or otherwise acquire any shares of capital
stock of the Purchaser;
(e) maintain its or their books, accounts and records of and
relating to the Occidental Partner Subs in the usual, regular and
ordinary manner, on a basis consistent with past practice and in
accordance with GAAP, comply in all material respects with all Legal
Requirements and contractual obligations applicable to the Occidental
Partner Subs and perform all of its or their material obligations
relating to the Occidental Partner Subs;
(f) after obtaining Knowledge thereof, give notice to the
Purchaser of any claim or litigation (threatened or instituted) or any
other event or occurrence that could reasonably be expected to have an
Occidental Material Adverse Effect;
(g) not take any action that is reasonably likely to result in
its representations and warranties in Section 4 not being true in all
material respects as of the Closing Date;
(h) not make or change any election, change an annual
accounting period, adopt or change any accounting method, file any
amended Tax Return, or take any other similar action relating to the
filing of any Tax Return or the payment of any Tax, if such election,
adoption, change, or amendment would have the effect of increasing the
Tax liability of Oxy LP2 or Oxy GP for any period ending after the
Closing Date;
(i) not create or suffer to exist any Encumbrance (i) on the
Oxy LP1 Shares, Oxy LP2 Shares and Oxy GP Shares or (ii) following the
conversion of Oxy LP1 into a limited liability company as contemplated by
Section 1.1, on the Oxy LP1 Interests; and
(j) not agree, whether in writing or otherwise, to take any
action it has agreed pursuant to this Section 6.1 not to take.
6.2 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.
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(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 to confirm that such transactions have been accomplished,
including using its commercially reasonable efforts to obtain and effect
prior to the Closing Date all Consents and Filings necessary to
consummate the transactions contemplated hereby. 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
6.2(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 act in good faith to effect the Closing at
the earliest practicable date.
(f) None of the provisions of this Section 6.2 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.
6.3 Notifications. Each Party shall notify the other Parties and keep
each of them advised as to (i) any Proceeding that is either pending or, to its
Knowledge, threatened against such Party that 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.
6.4 No Inconsistent Action. No Party shall take any material action
inconsistent with its obligations under this Agreement or that could materially
hinder or delay the consummation of the Closing; provided, however, that any
action that may be taken in accordance with Section 6.1 shall not be deemed to
violate this Section 6.4.
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6.5 Preservation of Corporate Existence of Oxy LP2. After the Closing
and prior to the first anniversary of the Closing Date, the Purchaser shall not,
and shall not cause or permit any of its Affiliates to, (i) cause Oxy LP2 to be
changed from a corporation to another form of entity or (ii) take any action to
effect the merger, consolidation or liquidation or the Transfer of more than 50%
of the assets of Oxy LP2.
6.6 Release. Except for the agreement regarding the OCC Indemnity set
forth in Section 6.8, effective upon Closing, Occidental, OCHC, OCC and Oxy CH
hereby unconditionally and irrevocably release and forever discharge, to the
full extent permitted by applicable law, on behalf of themselves and each of
their Affiliates, Oxy LP1, Oxy LP2 and Oxy GP and their successors and assigns,
from any and all rights of setoff or contribution for any liability of
Occidental, OCHC, OCC or Oxy CH.
6.7 [Intentionally Omitted].
6.8 Agreement Regarding OCC Indemnity. Effective as of the Closing,
Oxy LP2 shall indemnify OCC for any amount OCC is required to pay pursuant to
the OCC Indemnity.
6.9 Indemnity and Other Agreements Regarding Potential Loss of Units
Under Section 14 of the Partnership Agreement.
(a) The Parties hereby acknowledge and agree that:
(i) OCC owns the Lake Xxxxxxx Facility subject to the LC
Lease, a Petrochemical Plant Site Right of First Refusal Agreement
dated August 31, 1983 ("Plant ROFR") in favor of CITGO Petroleum
Corporation, a Delaware corporation ("CITGO"), and the Orange-Lake
Xxxxxxx Pipeline Right of First Refusal Agreement dated August 23,
1983 in favor of CITGO (together with the Plant ROFR, the
"ROFRs");
(ii) This Agreement does not constitute (A) the entering
into of any contract, agreement, Lease (as defined in each of the
ROFRs) or other arrangement to make any Disposition (as defined in
each of the ROFRs) or (B) the granting of an option or other right
to acquire or Lease (as defined in each of the ROFRs) the Lake
Xxxxxxx Facility or any part thereof or any interest therein;
(iii) This Agreement (A) shall not grant any rights
whatsoever to Purchaser with respect to the Lake Xxxxxxx Facility
other than indirect rights in the LC Lease and (B) is subject to,
and not superior to, CITGO's rights under the ROFRs; and
(iv) An independent third party appraiser has determined
that, as of the date of the Appraisal, the Lake Xxxxxxx Facility's
fair market value is $75 million, and the Parties have reflected
this valuation in the Plant Put Option Agreement.
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(b) If at any time prior to a Lease Termination Event the
Purchaser believes in good faith it would be in the best interests of the
Partnership, then OCC may make the Plant Transfer to the Partnership if
OCC's board of directors, in its sole discretion, elects to do so. In
such event, the Purchaser shall take all actions necessary to cause the
Partnership to accept the Plant Transfer that are within its control and
shall use commercially reasonable efforts to obtain from the Partnership
and any other partners of the Partnership all such actions by them as are
necessary for the Partnership to accept the Plant Transfer.
(c) (i) If there is a Lease Termination Event and (A) OCC or
one of its Affiliates owns the Lake Xxxxxxx Facility and (B) no
Person other than OCC, its Affiliates, the Partnership or the
Purchaser is entitled to use and operate the Lake Xxxxxxx
Facility, then the Parties shall use their commercially reasonable
efforts to agree, and to cause the Partnership to consent, to an
arrangement that provides for the use and operation of the Lake
Xxxxxxx Facility by the Purchaser or its designee on terms
reasonably acceptable to OCC and the Purchaser or its designee
(which may include formation of the LC Partnership (as defined in
the Partnership Agreement)).
(ii) If the Parties are unable to reach agreement as to
the arrangement described in Section 6.9(c)(i), then, upon the
Purchaser's request, OCC or one of its Affiliates shall operate or
hold the Lake Xxxxxxx Facility at the Purchaser's direction and
for the Purchaser's benefit and account. If the Purchaser does not
make such request, OCC or one of its Affiliates may operate the
Lake Xxxxxxx Facility for its own or its Affiliates' benefit and
account.
(d) At the Closing, the Parties shall execute and deliver the
Plant Put Option Agreement. The Plant Put Option Agreement shall provide,
among other things, that: (i) OCC shall have the right in its sole
discretion to consummate a Plant Transfer to the Purchaser or, at the
Purchaser's option, its designee (the "Put Right"); (ii) the Put Right
shall be exercisable for a period commencing on May 16, 2003 and
terminating on the earlier of the date that is (A) 60 days after the date
a Lease Termination Event occurs (unless one of the events described in
Section 6.9(e)(ii) or (iii) has occurred and is continuing, in which case
the 60-day time period shall be tolled while the events described in
Section 6.9(e)(ii) or (iii) are continuing), (B) the date of a No
Rebuilding Termination or (C) July 1, 2009; and (iii) the purchase price
to be paid by the Purchaser for the Plant Transfer shall be $75,000,000.
Upon consummation of the Plant Transfer as contemplated by this Section
6.9(d), the Parties acknowledge and agree that Section 14 of the
Partnership Agreement shall not be applicable.
(e) If there has been a Lease Termination Event and none of the
following has occurred and, in the case of clauses (ii) or (iii) below,
is continuing:
(i) the Plant Transfer as described under Section
6.9(b);
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(ii) an arrangement providing for the use and operation
of the Lake Xxxxxxx Facility by the Purchaser or its designee as
described under Section 6.9(c)(i) and such arrangement continues
to be in effect;
(iii) OCC or one of its Affiliates is operating or holding
the Lake Xxxxxxx Facility at the Purchaser's direction and for the
Purchaser's benefit and account as described under Section
6.9(c)(ii) and continues to do so (the event described in this
clause shall be deemed to have occurred and be continuing so long
as either (A) the Purchaser did not request such operation or
holding or (B) such operation or holding ceases because the
Purchaser or its designee so requests); or
(iv) the Put Right has been exercised and the closing has
occurred under the Plant Sale Agreement as described under Section
6.9(d);
then, on the date that none of Section 6.9(e)(i), (ii), (iii) or (iv) has
occurred and, in the case of clauses (ii) or (iii) above, is continuing,
the Occidental Parties shall promptly pay (and shall be jointly and
severally liable to promptly pay) to the Purchaser or its designee an
amount (the "Make Whole Amount") equal to the greater of (x) $75 million
in cash or (y) the Alternate Cash Consideration.
(f) The provisions of Sections 6.9(b), 6.9(c), 6.9(d), 6.9(e)
and 6.9(h) shall be the Purchaser's sole and exclusive remedy for any
loss of Units it or its Affiliates might incur as a result of the
operation of Section 14 of the Partnership Agreement or as a result of
the loss of the use and operation of the Lake Xxxxxxx Facility; provided,
however, that the exclusivity of these provisions with regard to first
party claims of the Purchaser shall not in any manner preempt or limit
any rights that the Purchaser and its Affiliates may have with respect to
Third Party Claims (as defined in the Parent Agreement) under Section 3.4
of the Parent Agreement or Third Party Claims under any analogous
provisions contained in this Agreement.
(g) Each of the Purchaser and the Occidental Parties shall
mitigate, and shall cause each of its respective Affiliates to mitigate,
any damages resulting from a loss of Units as a result of the operation
of Section 14 of the Partnership Agreement or from the loss of the use
and operation of the Lake Xxxxxxx Facility, by taking all actions which a
reasonable person would undertake to minimize or alleviate the amount of
such losses and the consequences thereof, as if such Person would be
required to suffer the entire amount of such losses and the consequences
thereof by itself, without recourse or any remedy against another Person,
including pursuant to the right of the Purchaser to receive the Make
Whole Amount hereunder.
(h) If there is a No Rebuilding Termination and as a result
thereof the Purchaser or any of its Affiliates suffers a loss of Units
pursuant to Section 14.3 of the Partnership Agreement, then, provided
that the Partnership has complied with its obligation to deliver the
related Proceeds to OCC under Section 12 or 13 of the LC Lease, as
applicable, the Occidental Parties shall pay the Purchaser the Make Whole
Amount.
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(i) As security for the Occidental Parties' obligations
pursuant to Sections 6.9(e) and 6.9(h), OCHC shall establish and fund the
Section 14 Escrow.
(j) The Parties and their respective Affiliates (including, for
these purposes, the Partnership to the extent any of such Persons have
the power to control the Partnership's actions) agree that in connection
with or otherwise in relation to any Lease Termination Event, they shall
not directly or indirectly take any action that is contrary to or
inconsistent with the provisions of this Section 6.9.
SECTION 7
ADDITIONAL AGREEMENTS REGARDING CERTAIN TAX MATTERS
---------------------------------------------------
7.1 Absence of Section 338(h)(10) Election. The Parties and Occidental
agree that, with respect to the purchase of the Oxy LP2 Shares and the Oxy GP
Shares, the Parties and Occidental shall not make an election or cause or permit
any of its Affiliates or its or their successors to make an election with
respect to Section 338(h)(10) of the Code or any comparable provision of
applicable law.
7.2 Absence of Tax Election As to Oxy LP1. The Occidental Parties
shall not, and shall not cause or permit any of their Affiliates to, make any
affirmative election for Oxy LP1 with respect to the conversion of Oxy LP1 to a
Delaware limited liability company to be treated as an association subject to
taxation as a corporation for purposes of the Code.
7.3 Tax Indemnification. Each Occidental Party shall jointly and
severally indemnify each Occidental Partner Sub, the Purchaser and the
Purchaser's Affiliates and hold them harmless from and against without
duplication, any Loss attributable to (i) all Taxes (or the non-payment thereof)
of any Occidental Partner Sub for all taxable periods ending on or before the
Closing Date and the portion through the end of the Closing Date for any taxable
period that includes (but does not end on) the Closing Date ("Pre-Closing Tax
Period"), (ii) all Taxes of any member (other than on Occidental Partner Sub) of
an affiliated, consolidated, combined or unitary group of which any Occidental
Partner Sub (or any predecessor of any of the foregoing) is or was a member on
or prior to the Closing Date, including pursuant to Treasury Regulation Section
1.1502-6 or any analogous or similar state, local or foreign law or regulation,
(iii) any and all Taxes of any Person (other than an Occidental Partner Sub)
imposed on any Occidental Partner Sub as a transferee or successor, by contract
or pursuant to any law, rule or regulation, which Taxes relate to an event or
transaction occurring before the Closing and (iv) arising by reason of any
breach by an Occidental Party of the representations contained in Section 4.7.
7.4 Tax Indemnification Duration. The obligations of the Occidental
Parties pursuant to Section 7.3 are unconditional and absolute and shall remain
in effect until audit, assessment and collection of any such Taxes are barred by
the applicable statute of limitations plus sixty days.
7.5 Straddle Periods. Occidental shall include the taxable income or
loss of Oxy LP1, Oxy LP2 and Oxy GP (including any deferred income triggered
into income under Treasury Regulation Sections 1.1502-13 and 1.1502-14 and any
excess loss accounts taken into income under Treasury Regulation Section
1.1502-1) on Occidental's consolidated federal income Tax
16
Returns for all periods through the Closing Date and pay any federal income
taxes attributable to such income. The income of Oxy LP1, Oxy LP2 and Oxy GP
will be apportioned through the period up to and including the Closing Date and
the period after the Closing Date by closing the books of Oxy LP1, Oxy LP2 and
Oxy GP as of the Closing Date. Notwithstanding the foregoing, however,
Occidental and the Purchaser agree that all transactions not in the ordinary
course of business occurring on the Closing Date after the Purchaser's purchase
of the Occidental Partner Subs shall be reported on the Purchaser's consolidated
federal income tax return to the extent permitted by Treasury Regulation Section
1.1502-76(b)(1)(ii)(B).
7.6 Responsibility for Filing Tax Returns for Periods through Closing
Date. For all taxable periods ending on or before the Closing Date, Occidental
shall cause the Occidental Partner Subs to join in Occidental's consolidated
federal income tax return, to join in any applicable combined or unitary state
Tax Return filed by Occidental (or an Affiliate) and, in jurisdictions requiring
separate reporting from Occidental, to file separate company state and local Tax
Returns. All such Tax Returns shall be prepared and filed in a manner consistent
with prior practice of the Partnership, except as required by a change in
applicable law or except as required for closing the books of Oxy LP1, Oxy LP2
and Oxy GP as of the Closing Date. The Purchaser shall cause the Partnership and
the Occidental Partner Subs to furnish information to Occidental as reasonably
requested by Occidental to allow Occidental to satisfy its obligations under
this Section 7.6 in accordance with past custom and practice, except that in no
event shall such requested information be furnished to Occidental any later than
the later of, (i) six months following the Closing Date or (ii) one month
following the date such information was requested. Except for items reported by
the Partnership, the Occidental Parties and their Affiliates shall not file any
Tax Return that departs from past practice that would have a material adverse
impact on the Tax attributes or liabilities of Oxy LP2 after the Closing Date.
The Purchaser shall include the Occidental Partner Subs in its combined or
consolidated income tax returns, for all periods other than periods ending on or
before the Closing Date. The Purchaser shall not cause any Occidental Partner
Sub to file any Tax Return for a Pre-Closing Tax Period.
7.7 Cooperation on Tax Matters.
(a) The Purchaser, Occidental Partner Subs and the Occidental
Parties shall cooperate fully, as and to the extent reasonably requested
by any other Party, in connection with the filing of Tax Returns pursuant
to this Section 7.7 and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon
any other Party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided pursuant
to this Section 7.7. The Occidental Parties agree, and shall cause their
Affiliates (including the Occidental Partner Subs), to retain all books
and records with respect to Tax matters pertinent to the Occidental
Partner Subs relating to any taxable period beginning before the Closing
Date until the expiration of the statute of limitations (and, to the
extent notified by the Purchaser any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing Authority.
17
(b) The Purchaser and the Occidental Parties further agree,
upon request, to use their best efforts to obtain any certificate or
other document from any governmental Authority or any other Person as may
be necessary to mitigate, reduce or eliminate any Taxes that could be
imposed (including with respect to the transactions contemplated hereby).
(c) The Purchaser and the Occidental Parties further agree,
upon request, to provide the other with all information that such Party
may be required to report pursuant to Section 6043 of the Code and all
Treasury Regulations promulgated thereunder.
7.8 Tax Sharing Agreements. All Tax sharing agreements or similar
agreements with respect to or involving the Occidental Partner Subs shall be
terminated as of the Closing Date and, after the Closing Date, the Occidental
Partner Subs shall not be bound thereby or have any liability thereunder.
7.9 Certain Taxes and Fees. All transfer, documentary, sales, use,
stamp, registration and other such Taxes, and all conveyance fees, recording
charges and other fees and charges (including any penalties and interest)
incurred in connection with consummation of the transactions contemplated by
this Agreement shall be paid 50% by the Occidental Parties or their Affiliate
and 50% by the Purchaser when due, and the Occidental Parties will, and will
cause their Affiliates to, at their own expense, file all necessary Tax Returns
and other documentation with respect to all such Taxes, fees and charges, and,
if required by applicable law, the Purchaser will, and will cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation.
7.10 Audits. Occidental shall fully inform Oxy LP2 regarding issues
raised during any audit of Occidental's consolidated federal income Tax Returns
to the extent that such returns and such issues relate to the Occidental Partner
Subs. Occidental shall not settle any such audit in a manner which would cause
Oxy LP2 to include a material item of income in its taxable income in a taxable
year ending after the Closing Date without: (i) paying to the Company an amount
equal to the present value (calculated using a discount rate equal to LIBOR plus
150 basis points) of the Tax attributable to such increase in taxable income; or
(ii) obtaining the prior written consent of the Company, which consent shall not
unreasonably be withheld.
7.11 Carrybacks. The Purchaser and its Affiliates agree to make a
proper and binding irrevocable election under Treasury Regulation Section
1.1502-21(b)(3)(ii)(B) on the Purchaser's consolidated federal income tax return
to waive the carryback of net operating losses of Oxy LP2 and Oxy GP to taxable
years in which Oxy LP2 and Oxy GP were members of Occidental's consolidated
federal income tax return.
7.12 Post Closing Elections. At the request of Occidental, the
Purchaser shall cause Oxy LP2 and Oxy GP to make or join with Occidental in
making any election if the making of such election does not have an adverse
impact on the Purchaser or any Occidental Partner Sub for any post-acquisition
Tax period.
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7.13 Consistent Tax Treatment. For all federal and state tax reporting
purposes, the Occidental Parties and the Purchaser shall maintain the following
positions (except to the extent that such Party receives an opinion from
nationally recognized tax counsel that, as a result of a change in applicable
law after the date hereof, there is no reasonable basis for maintaining such
position):
(a) The purchase and sale of the Oxy LP1 Interests, the Oxy LP2
Shares and the Oxy GP Shares are all taxable sales and none of such
transactions qualify for treatment as a "reorganization" within the
meaning of Section 368(a) of the Code; and
(b) For all purposes of Subchapter K of the Code, the past
practices used to allocate the recourse and nonrecourse liabilities of
the Partnership among its partners are proper.
7.14 Refunds. If the Purchaser or its Affiliate receives a Tax refund
with respect to Tax of an Occidental Partner Sub arising in a Pre-Closing Tax
Period, the Purchaser shall pay (or cause its Affiliate to pay), within the 30
calendar days following the receipt of such Tax refund, the amount of such Tax
refund to OCHC. If Occidental or its Affiliate receives a Tax refund with
respect to Tax of an Occidental Partner Sub arising in any Tax period other than
a Pre-Closing Tax Period, within 30 days following the receipt of such Tax
refund, Occidental or its Affiliate shall pay the amount of such Tax refund to
the Purchaser.
SECTION 8
CONDITIONS TO CLOSING
---------------------
8.1 Conditions Precedent to Obligations of Both 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 that 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 Partner Sub Stock; 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 each 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.
8.2 Conditions Precedent to Obligations of Occidental Parties. The
obligations of the Occidental Parties under this Agreement are subject to the
satisfaction (or written waiver by the Occidental Parties) 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 any Occidental Party, all representations and
warranties of the Purchaser contained in this Agreement that contain
qualifications and exceptions relating to materiality or a Purchaser
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 this Agreement 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 executed all agreements and
documents (including the Related Purchase 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 Purchaser Material Adverse Change.
(d) Third Party Consents. All Consents of any third party
listed on Schedule 8.2(d) shall have been obtained.
(e) Officer's Certificate. Occidental 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) Execution of Parent Agreement. The Purchaser shall have
executed a copy of the Parent Agreement pursuant to Section 2.2(e) of the
Parent Agreement and shall have complied with all other applicable
requirements of Section 2.2(e) of the Parent Agreement.
8.3 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:
(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 Occidental Parties contained in this Agreement 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
Occidental Parties contained in this Agreement 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; except that the representations
in Sections
20
4.5(a) through (e) as they relate to Oxy LP1 need not be true and correct
as of the Closing Date.
(b) Performance of Agreements. Each Occidental Party, Oxy LP2
and Occidental 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 Purchase
Agreements) to be performed, complied with or executed by it or them on
or prior to the Closing Date, including the covenants set forth in
Section 1.2.
(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) FIRPTA Affidavit. Each Occidental Party shall have
delivered to the Purchaser a non-foreign affidavit dated as of the
Closing Date, sworn under penalty of perjury and in form and substance
required under the Treasury Regulations issued pursuant to Section 1445
of the Code stating that such seller is not a "foreign person" as defined
in Section 1445 of the Code.
(e) Third Party Consents. All Consents of any third party
listed on Schedule 8.3(e) shall have been obtained.
(f) Officer's Certificate. The Purchaser shall have received a
certificate, dated the Closing Date from each Occidental Party, signed by
the President or a Vice President of the applicable Occidental Party, to
the effect that, to the knowledge of such officer, the conditions
specified in the above paragraphs have been fulfilled.
(g) Financing. The Purchaser shall have consummated the
transactions described in any definitive agreement referred to in Section
5.5 and the Purchaser shall have received the funds as provided therein.
SECTION 9
TERMINATION
-----------
9.1 General. This Agreement may be terminated and the transactions
contemplated herein may be abandoned at any time prior to the Closing:
(a) by the written consent of the Parties;
(b) by the Purchaser if there has been a material
misrepresentation or a breach of an agreement by any Occidental Party 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 8.3(a) or (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;
21
(c) by any Occidental Party 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 8.2(a) or (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 Purchaser or any Occidental Party 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 9.1(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 Purchaser or any
Occidental Party may terminate this Agreement as provided by Sections
9.1(b) or 9.1(c), respectively); or
(e) by any Party if it becomes impossible to satisfy any
condition to that party's performance set forth in Sections 8.2 or 8.3.
Any right of termination set forth above shall be exercised by written notice
from the terminating Party to each other Party.
9.2 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 Affiliates or their respective officers or directors;
provided, however, that upon any such termination, the obligations of the
Parties with respect to this Section 9.2 and Sections 11.6, 11.10, 11.11, 11.13
and 11.14 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 10
SURVIVAL AND INDEMNIFICATION
----------------------------
10.1 Survival.
(a) The representations and warranties of the Parties contained
in this Agreement or in any Related Purchase Agreement shall not survive
the Closing, except that (i) the representations and warranties contained
in Sections 4.5 and 4.6 shall survive indefinitely, together with any
associated right of indemnification pursuant to Section 10.3, (ii) the
representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.4,
5.1, 5.2, 5.3, 5.4, 5.6, 5.7 and 5.8 shall survive two years after the
Closing, and shall thereafter terminate, together with any associated
right of indemnification pursuant to Sections 10.2 or 10.3 and (iii) the
representations and warranties relating to Taxes or contained in Section
4.7 shall survive until expiration of the applicable statutory period of
limitations (giving effect to any waiver, mitigation or extension
thereof), and shall thereafter
22
terminate, and the associated right of indemnification pursuant to
Section 10.3 shall terminate at the end of the period set forth in
Section 7.4.
(b) Except as expressly provided in this Agreement, the
covenants and agreements of the Parties contained in this Agreement or in
any Related Purchase Agreement shall not be limited or affected by any
investigation undertaken by a Party, and shall survive indefinitely,
together with any associated right of indemnification.
10.2 Indemnification by the Purchaser.
(a) From and after the Closing, the Purchaser shall indemnify,
defend and hold harmless the Occidental 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 Occidental Parties have Knowledge as
of the Closing Date or (ii) under Section 10.2(a)(i) unless the aggregate
of all Losses for which the Purchaser would, but for this Section
10.2(b)(i), be liable exceeds on a cumulative basis an amount equal to 1%
of the purchase price paid pursuant to Section 2.2; provided, however,
that after such amount is reached the Purchaser shall be responsible for
the full amount of such Loss.
10.3 Indemnification by the Occidental Parties.
(a) From and after the Closing, the Occidental Parties 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
Occidental Parties in this Agreement that survives the Closing;
and
(ii) any breach of any covenant or agreement of the
Occidental Parties in this Agreement.
(b) Notwithstanding the foregoing, the Occidental Parties 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 10.3(a)(i) unless the aggregate
of all Losses for which the Occidental Parties
23
would, but for this Section 10.3(b)(i), be liable exceeds on a cumulative
basis an amount equal to 1% of the purchase price paid pursuant to
Section 2.2; provided, however, that after such amount is reached the
Occidental Parties shall be responsible for the full amount of such Loss.
10.4 Mutual Indemnity. From the date hereof through the twenty-first
anniversary hereof:
(a) The Purchaser hereby agrees to the fullest extent permitted
by applicable law, to indemnify, defend and hold harmless the Occidental
Indemnified Parties from, against and in respect of any Loss incurred by
any of the Occidental Indemnified Parties arising out of, in connection
with, or relating to, any Third Party Claim (whether in contract, tort,
statute or otherwise) arising out of, in connection with, or relating to
the failure of the Purchaser or any of its Affiliates to give notice to,
obtain any consent of, or obtain any waiver by, or any breach by the
Purchaser or any of its Affiliates of any obligation owing to, any
Person, in each case with respect to the Purchaser or its Affiliates'
entering into this Agreement or performing their respective obligations
hereunder.
(b) Each of the Occidental Parties agrees, and Occidental
agrees, to the fullest extent permitted by applicable law, to indemnify,
defend and hold harmless the Purchaser Indemnified Parties from, against
and in respect of any Loss incurred by any of the Purchaser Indemnified
Parties arising out of, in connection with, or relating to, any Third
Party Claim (whether in contract, tort, statute or otherwise) arising out
of, in connection with, or relating to the failure of an Occidental Party
or any of its Affiliates to give notice to, obtain any consent of, or
obtain any waiver by, or any breach by an Occidental Party or any of its
Affiliates of any obligation owing to, any Person, in each case with
respect to such Occidental Party's or its Affiliates' entering into this
Agreement or performing their respective obligations hereunder.
10.5 Mitigation; Limitation on Consequential, Punitive and Exemplary
Damages; Exclusive Remedy.
(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
10 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 10 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
24
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 10, as limited by and subject to the provisions of this
Section 10, 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 Purchase
Agreement.
10.6 EXTENT OF INDEMNIFICATION. WITHOUT LIMITING OR ENLARGING THE SCOPE
OF THE INDEMNIFICATION OBLIGATIONS SET FORTH HEREIN, TO THE FULLEST EXTENT
PERMITTED BY LAW, AN INDEMNIFIED PARTY SHALL BE ENTITLED TO INDEMNIFICATION
UNDER SECTION 10.4 IN ACCORDANCE WITH THE TERMS HEREOF, REGARDLESS OF WHETHER
THE INDEMNIFIABLE LOSS GIVING RISE TO ANY SUCH INDEMNIFICATION OBLIGATION IS THE
RESULT OF THE SOLE, GROSS, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR VIOLATION OF ANY LAW OF OR BY ANY
SUCH INDEMNIFIED PARTY. THE PARTIES AGREE THAT THIS STATEMENT CONSTITUTES A
CONSPICUOUS LEGEND.
10.7 Procedures.
(a) In order for an Indemnified Party to be entitled to any
indemnification provided for under Sections 7.3, 10.2 and 10.3, 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 10.7(a) 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 11.10, 11.13 and 11.14.
(b) If an Indemnified Party is notified of a Third Party Claim
which may give rise to a claim for indemnification against any
Indemnifying Party under Section 10.4, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing (including
copies of all papers served with respect to such Third Party Claim),
which notice shall describe in reasonable detail the nature of the Third
Party Claim, an estimate of the amount of damages attributable to such
Third Party 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 10.6(b) except to the extent
that such
25
failure prejudices or impairs, in any material respect, any of the rights
or obligations of the Indemnifying Party.
(c) Any Indemnifying Party may, and at the request of the
Indemnified Party shall, participate in and control the defense of the
Third Party Claim with counsel of its choice reasonably satisfactory to
the Indemnified Party. The Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Party unless (i) the employment thereof
has been specifically authorized in writing by the Indemnifying Party,
(ii) the Indemnifying Party failed to assume the defense and employ
counsel or failed to diligently prosecute or settle the Third Party Claim
or (iii) there shall exist or develop a conflict that would ethically
prohibit counsel to the Indemnifying Party from representing the
Indemnified Party. If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim that the Indemnifying Party
elects to contest, including, without limitation, by making any
counterclaim against the person or entity asserting the Third Party Claim
or any cross-complaint against any person or entity, in each case only if
and to the extent that any such counterclaim or cross-complaint arises
from the same actions or facts giving rise to the Third Party Claim. The
Indemnifying Party shall be the sole judge of the acceptability of any
compromise or settlement of any claim, litigation or proceeding in
respect of which indemnity may be sought hereunder, provided that the
Indemnifying Party shall give the Indemnified Party reasonable prior
written notice of any such proposed settlement or compromise and will not
consent to the entry of any judgment or enter into any settlement with
respect to any Third Party Claim without the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld. The
Indemnifying Party (if the Indemnified Party is entitled to
indemnification hereunder) shall reimburse the Indemnified Party for its
reasonable out of pocket costs incurred with respect to such cooperation.
(d) If the Indemnifying Party fails to assume the defense of a
Third Party Claim within a reasonable period after receipt of written
notice pursuant to the first sentence of subparagraph (c), or if the
Indemnifying Party assumes the defense of the Indemnified Party pursuant
to subparagraph (c) but fails to diligently prosecute or settle the Third
Party Claim, then the Indemnified Party shall have the right to defend,
at the sole cost and expense of the Indemnifying Party (if the
Indemnified Party is entitled to indemnification hereunder), the Third
Party Claim by all appropriate proceedings, which proceedings shall be
promptly and vigorously prosecuted by the Indemnified Party to a final
conclusion or settled. The Indemnified Party shall have full control of
such defense and proceedings; provided that the Indemnified Party shall
not settle such Third Party Claim without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this Section,
and the Indemnifying Party shall bear its own costs and expenses with
respect to such participation.
26
(e) Notwithstanding the other provisions of this Section 10.7,
if the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Section 10.7 and if such dispute is resolved
in favor of the Indemnifying Party, the Indemnifying Party shall not be
required to bear the costs and expenses of the Indemnified Party's
defense pursuant to this Section 10.7 or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full for all
costs and expenses of the litigation concerning such dispute. If a
dispute over potential liability is resolved in favor of the Indemnified
Party, the Indemnifying Party shall reimburse the Indemnified Party in
full for all costs of the litigation concerning such dispute.
(f) After it has been determined, by acknowledgment, agreement,
or ruling of court of law, that an Indemnifying Party is liable to the
Indemnified Party under this Section 10, the Indemnifying Party shall pay
or cause to be paid to the Indemnified Party the amount of the Loss
within ten Business Days of receipt by the Indemnifying Party of a notice
reasonably itemizing the amount of the Loss but only to the extent
actually paid or suffered by the Indemnified Party.
(g) In the event a Third Party Claim is brought in which the
liability as between the Purchaser and an Occidental Party or its
Affiliates is alleged to be joint or in which the entitlement to
indemnification under this Section 10 has not been determined, the
Purchaser and the appropriate Occidental entity shall cooperate in the
joint defense of such Third Party Claim and shall offer to each other
such assistance as may reasonably be requested in order to ensure the
proper and adequate defense of any such matter. Such joint defense shall
be under the general management and supervision of the Party which is
expected to bear the greater share of the liability, unless otherwise
agreed; provided, however, that no Party shall settle or compromise any
such joint defense matter without the consent of the other Parties, which
consent shall not be unreasonably withheld or delayed. Any uninsured
costs of such joint defense shall be borne as the Parties may agree,
provided, however, that in the absence of such agreement, the defense
costs shall be borne by the Party incurring such costs; provided,
further, that, if it is determined that one Party was entitled to
indemnification under this Section 10, the other Parties shall reimburse
the Party entitled to indemnification for all of its costs incurred in
connection with such defense.
10.8 Termination of Indemnification. The obligations to indemnify and
hold harmless any Party pursuant to Section 10.2 and 10.3 shall terminate when
the applicable representation, warranty or covenant 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 10.7 to the Indemnifying Party (which notice shall identify the
representation or warranty claimed to have been inaccurate, or the covenant
claimed to have been breached, and shall state with reasonable particularity the
nature of the asserted inaccuracy or breach).
27
SECTION 11
MISCELLANEOUS
-------------
11.1 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.
11.2 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 and stockholders) shall have any right, claim or cause of
action under or by virtue of this Agreement.
11.3 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 Purchaser:
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:
Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy Number: 000-000-0000
and:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy Number: 000-000-0000
28
If to an Occidental Party:
such Occidental Party
c/o Occidental Chemical Holding Corporation
0000 XXX Xxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Telecopy Number: 000-000-0000
If to Occidental:
Occidental Petroleum Corporation
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 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 11.3.
11.4 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.
11.5 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
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.
29
11.6 Confidentiality Agreement.
(a) Nothing in this Agreement shall be construed as impairing
or otherwise limiting the obligations assumed pursuant to any
confidentiality agreement between the parties hereto.
(b) In addition to the obligations of each Party set forth in
Section 11.6(a), each Occidental Party, from and after the Closing, with
respect to itself and to its Affiliates, agrees and covenants with the
Purchaser 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 Occidental Partner Subs and all information relating to
the operations and business of the Partnership, except, in each case, as
required by applicable law or administrative process (to the extent so
required) (in which case the legally obligated Occidental Party shall
promptly notify the Purchaser and give the Purchaser 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 11.6(b). The
covenants set forth in this Section 11.6(b) shall be effective as of
Closing Date and shall terminate ten years after the Closing Date.
11.7 Entire Agreement. This Agreement sets forth the entire agreement
and understanding among the Parties as to the subject matter hereof and merges
and supercedes all their prior discussions, agreements and understandings
related to this subject matter.
11.8 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 and Schedules
shall be deemed to be references to Sections of, and Appendices and Schedules
to, this Agreement unless the context shall otherwise require; (vii) all
Appendices and Schedules 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.
30
11.9 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.
11.10 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.
11.11 Transaction Costs. Each Party shall be solely responsible for and
bear all of its own respective costs, fees and expenses.
11.12 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 or 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.
11.13 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY OR ANY DISPUTE UNDER OR 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.
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11.14 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Special Joinder by Oxy LP2. Oxy LP2 is a party to this Agreement
for the sole purpose of evidencing its agreement to be bound by the provisions
set forth in Section 6.8 and shall not have any rights under this Agreement or
any other obligations under this Agreement.
11.16 Special Joinder by Occidental. Occidental is a party to this
Agreement for the sole purpose of evidencing its agreement to be bound by the
provisions set forth in Sections 6.6, 6.8, 7, 10.4 and 10.7 and shall not have
any rights under this Agreement or any other obligations under this Agreement.
11.17 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.
32
IN WITNESS WHEREOF, this Occidental Partner Sub 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/ J. R. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
OXY CH CORPORATION
By: /s/ J. R. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL CORPORATION
By: /s/ J. R. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
SPECIAL JOINDER PURSUANT TO SECTION 11.15
OCCIDENTAL PETROCHEM PARTNER 2, INC.
By: /s/ J. R. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
SPECIAL JOINDER PURSUANT TO SECTION 11.16
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ J. R. XXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
APPENDIX A
TO
OCCIDENTAL PARTNER SUB PURCHASE AGREEMENT
DEFINITIONS
-----------
"$75 Million Note" shall mean that certain Unsecured Promissory Note
dated as of the Closing Date by OCHC in the amount of $75 million.
"1999 Indemnity Letter Agreement" shall mean the Letter Agreement dated
as of February 16, 1999 between the Partnership and OCC providing for the OCC
Indemnity.
"1999 OCC Indemnity" shall have the meaning set forth in the 1999
Indemnity Letter Agreement.
"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 Purchaser or of an Occidental Party. 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.
"Affiliated Group" shall mean any affiliated group within the meaning of
Section 1504(a) of the Code or any similar group defined under a similar
provision of state, local or foreign law.
"Agent" shall have the meaning set forth in Section 11.13.
"Agreement" shall mean this Occidental Partner Sub Purchase Agreement
entered into between the Parties as of the date hereof.
"Alternate Cash Consideration" shall mean the greatest of: (a) a cash
payment equal to 5.4 million shares of Lyondell Common Stock multiplied by the
Applicable Price of such shares on the effective date of the Lease Termination
Event; provided, however, that such cash payment obligation may be satisfied in
accordance with the terms of Section 5.8 of the Securities Purchase Agreement;
or (b) if there is a No Rebuilding Termination, the Proceeds.
"Applicable Price" shall mean, for any shares at any date, the average of
the Daily Prices for such shares for the 10 consecutive Business Days
immediately preceding such date.
"Appraisal" shall mean the American Appraisal Associates appraisal of the
Lake Xxxxxxx Facility prepared for Occidental dated February 21, 2002.
"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).
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"Business Day" shall mean any day the New York Stock Exchange, Inc. is
open for business.
"CITGO" shall have the meaning set forth in Section 6.9(a)(ii).
"Closing" shall mean the closing of the transactions contemplated by this
Agreement.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"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 in connection
with (i) the execution and delivery of this Agreement or (ii) the consummation
of any of the transactions provided for hereby.
"Daily Price" shall mean, on any day, the average (calculated to the
nearest thousandth) of the high and low per share sales prices of Lyondell
Common Stock for such day for sales conducted regular way on the New York Stock
Exchange, Inc., as such prices are reported on xxx.xxxxxxx.xxx or, if not
reported thereby, another authoritative source.
"Encumbrance" shall mean any preferential right, lien, charge,
encumbrance, security interest, title defect, option or any other restriction or
third-party right.
"Escrow Agent" shall mean The Bank of New York.
"Escrow Agreement" shall mean that certain Escrow Agreement substantially
in the form of Exhibit A to be entered into as of the Closing Date between the
Escrow Agent, OCHC and the Purchaser.
"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 (ii) the consummation of any of the transactions provided for
hereby.
"First OCC Interim Indemnity" shall have the meaning set forth in the
1999 Indemnity Letter Agreement.
"GAAP" shall mean United States generally accepted accounting principles.
"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 the facilities or any
other asset 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.
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"Indemnified Parties" shall mean the Purchaser Indemnified Parties and
the Occidental Indemnified Parties.
"Indemnifying Parties" shall mean the Party against whom indemnity is
sought.
"Knowledge" shall mean with respect to any Party, the actual knowledge
of any of its corporate officers.
"Lake Xxxxxxx Facility" means the Plant Site, Plant, Pipeline and the
Other Assets (each as defined in the LC Lease).
"LC Lease" shall mean that certain Lease Agreement dated May 15, 1998
between OCC, as lessor, and Oxy LP1, as lessee.
"Lease Termination Event" shall mean any time that the LC Lease is
terminated, expires or is otherwise not in force and effect (other than a No
Rebuilding Termination), as such is interpreted in the Partnership Agreement.
"Legal Requirement" shall mean any law, statute, rule, ordinance,
decree, regulation, requirement, temporary or permanent injunction order or
judgment of any Authority including the terms of any Government License.
"Loss" shall have the meaning set forth in Section 10.2(a).
"Lyondell" shall mean Lyondell Chemical Company, a Delaware corporation.
"Lyondell Common Stock" shall mean the shares of common stock of Lyondell
that are traded on the New York Stock Exchange, Inc.
"Make Whole Amount" shall have the meaning set forth in Section 6.9(e).
"Millennium" shall mean Millennium Chemicals, Inc., a Delaware
corporation.
"No Rebuilding Termination" shall have the meaning set forth in the
Partnership Agreement.
"Notice" shall have the meaning set forth in Section 11.3.
"OCC" shall have the meaning set forth in the preamble to this Agreement.
"OCC Indemnity" shall mean at any time whichever, if any, is then
outstanding of the 1999 OCC Indemnity, the First OCC Interim Indemnity and the
Second OCC Interim Indemnity.
"Occidental" shall mean Occidental Petroleum Corporation, a Delaware
corporation.
"Occidental Affiliated Group" shall have the meaning set forth in Section
4.7(h).
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"Occidental Indemnified Parties" shall mean the Occidental Parties and
their Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives.
"Occidental Material Adverse Change" shall mean a material adverse change
in the financial condition, results of operations, assets or business of the
Partnership or the Occidental Partner Subs (including their interest in the
Partnership), 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 Partnership
and industry participants whose businesses are comparable thereto in a
substantially similar way.
"Occidental 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 Occidental Partner Subs (including their interest in the
Partnership), taken as a whole or (ii) the ability of Occidental or any
Occidental Party to perform its obligations under this Agreement.
"Occidental Parent" shall have the meaning set forth in the recitals to
this Agreement.
"Occidental Parties" shall mean OCHC, Oxy CH and OCC and, for purposes of
Sections 6.6, 6.9, 7, 10.4 and 10.7, Occidental and, for purposes of Section
6.8, Oxy LP2.
"Occidental Partner Subs" shall have the meaning set forth in the
recitals to this Agreement.
"OCHC" shall have the meaning set forth in the preamble to this
Agreement.
"Oxy CH" shall have the meaning set forth in the preamble to this
Agreement.
"Oxy GP" shall have the meaning set forth in the recitals to this
Agreement.
"Oxy GP Shares" shall mean all of the issued and outstanding shares of
common stock, par value $1.00 per share, of Oxy GP as of the date hereof.
"Oxy LP1" shall have the meaning set forth in the recitals to this
Agreement.
"Oxy LP1 Interests" shall mean all of the issued and outstanding limited
liability company interests of Oxy LP1 as of Closing.
"Oxy LP1 Shares" shall mean all of the issued and outstanding shares of
common stock, par value $1.00 per share, of Oxy LP1 as of the date hereof.
"Oxy LP2" shall have the meaning set forth in the recitals to this
Agreement.
"Oxy LP2 Shares" shall mean all of the issued and outstanding shares of
common stock, par value $1.00 per share, of Oxy LP2 as of Closing.
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"Parent" shall have the meaning set forth in the recitals to this
Agreement.
"Parent Agreement" shall mean the Amended and Restated Parent Agreement
dated May 15, 1998 among OCC, Oxy CH, Occidental, Lyondell, Millennium and the
Partnership, as amended by a First Amendment to Amended and Restated Parent
Agreement dated June 30, 1998 and modified by an Assignment and Assumption
Agreement dated June 19, 1998 among OCC, Oxy CH and OCHC.
"Parties" shall mean the Purchaser and the Occidental Parties.
"Partner Sub Stock" shall mean (i) for purposes of the date hereof, the
Oxy LP1 shares, Oxy LP2 Shares and Oxy GP Shares and (ii) for purposes of the
Closing Date, the Oxy LP1 Interests, Oxy LP2 Shares and Oxy GP Interests.
"Partnership" shall have the meaning set forth in the recitals to this
Agreement.
"Partnership Agreement" shall mean the Amended and Restated Partnership
Agreement of the Partnership dated as of August 24, 2001.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization.
"Plant Put Option Agreement" shall mean that certain Option to Sell
Petrochemical Plant Agreement substantially in the form of Exhibit B to be
entered into as of the Closing Date between OCC and the Purchaser.
"Plant ROFR" shall have the meaning set forth in Section 6.9(a)(i).
"Plant Sale Agreement" shall mean that certain Purchase and Sale
Agreement for the Lake Xxxxxxx Facility the form of which is attached to the
Plant Put Option Agreement.
"Plant Transfer" shall mean the conveyance of the Lake Xxxxxxx Facility
under and pursuant to the Plant Sale Agreement.
"Pre-Closing Tax Period" shall have the meaning set forth in Section 7.3.
"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.
"Proceeds" shall have the meaning set forth in the Partnership Agreement.
"Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
"Purchaser Indemnified Parties" shall mean the Purchaser and its
Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives.
"Purchaser Material Adverse Change" shall mean a material adverse change
in the financial condition, results of operations, assets or business of the
Purchaser and its Subsidiaries taken as a whole, excluding changes resulting
from (i) economic or political conditions that
A-5
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 Purchaser and its Subsidiaries
taken as a whole and industry participants whose businesses are comparable
thereto in a substantially similar way.
"Purchaser 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 Purchaser and its Subsidiaries taken as a whole or (ii) the
ability of the Purchaser to perform its obligations under this Agreement.
"Put Right" shall have the meaning set forth in Section 6.9(d).
"Related Purchase Agreements" shall mean the Escrow Agreement, the Plant
Put Option Agreement and the $75 Million Note.
"ROFRs" shall have the meaning set forth in Section 6.9(a)(i).
"Second OCC Interim Indemnity" shall have the meaning set forth in the
1999 Indemnity Letter Agreement.
"Section 14 Escrow" shall mean the escrow account established pursuant to
the Escrow Agreement attached hereto as Exhibit A and containing the $75 Million
Note.
"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.
"Tax" shall mean all taxes, charges, fees, levies or other assessment
imposed by any tax Authority, including, but not limited to, income, surtax,
remittance taxes, gross receipts, excise, profits, premium, property, sales,
use, transfer, occupation, employment, unemployment, disability, payroll,
license, ad valorem, value added, withholding, social security, registration,
national insurance (or other similar contributions or payments), stamp taxes,
customs duty, environmental taxes (including taxes under Section 59A of the
Code), capital stock, franchise, severance, alternative or add-on minimum tax,
estimated taxes, and any similar taxes (including any interest, fines, penalties
or additions attributable to, or imposed on or with respect to, any such taxes,
charges, fees, levies or other assessments).
"Tax Return" shall mean any return, form, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Termination Date" shall have the meaning set forth in Section 9.1(d).
"Third Party Claim" shall mean any allegation, claim, civil or criminal
action, proceeding, charge or prosecution brought by a person other than the
Partnership, any of its partners or their respective Affiliates.
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"Transfer" shall mean to sell, assign or otherwise in any manner dispose
of, whether by act, deed, merger or otherwise. The defined term "Transfer" is
used herein both as a noun and as a verb.
"Units" shall mean units representing interests in the Partnership as
provided for in the Partnership Agreement.
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