EXHIBIT 10.2
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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(c) Tax Returns - Filings and Audits
Schedule 4.7(e) Tax Basis
Schedule 4.7(f) Tax Returns
Schedule 4.7(h) Payment of Taxes
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
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
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
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
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 underss.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 (S).1445 of the Code stating that
such seller is not a "foreign person" as defined in (S).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, 11.11, 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.
31
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
/s/ T. Xxxxx XxXxxxxx
By: ________________________________________
Name: T. Xxxxx XxXxxxxx
Title: Senior Vice President, Chief
Financial Officer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
/s/ Xxxxx X. Xxxxxx
By: ________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
OXY CH CORPORATION
/s/ Xxxxx X. Xxxxxx
By: ________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL CORPORATION
/s/ Xxxxx X. Xxxxxx
By: ________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
SPECIAL JOINDER PURSUANT TO
SECTION 11.15
OCCIDENTAL PETROCHEM PARTNER 2, INC.
/s/ Xxxxx X. Xxxxxx
By: ________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
SPECIAL JOINDER PURSUANT TO
SECTION 11.16
OCCIDENTAL PETROLEUM CORPORATION
/s/ Xxxxx X. Xxxxxx
By: ________________________________________
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).
A-1
"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.
A-2
"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).
A-3
"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.
A-4
"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.
A-6
"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.
A-7
SCHEDULES
to
OCCIDENTAL PARTNER SUB PURCHASE AGREEMENT
1.2 ORGANIZATION, CAPITALIZATION, TITLE
1.2(a) and (b) Organization, Capitalization and Title - Oxy LP1:
OXY LP1: Occidental Petrochem Partner 1, Inc.
Delaware limited liability company
[capitalization to come before Closing]
1.2(d) Encumbrances - Partner Sub Stock at Closing:
Section 14 of the Partnership Agreement
The Parent Agreement
2.2 ALLOCATION OF PURCHASE PRICE
Amount to be delivered at Closing:
OCC $ 98,783,728.81
Oxy CH 341,226,271.19
===============
Total $440,010,000.00
4 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF OCCIDENTAL PARTIES
4.5(a) and (b) Organization, Capitalization and Title - Occidental Partner
Subs at Signing:
OXY LP1: Occidental Petrochem Partner 1, Inc.
Delaware corporation
1000 shares of common stock, par value $1.00, issued and
outstanding.
Schedules-1
OXY LP2: Occidental Petrochem Partner 2, Inc.
Delaware corporation
1000 shares of common stock, par value $1.00, issued and
outstanding.
OXY GP: Occidental Petrochem Partner GP, Inc.
Delaware corporation
1000 shares of common stock, par value $1.00, issued and
outstanding.
4.5(d) Encumbrances - Partner Sub Stock at Signing:
Section 14 of the Partnership Agreement
The Parent Agreement
4.5(f) Contracts and Agreements:
The Related Agreements (as defined in the Master Transaction
Agreement dated May 15, 1998 between the Partnership, Occidental,
Lyondell and Millennium) to which an Occidental Partner Sub is a
party.
4.6 Encumbrances and Transfer Restrictions - Units:
The Partnership Agreement
4.6 PARTNERSHIP UNITS
OXY LP1: 6,623 Units
OXY LP2: 22,876 Units
OXY GP: 1 Unit
4.7(e) TAX BASIS
OXY LP1: (i) $0
(ii) $0
(iii) $0
OXY LP2: (i) $0
(ii) $0
(iii) $0
Schedules-2
OXY LP3: (i) $0
(ii) $0
(iii) $0
5 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
None.
5.5 FINANCING
The Securities Purchase Agreement dated July 8, 2002 between Lyondell and
OCHC providing for the sale of Lyondell securities and contingent
consideration to OCHC for an aggregate purchase price of $440,000,000.
8.2(d) OCCIDENTAL CONSENTS
None.
8.3(e) PURCHASER CONSENTS
None.
Schedules-3
