EXHIBIT 4.1
EXHIBIT A
TO SECURITIES
PURCHASE AGREEMENT
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL FOR THE
HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
ON TRANSFER SET FORTH IN A STOCKHOLDERS AGREEMENT. NO TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS
AND CONDITIONS OF SUCH STOCKHOLDERS AGREEMENT HAVE BEEN COMPLIED WITH IN FULL
AND NO PERSON MAY REQUEST THE COMPANY TO RECORD THE TRANSFER OF ANY SUCH
SECURITIES IF SUCH TRANSFER IS IN VIOLATION OF SUCH STOCKHOLDERS AGREEMENT. A
COPY OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
LYONDELL CHEMICAL COMPANY
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK,
PAR VALUE $1.00 PER SHARE
Issued _________, 2002
(Subject to Adjustment)
No. [___] 5,000,000 Shares
THIS CERTIFIES THAT, for value received, Occidental Chemical Holding
Corporation, a California corporation, the registered holder hereof (the
"Holder"), is entitled to subscribe for and purchase from LYONDELL CHEMICAL
COMPANY, a Delaware corporation (the "Company"), upon the terms and conditions
set forth herein, at any time or from time to time, during the Exercise Period,
5 million fully paid and nonassessable shares of Original Common Stock (each
share, a "Warrant Share") of the Company, at the Exercise Price, as such number
of shares and Exercise Price may be adjusted pursuant to Section 4. This Warrant
is the warrant issued pursuant to the Securities Purchase Agreement.
This Warrant is being executed contemporaneously with the Stockholder
Agreement. Neither this Warrant, the Warrant Shares nor the Net Payment Shares
may be sold or transferred except in accordance with the legend above and the
terms and provisions of the Stockholder Agreement.
1. Certain Definitions.
As used in this Warrant, the following terms shall have the following
respective meanings:
"15-Day Price" shall have the meaning set forth in Section 4(a).
"Agent" shall have the meaning set forth in Section 12(m).
"Aggregate Exercise Price" shall mean (i) if the Company does not elect to
exercise its Net Payment Right, an amount equal to the Exercise Price multiplied
by the number of Warrant Shares for which this Warrant is being exercised or
(ii) if the Company elects to exercise its Net Payment Right as to a portion of
the Warrant exercised, an amount equal to (x) the Exercise Price multiplied by
(y) the number of Warrant Shares for which this Warrant is being exercised minus
the number of Warrant Shares for which the Company exercises its Net Payment
Right.
"Business Day" shall mean any day on which the NYSE is open for trading.
"Company" shall mean Lyondell Chemical Company, a Delaware corporation, or
any Surviving Entity (as defined in the Stockholder Agreement).
"Company Election Notice" shall have the meaning set forth in Section 2(a).
"Corporate Change" shall have the meaning set forth in Section 4(d).
"Daily Price" shall mean, on any day, the average (calculated to the
nearest thousandth) of the high and low per share sales prices of Original
Common Stock on such day for sales conducted regular way on the NYSE (as
reported on xxx.xxxxxxx.xxx or, if not reported thereby, another authoritative
source).
"Exercise Date" shall mean any date on which the Holder delivers an
Exercise Notice to the Company.
"Exercise Notice" shall mean an exercise notice substantially in the form
attached hereto as Exhibit A.
"Exercise Period" shall mean the period commencing the Issue Date and
ending at 5:00 p.m., Houston, Texas time, on the fifth anniversary thereof.
"Exercise Price" shall mean $25 per Warrant Share, as adjusted pursuant to
Section 4.
"Holder" shall mean Occidental Chemical Holding Corporation, a California
corporation, and shall include its permitted successors and assigns.
"Issue Date" shall mean ______________, 2002.
"Net Payment" shall mean an amount equal to (x) the excess, if any, of the
Daily Price on the Exercise Date to which the Net Payment relates over the
Exercise Price as of such Exercise
-2-
Date, multiplied by (y) the number of Warrant Shares for which the Company
exercises its Net Payment Right.
"Net Payment Right" shall have the meaning set forth in Section 2(b).
"Net Payment Shares" shall have the meaning set forth in Section 2(b).
"Notice" shall have the meaning set forth in Section 12(d).
"NYSE" shall mean the New York Stock Exchange, Inc.
"Occidental" shall mean Occidental Petroleum Corporation, a Delaware
corporation.
"Original Common Stock" shall mean shares of the series of common stock,
$1.00 par value per share, of the Company in existence on the date hereof that
is not Series B Common Stock.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization.
"PIK Dividend," with respect to the Series B Common Stock, shall have the
meaning set forth in the Amended and Restated Certificate of Incorporation of
Lyondell Chemical Company that was filed with the Secretary of State of the
State of Delaware on ______________, 2002.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of the Issue Date among the Company and the Holder.
"Related Securities Agreements" shall mean the Stockholder Agreement, the
Securities Purchase Agreement and the Registration Rights Agreement.
"Securities Purchase Agreement" shall mean that certain Securities Purchase
Agreement, dated July 8, 2002, by and between the Company and Occidental
Chemical Holding Corporation.
"Series B Common Stock" shall mean shares of Series B Common Stock, $1.00
par value per share, of the Company.
"Stockholder Agreement" shall mean that certain Stockholders Agreement
dated as of the Issue Date by and among the Company and the Stockholders (as
defined therein).
"Subsidiary" shall mean, with respect to a Holder, any Person of which such
Holder, either directly or indirectly, owns 50% or more of the equity or voting
interests.
"Transfer" shall have the meaning set forth in the Stockholder Agreement.
"Transfer Notice and Adoption Agreement" shall mean a transfer notice and
adoption agreement substantially in the form attached hereto as Exhibit B.
"Warrant" shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of exercise or Transfer of this Warrant in
whole or in part.
-3-
"Warrant Share" shall have the meaning set forth in the first paragraph
hereof.
"Wholly Owned Affiliate," with respect to any party, shall mean any
Affiliate of such party that is wholly owned, directly or indirectly, by such
party's ultimate parent entity.
2. Method of Exercise; Company's Net Payment Option; Certificates and New
Warrant.
(a) Exercise. Subject to compliance with applicable securities laws,
this Warrant may be exercised during the Exercise Period, in whole or in part,
by delivering a signed and completed Exercise Notice. Within two Business Days
after receiving a signed and completed Exercise Notice, the Company shall notify
the Holder of whether it will issue Warrant Shares or make a Net Payment in lieu
of issuing Warrant Shares for all or any portion of the Warrant exercised (the
"Company Election Notice"); provided, however, that if the Company does not
deliver a Company Election Notice within such two Business Day period, the
Company shall be required to (i) exercise its Net Payment Right with respect to
all of the Warrant Shares covered by the applicable Exercise Notice and (ii)
satisfy such Net Payment with cash. If the Company elects to exercise its Net
Payment Right, the Company Election Notice shall state the number of Warrant
Shares to which such Net Payment Right will apply and the form of such Net
Payment. Within three Business Days after delivery of a Company Election Notice
(or, if the Company does not deliver a Company Election Notice, within five
Business Days after delivery of an Exercise Notice), the Holder shall complete
its exercise of this Warrant by surrender of this Warrant to the Company at its
principal office, or at such other place designated by the Company, together
with the Aggregate Exercise Price, if applicable, paid by wire transfer of
immediately available funds to an account designated by the Company.
(b) Company's Net Payment Right. In lieu of delivering to the Holder
upon exercise of this Warrant all or any portion of the Warrant Shares, the
Company shall have the right in its sole discretion to make a Net Payment to the
Holder in the form of (i) cash, (ii) shares of Original Common Stock, (iii)
shares of Series B Common Stock (but only until the later of (x) the third
anniversary of the Issue Date or (y) the date the Holder or its Wholly Owned
Affiliate no longer beneficially owns shares of Series B Common Stock) or (iv) a
combination of (i), (ii) and (iii) (the "Net Payment Right"). If the Company
elects in its Company Election Notice to exercise its Net Payment Right by
delivering to the Holder the amount of all or any portion of the Net Payment in
shares of Original Common Stock or Series B Common Stock (each such share a "Net
Payment Share"), each such share shall be valued at the Daily Price on the
Exercise Date to which the Net Payment relates.
(c) Stock Certificates, Cash Payments and New Warrant. Within five
Business Days after the Holder completes its exercise of this Warrant in
accordance with Section 2(a), the Company shall issue and cause to be delivered
to or upon the written order of the exercising Holder and in the name of the
exercising Holder, (i) a certificate or certificates for the Warrant Shares
purchased and/or (ii) if the Company elected in the applicable Company Election
Notice to exercise its Net Payment Right as to all or any portion of the Warrant
Shares by issuance and delivery of Net Payment Shares, a certificate or
certificates representing such Net Payment Shares. If the Company (x) did not
deliver a Company Election Notice or (y) elected in a Company Election Notice to
exercise its Net Payment Right as to all or any portion of the
-4-
Warrant Shares in the form of cash, then the Company shall deliver the
applicable cash payment within three Business Days after the Holder completes
its exercise of this Warrant in accordance with Section 2(a) by wire transfer of
immediately available funds to an account designated by the Holder. If this
Warrant should be exercised in part only, the Company shall, within five
Business Days after completion of the exercise as set forth in Section 2(a),
execute and deliver a new Warrant evidencing the right of the Holder to purchase
the balance of the Warrant Shares (or portions thereof) subject to purchase
hereunder.
3. Stock Fully Paid; Reservation of Shares. Each Warrant Share issuable
upon exercise of this Warrant, upon receipt by the Company of the Exercise Price
therefore, and each Net Payment Share issuable upon exercise of this Warrant in
lieu of Warrant Shares, shall be validly issued, fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to its issuance. So
long as this Warrant remains outstanding, the Company shall at all times reserve
and keep available out of its authorized and unissued Original Common Stock
solely for the purpose of providing for the exercise of the rights to purchase
all Warrant Shares granted pursuant to this Warrant such number of shares of
Original Common Stock as shall, from time to time, be sufficient therefor.
4. Adjustments. The number and kind of securities purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
from time to time upon the occurrence of certain events, as follows:
(a) Daily Price Shortfall. If the average (rounded to the nearest
thousandth) of the Daily Prices for the 15 consecutive Business Days ending
December 31, 2002 (the "15-Day Price") is:
(i) less than or equal to $7.00 per share, then (A) the number
of Warrant Shares purchasable upon this Warrant's exercise shall be
increased to 6 million shares and (B) the Exercise Price shall be decreased
to $22.30 per share;
(ii) greater than $7.00 per share and less than $11.00 per
share, then (A) the number of Warrant Shares purchasable upon this
Warrant's exercise shall be
5 million + (($11.00 - 15-Day Price) x 250,000);
and (B) the Exercise Price shall be
$25 - (($11.00 - 15-Day Price) x $.675).
(b) Reclassification. If there is any reclassification or change in
the Company's Original Common Stock, the Company shall execute a new Warrant
providing that the Holder has the right to exercise such new Warrant and receive
upon such exercise (and payment of the same Exercise Price), in lieu of the
Warrant Shares previously issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money, and property that a Holder
of an equivalent number of Warrant Shares would receive upon such
reclassification or change. Any such new Warrant shall provide for adjustments
that are as nearly equivalent as practicable to the adjustments provided for in
this Section 4, which shall apply similarly to successive reclassifications or
changes and to the Net Payment Right.
-5-
(c) Stock Splits, Dividends and Combinations. If the Company at any
time subdivides its outstanding Original Common Stock or issues a stock dividend
on shares of Original Common Stock, the number of Warrant Shares purchasable
upon this Warrant's exercise immediately before such subdivision or stock
dividend shall be proportionately increased, and the Exercise Price shall be
proportionately decreased. If the Company at any time combines its outstanding
Original Common Stock, the number of Warrant Shares issuable upon this Warrant's
exercise immediately before such combination shall be proportionately decreased,
and the Exercise Price shall be proportionately increased. Any adjustment made
pursuant to this Section 4(c) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(d) Consolidation, Merger, or Sale. If the Company consolidates or
merges with another entity (other than a consolidation or merger in which the
Company is the surviving or continuing entity and that does not result in any
change in the Original Common Stock), or Transfers or disposes of all or
substantially all of its assets to another entity (collectively, a "Corporate
Change"), then the Holder shall, upon exercising this Warrant, have the right to
receive the number of Warrant Shares, other Company securities or property, or
successor entity's securities or property, as the case may be, that the Holder
would have received upon such Corporate Change if the Holder had exercised this
Warrant immediately before such Corporate Change. If there is a Corporate
Change, the Company or its successor following such Corporate Change shall make
appropriate adjustments to the provisions of this Warrant (including those
relating to adjusting the Exercise Price, the number of Warrant Shares issuable
upon exercising this Warrant and the Company's Net Payment Right) so that this
Warrant will apply, as nearly as possible, to any shares or other property
deliverable upon exercise of this Warrant as if the Holder had exercised this
Warrant immediately before such Corporate Change and the Holder had carried out
the terms of the exchange such Corporate Change provided for effective as of the
consummation of such Corporate Change. The Company shall not effect any
Corporate Change unless, upon or before it is consummated, the Company's
successor following such Corporate Change has assumed in writing (x) the
obligation to deliver to the Holder the shares of stock or other securities,
cash or property that the Holder has the right to purchase in accordance with
this Section 4(d) and (y) the Company's other obligations under this Warrant.
(e) Limitation on Adjustments. No adjustment in the number of Warrant
Shares purchasable upon exercise of this Warrant shall be required unless such
adjustment would require an increase or decrease of at least three percent in
the number of Warrant Shares then purchasable upon the exercise of this Warrant
or, if this Warrant is not then exercisable, the number of Warrant Shares
purchasable upon the exercise of this Warrant on the first date thereafter that
this Warrant become exercisable. No adjustment in the Exercise Price shall be
required if such adjustment is less than $.01. Any adjustments which by reason
of this Section 4(e) are not required to be made immediately shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 4(e) shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
5. Notice of Adjustments and Corporate Change. Whenever the number of
Warrant Shares purchasable under this Warrant or the Exercise Price are adjusted
pursuant to Section 4, the Company shall promptly notify the Holder describing,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which the
-6-
adjustment was calculated, the number and class of Warrant Shares that the
Holder has the right to purchase, and the Exercise Price for each Warrant Share
after effecting the adjustment. Failure to mail the notice or any defect therein
shall not affect the validity of the transaction requiring the mailing of such
notice.
6. Fractional Shares. The Holder does not have the right to exercise
this Warrant for fractional shares. In lieu of fractional shares, the Company
shall make a cash payment equal to the value of such fractional shares based on
the Exercise Price then in effect.
7. Securities Laws. In order to exercise this Warrant, the exercising
Holder shall, as a condition to such exercise, be required to make the
representations and warranties set forth in the Exercise Notice as of the date
of each such Exercise Notice. Each Holder agrees that all the provisions of the
Stockholder Agreement, if applicable and still in effect pursuant to the terms
thereof, shall apply to Warrant Shares and/or Net Payment Shares.
8. Mutilated or Missing Warrants. In case a certificate or
certificates evidencing this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of a Holder, issue and deliver in
exchange and substitution for and upon cancellation of the mutilated certificate
or certificates, or in lieu of and substitution for the certificate or
certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount at the Holder's cost. The Holder shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe in connection with the issuance and
delivery of a new Warrant certificate or certificates.
9. No Right as Stockholder. No Holder shall be entitled, in its
capacity as a Holder, to vote or receive dividends or be deemed the holder of
the Warrant Shares or Net Payment Shares, as applicable, or any other Company
securities that may at any time be issuable on this Warrant's exercise for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, in its capacity as a Holder, any of the rights of a Company
stockholder, including any right (i) to vote for the election of directors or
upon any matter submitted to stockholders at any stockholder meeting, (ii) to
give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or (iii) to receive
notice of meetings, to receive dividends or subscription rights, or otherwise,
until the Holder exercises this Warrant and the Warrant Shares or Net Payment
Shares, as applicable, issuable upon this Warrant's exercise have become
deliverable, as provided in this Warrant.
10. Transfer of Warrant. Transfer of this Warrant and any Warrant
Shares and/or Net Payment Shares issued upon exercise of this Warrant is
restricted by Section 4 of the Stockholder Agreement. As a condition to the
Company's obligation to effect a Transfer permitted under Section 4 of the
Stockholder Agreement, any proposed transferee of this Warrant shall (i) be
required to demonstrate compliance with such article and (ii) agree in writing
with the Company to be bound by the terms of the Stockholder Agreement as if an
original signatory thereto by executing a Transfer Notice and Adoption
Agreement.
-7-
11. Termination of Warrant. This Warrant, other than the rights and
obligations specified in this Section 11 and Sections 12(d), 12(m) and 12(n),
which survive termination of this Warrant, shall terminate and expire at 5:00
p.m., Houston, Texas time, on the last day of the Exercise Period.
12. Miscellaneous.
(a) Successors and Assigns. Except as may be expressly provided
herein, this Warrant shall be binding upon and inure to the benefit of the
successors of the Company and the Holder. Neither the Company nor the Holder may
otherwise assign or delegate any of its rights or obligations under this Warrant
without the prior written consent of the other, which consent shall be in the
sole and absolute discretion of the Company or the Holder, as applicable. Any
purported assignment or delegation without such consent shall be void and
ineffective.
(b) Certain Events. The Holder agrees that this Warrant and the
obligations hereunder shall attach to this Warrant and the shares issued upon
exercise of this Warrant and shall be binding upon any Person to which legal or
beneficial ownership of such shares shall pass, whether by operation of law or
otherwise.
(c) Benefits of Agreement Restricted to Parties. This Warrant is
made solely for the benefit of the Company and the Holder and no other Person
(including employees or shareholders of the Holder) shall have any right, claim
or cause of action under or by virtue of this Warrant.
(d) Notices. All notices, requests and other communications
(collectively, the "Notices") made pursuant to this Warrant shall be in writing
and signed and correctly dated by the party sending such Notice. All Notices
shall be delivered personally (by courier or otherwise) or by facsimile to the
receiving party at the applicable address or facsimile number set forth below:
If to the Company:
Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. X'Xxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: 000-000-0000
-8-
and
Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
If to a Holder:
Occidental Chemical Holding Corporation
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: 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 the Company or a Holder by giving Notice of such
change of address or facsimile number in the manner set forth in this Section
12(d).
(e) Severability. In the event that any provision of this Warrant
shall finally be determined to be unlawful, such provision shall be deemed
severed from this Warrant and every other provision of this Warrant shall remain
in full force and effect.
(f) Construction. In construing this Warrant, the following
principles shall be followed: (i) no consideration shall be given to the
captions of the sections, subsections or clauses, which are inserted for
convenience in locating the provisions of this Warrant and not as an aid in
construction; (ii) no consideration shall be given to the fact or presumption
that any of the Company or the Holder had a greater or lesser hand in drafting
this Warrant; (iii) the word "includes" and its syntactic variants mean
"includes, but is not limited to" and corresponding syntactic variant
expressions; (iv) the plural shall be deemed to include the singular, and vice
versa; (v) references in this Warrant to Sections and Exhibits shall be deemed
to be references to Sections of, and Exhibits to, this Warrant unless the
context shall otherwise require; (vi) all Exhibits attached to this Warrant
shall be deemed incorporated herein as if set forth in full herein; (vii) the
words "hereof", "herein" and "hereunder" and words of similar import shall refer
to this Warrant as a whole and not to any particular provision of this Warrant;
and (viii) unless otherwise expressly provided, any agreement, instrument or
statute defined or referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein.
-9-
(g) Entire Agreement. This Agreement together with the Related
Securities Agreements set forth the entire agreement and understanding among the
Company and the Holder as to the subject matter hereof and merges and supercedes
all prior discussions, agreements and understandings of every kind and nature
among them.
(h) Counterparts. This Warrant 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.
(i) Governing Law. The laws of the State of Delaware shall govern
the construction, interpretation and effect of this Warrant without giving
effect to any conflicts of law principles.
(j) Transaction Costs. The Company and the Holder shall each be
solely responsible for and bear all of its own respective costs, fees and
expenses.
(k) Amendment. All waivers, modifications, amendments or
alterations of this Warrant shall require the written approval of the Company
and all Holders. Except as provided in the preceding sentence, no action taken
pursuant to this Warrant, including any investigation by or on behalf of the
Company or a Holder, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants or
agreements contained herein and/or in any documents delivered or to be delivered
pursuant to this Warrant. The waiver by the Company or a Holder of a breach of
any provision of this Warrant shall not operate or be construed as a waiver of
any subsequent breach.
(l) Specific Performance. Each Holder and the Company agree that
each would be irreparably damaged if for any reason a party fails to perform any
of its obligations under this Warrant, and that a party would not have an
adequate remedy at law for money damages in such event. Accordingly, each other
party shall be entitled to seek specific performance and injunctive and other
equitable relief to enforce the performance of this Warrant by any other party.
This provision is without prejudice to any other rights that a party may have
against another party for any failure to perform its obligations under this
Warrant.
(m) Jurisdiction; Consent to Service of Process; Waiver. ANY
JUDICIAL PROCEEDING BROUGHT AGAINST THE COMPANY OR THE HOLDER UNDER OR ARISING
OUT OF OR IN CONNECTION WITH THIS WARRANT SHALL BE BROUGHT IN THE FEDERAL OR
STATE COURTS OF THE STATE OF DELAWARE, AND, BY EXECUTION AND DELIVERY OF THIS
WARRANT, EACH OF THE COMPANY AND THE HOLDER 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 WARRANT. EACH OF THE
COMPANY AND THE HOLDER 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 COMPANY AND THE HOLDER SHALL
MAINTAIN THE APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE AGENT) FROM THE DATE
-10-
HEREOF UNTIL THE EARLIER OF THE CLOSING DATE OR THE TERMINATION OF THIS WARRANT
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 COMPANY AND THE HOLDER. EACH OF THE COMPANY AND THE
HOLDER HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED ON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS.
(n) Waiver of Jury Trial. EACH OF THE COMPANY AND THE HOLDER HEREBY
KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS
WARRANT AND FOR ANY COUNTERCLAIM THEREIN.
(o) Further Assurances. From time to time, at the request of the
Company or a Holder, the parties 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 Warrant.
-11-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by a duly authorized officer on the day and year first written below.
Dated: ____________, 2002.
LYONDELL CHEMICAL COMPANY
By: ___________________________
Name:
Title:
Holder:
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: ___________________________
Name:
Title:
EXHIBIT A
EXERCISE NOTICE
(To be executed upon exercise of Warrant)
TO: Lyondell Chemical Company
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. X'Xxxxx
Telecopy Number: 000-000-0000
Capitalized terms used in this Exercise Notice but not defined herein have
the meanings set forth in the Warrant dated _______________, 2002 (the
"Warrant").
1. Election. The undersigned hereby irrevocably elects to purchase
__________ Warrant Shares pursuant to the terms of the Warrant and shall deliver
the Aggregate Exercise Price, if applicable, and the Warrant as provided in
Section 2(a) of the Warrant.
2. Representations and Warranties. The Holder hereby represents and
warrants to the Company that, as of the date of this Exercise Notice, with
respect to the exercise of the Warrant and the purchase of Warrant Shares and/or
Net Payment Shares, the following are true and correct:
(a) Investment. Holder acknowledges and agrees that all Warrant
Shares and/or Net Payment Shares (collectively, the "Subject Securities")
will be subject to the Stockholder Agreement and, among other things, will
bear the legends specified therein. Holder is acquiring the Subject
Securities for investment for its own account, not as a nominee or agent,
and not with a view to, or for resale in connection with, any distribution
thereof in violation of applicable law, and has not offered or sold any
portion of the Subject Securities to be acquired by it. Holder acknowledges
and understands that investment in the Subject Securities is subject to a
high degree of risk and that it must bear the economic risk of its
investment for an indefinite period of time because the Subject Securities
must be held indefinitely (i) until subsequently registered under the
Securities Act and applicable state and other securities laws or (ii)
unless an exemption from registration is available which depends upon,
among other things, the bona fide nature of Holder's investment intent and
the accuracy of Holder's representations as expressed herein. Holder
understands that any transfer agent of the Company will be issued stop
transfer instructions with respect to the Subject Securities unless such
transfer is subsequently registered under the Securities Act and applicable
state and other securities laws or unless an exemption from such
registration is available. Holder was not organized for the purpose of
acquiring the Subject Securities.
(b) Investigation; No General Solicitation. Holder has received a
copy of all forms, reports and documents that the Company is required to
file with the Securities and Exchange Commission since December 31, 2001
(the "Company SEC Reports"). Holder has had a reasonable opportunity to ask
questions relating to and otherwise discuss the information set forth in
the Company SEC Reports and the Company's business,
A-1
management and financial affairs with the Company's management and other
parties, and Holder has received satisfactory responses to its inquiries.
To the extent necessary, Holder has retained, at the expense of Holder, and
relied upon appropriate professional advice regarding the investment, tax
and legal merits and consequences of its purchaser of the Subject
Securities hereunder. Holder has relied only on its own independent
investigation before deciding to acquire the Subject Securities.
(c) Sophistication and Financial Condition of Stockholder. Holder is
an experienced and sophisticated investor and has such knowledge and
experience in financial and business matters or its professional advisors
have such knowledge and experience in financial and business matters as are
necessary to evaluate the merits and risks of an investment in the Subject
Securities and to evaluate the merits and risks of its investment and
protect its own interest in connection with the acquisition of a Subject
Security. Holder is able to bear the economic risk of this investment
regarding the Company, is able to hold the Subject Securities indefinitely
and has a sufficient net worth to sustain a loss of its entire investment
in the Company in the event such loss should occur.
(d) Status of the Company Securities. Holder has been informed by the
Company that the Subject Securities have not been and will not be
registered under the Securities Act or under any state securities laws,
including Section 25102(f) of the California Corporations Code, except as
specifically provided in the Registration Rights Agreement, and are being
offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering.
3. Delivery of Certificates and Cash. As provided in Section 2 of the
Warrant, upon receipt of the Aggregate Purchase Price, if applicable, and the
Warrant, please issue in the name of the undersigned (i) a certificate or
certificates representing the applicable number of Warrant Shares and/or (ii) if
the Company elects to exercise its Net Payment Right by issuing Net Payment
Shares, a certificate or certificates representing such Net Payment Shares. If
the Company elects to exercise its Net Payment Right by delivery of cash, please
wire transfer immediately available funds to the account designated below. Cash
in lieu of any fractional shares should also be sent by wire transfer of
immediately available funds to the account designated below.
________________________
(Name)
________________________
________________________
(Address)
________________________
(Account)
A-2
__________________________________________
(Signature)
Name: ____________________________________
Title: ___________________________________
_______________________________
(Date)
Note: The above signature must correspond exactly with the name on the first
page of this Warrant or with the name of the Transferee appearing the
Transfer form below.
If the number of Warrant Shares the Holder elects to purchase hereunder shall
not be all the shares purchasable under the Warrant, a new Warrant is to be
issued in the name of the registered Holder for the balance remaining of the
Warrant Shares purchasable thereunder.
A-3
EXHIBIT B
FORM OF TRANSFER NOTICE AND ADOPTION AGREEMENT
(To be executed by the registered Holder and the Transferee if such Holder
desires to Transfer the attached Warrant and such Transfer is permissible under
the terms of the Warrant attached hereto and the Stockholder Agreement.)
This Transfer Notice ("Transfer Notice") is executed pursuant to the terms
and conditions of the Warrant (the "Warrant") dated ___________, 2002 to
purchase ________ shares of Original Common Stock, par value $1.00 per share, of
Lyondell Chemical Company, a Delaware corporation (the "Company"), by the Holder
executing this Transfer Notice (the "Transferor"). A copy of the Warrant is
attached hereto and incorporated herein by reference. Capitalized terms used in
this Transfer Notice but not defined herein have the meanings set forth in the
Warrant.
1.1 Transfer. For value received, the Transferor hereby Transfers unto
_______________________________________________ (the "Transferee") the within
Warrant, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________ attorney to Transfer the
Warrant on the books of the Company, with full power of substitution. The number
of Warrant Shares Transferred pursuant to this Transfer Notice is
______________. If such number of Warrant Shares are not all of the Warrant
Shares represented by the Warrant, a new Warrant is to be issued in the name of
the Transferor for the balance of the remaining Warrant Shares.
1.2 Acknowledgement. Transferee acknowledges that Transferee is acquiring
the Warrant subject to the terms and conditions of the Warrant and the
Stockholders Agreement dated ____________, 2002 among Company and the
Stockholders (as defined therein) (the "Stockholder Agreement"). Transferee
acknowledges that, during the term of the Stockholder Agreement, the Warrant is,
and any Warrant Shares and/or Net Payment Shares issued upon exercise thereof
will be, a Restricted Security (as defined in the Stockholder Agreement). A copy
of the Stockholder Agreement is attached hereto and incorporated herein by
reference.
1.3 Agreement. Transferee (i) agrees that the Warrant and all Warrant
Shares and/or Net Payment Shares issued to Transferee and shares of Original
Common Stock that may be acquired by Transferee in the future, shall be bound by
and subject to the terms of the Stockholder Agreement pursuant to the terms
thereof and (ii) hereby adopts the Stockholder Agreement with the same force and
effect as if it were originally a party thereto and, effective as of the date
hereof, is a Stockholder as defined therein.
1.4 Representation. Transferee is a wholly owned Subsidiary of the
Transferor. After giving effect to the Transfer hereunder, the Transferee owns
the total number of Warrants, shares of Original Common Stock and shares of
Series B Common Stock set forth next to its signature hereto.
B-1
1.5 Notice. The address of the Transferee for purposes of Section 12(d) of
the Warrant is as follows:
___________________________
___________________________
___________________________
___________________________
Attention: ________________
Telecopy Number: __________
with a copy to:
___________________________
___________________________
___________________________
___________________________
Attention: ________________
Telecopy Number: __________
Dated: ____________________
[TRANSFEROR]
By: _________________________________
Name:
Title:
[TRANSFEREE]
By: _________________________________
Name:
Title:
Warrants: ___________________________
Original Common Stock: ______________
Series B Common Stock: ______________
Note: The above signature must correspond exactly with the name on the first
page of the Warrant or with the name of the Transferee appearing in the
Transfer Notice and Adoption Agreement attached hereto.
B-2
