MASTER TRANSACTION AGREEMENT
BETWEEN
LYONDELL PETROCHEMICAL COMPANY
AND
MILLENNIUM CHEMICALS INC.
-iii-
NY01:65772.16
TABLE OF CONTENTS
Page
SECTION 1 FORMATION, RELATED AGREEMENTS AND CLOSING..................1
1.1 Formation of the Partnership...............................1
1.2 Tier 1 Related Agreements..................................1
1.3 Tier 2 Related Agreements..................................2
1.4 Closing Date...............................................2
1.5 Contributions of Assets and Assumption of Liabilities......2
1.6 New Bank Debt and Payment of Millennium Assumed Debt. ....2
SECTION 2 REPRESENTATIONS AND WARRANTIES.............................2
2.1 Due Organization, Good Standing and Power..................2
2.2 Authorization and Validity of Agreements...................3
2.3 Lack of Conflicts..........................................3
2.4 Certain Fees...............................................4
2.5 SEC Reports; Financial Statements..........................4
2.6 Absence of Certain Changes.................................4
2.7 Information Supplied for Joint Proxy Statement.............5
SECTION 3 ADDITIONAL AGREEMENTS......................................5
3.1 Access to Information......................................5
3.2 Conduct of the Contributed Business Pending the
Closing Date.............................................6
3.3 Further Actions............................................7
3.4 Notifications..............................................8
3.5 Joint Proxy Statement; Stockholders Meetings...............8
3.6 Employee Matters...........................................9
3.7 No Inconsistent Action.....................................9
3.8 Closing Amendments Certificate.............................9
3.9 Alternative Proposals.....................................10
SECTION 4 CONDITIONS TO CLOSING.....................................10
4.1 Conditions Precedent to Obligations of Both Parties.......10
(a) No Injunction, etc................................10
(b) Tier 2 Related Agreements.........................11
(c) Government Licenses and Consents..................11
(d) Stockholder Approvals.............................11
(e) Bank Credit Facility..............................11
(f) Initial Strategic Plan and Annual Budget..........11
4.2 Conditions Precedent to Obligations of Lyondell...........11
(a) Closing Amendments Certificate....................11
(b) Accuracy of Representations and Warranties........12
(c) Performance of Agreements.........................12
(d) No Material Adverse Change........................12
(e) Third Party Consents..............................12
(f) Officer's Certificate.............................12
4.3 Conditions Precedent to Obligations of Millennium.........13
(a) Closing Amendments Certificate....................13
(b) Accuracy of Representations and Warranties........13
(c) Performance of Agreements.........................13
(d) No Material Adverse Change........................13
(e) Third Party Consents..............................13
(f) Officer's Certificate.............................13
SECTION 5 TERMINATION AND WAIVER....................................14
5.1 General...................................................14
5.2 Effect of Termination.....................................16
5.3 Termination Fees..........................................16
SECTION 6 MISCELLANEOUS.............................................17
6.1 Successors and Assigns....................................17
6.2 Benefits of Agreement Restricted to Parties...............17
6.3 Notices...................................................17
6.4 Severability..............................................18
6.5 Press Releases............................................18
6.6 Confidentiality Agreements................................18
6.7 Construction..............................................18
6.8 Counterparts..............................................19
6.9 Governing Law.............................................19
6.10 Transaction Costs.........................................19
6.11 Amendment.................................................19
6.12 Jurisdiction; Consent to Service of Process; Waiver.......19
6.13 Waiver of Jury Trial......................................20
APPENDICES
Appendix A Definitions
Appendix B List of Related Agreements
Appendix B-2 List of Certain Tier 2 Related Agreements
Appendix C Terms of Lyondell Note
Appendix D Terms of Bank Credit Agreement
SCHEDULES
Schedule 2 Exceptions
Schedule 4.2(e) Lyondell Consents
Schedule 4.3(e) Millennium Consents
Schedule 6.10 Certain Expenses
EXHIBITS
Exhibit A Form of Partnership Agreement
Exhibit B Form of Asset Contribution Agreement
Exhibit C Form of Parent Agreement
MASTER TRANSACTION AGREEMENT
This Master Transaction Agreement (this "Agreement") dated July 25,
1997 is entered into by and between Lyondell Petrochemical Company ("Lyondell")
and Millennium Chemicals Inc. ("Millennium").
The definitions of capitalized terms used in this Agreement, including
the appendices hereto, are set forth in Appendix A hereto.
WHEREAS, the parties desire to establish a joint venture in the form of
a partnership (the "Partnership") to engage in the olefins, polyolefins and
certain related petrochemicals businesses in the United States and
internationally, including research and development, purchasing and processing
feedstocks, and manufacturing, marketing and distributing products;
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Partnership will be formed and will acquire the Contributed Businesses to be
contributed by Lyondell and by Millennium Petrochemicals Inc. ("Millennium
Petrochemicals"), an indirect wholly owned subsidiary of Millennium; and
WHEREAS, the parties who have executed this Agreement (the "Parties")
wish to make certain representations and warranties to one another and provide
for the coordination of the closing of all the transactions contemplated by this
Agreement (the "Closing");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of the Parties set forth herein, it is hereby agreed as follows:
SECTION 1
FORMATION, RELATED AGREEMENTS AND CLOSING
-----------------------------------------
1.1 Formation of the Partnership. As soon as practicable following the
execution and delivery of this Agreement, the Parties shall cause certain of
their Subsidiaries to form the Partnership, to execute and deliver the
Partnership Agreement and to make initial cash contributions thereto aggregating
$1,000,000. In exchange for its contribution of $570,000, the Lyondell Group
will receive an interest or interests in the Partnership representing, in the
aggregate, 57% of the interests in the Partnership. In exchange for its
contribution of $430,000, the Millennium Group will receive an interest or
interests in the Partnership representing, in the aggregate, 43% of the
interests in the Partnership.
1.2 Tier 1 Related Agreements. The Tier 1 Related Agreements are designated
as such on Appendix B. Forms of each of the Tier 1 Related Agreements (including
forms of certain of the exhibits and versions of certain of the schedules
thereto current as of the dates indicated therein) are attached as Exhibits to
this Agreement. On the terms and subject to the conditions set forth herein, the
Parties shall cause each such agreement to be executed and delivered by the
appropriate parties thereto at (or, in the case of the Partnership Agreement,
prior to) the Closing in substantially the form attached hereto with such
changes as may be effected pursuant to Section 3.8 or otherwise agreed to by the
Parties in good faith.
1.3 Tier 2 Related Agreements. The Tier 2 Related Agreements are designated
as such on Appendix B. The forms of each of the Tier 2 Related Agreements shall
be negotiated by the Parties prior to the Closing in good faith and consistent
with the terms and provisions thereof indicated on Appendix B. On the terms and
subject to the conditions set forth herein, the Parties shall cause such
agreements to be executed and delivered in such forms by the appropriate parties
thereto at the Closing.
1.4 Closing Date. Provided that the conditions precedent set forth in
Section 4 of this Agreement shall have been satisfied or waived, the Closing
shall be held at a mutually agreeable location on the first day of the first
calendar month after the date hereof when all such conditions have been so
satisfied or waived or on such other date as may be agreed to in writing by the
Parties (the "Closing Date"). The Closing shall be deemed to occur at 4:01 a.m.
Houston, Texas time on the Closing Date.
1.5 Contributions of Assets and Assumption of Liabilities. As contemplated
by the Asset Contribution Agreements, the Parties shall on the Closing Date make
or cause to be made the contributions of assets contemplated thereby, subject to
the assumption of liabilities contemplated thereby (including the Lyondell
Assumed Debt and the Millennium Assumed Debt). In addition, the Lyondell
contributing partner shall execute and deliver to the Partnership on the Closing
Date a promissory note in the principal amount of $345 million having the
principal terms set forth on Appendix C hereto and otherwise in form and
substance reasonably satisfactory to the Parties.
1.6 New Bank Debt and Payment of Millennium Assumed Debt. On or prior to
the Closing Date, the Parties shall cause the Partnership to enter into a bank
credit agreement or agreements providing for (i) loans of an aggregate principal
amount of $1.0 billion and (ii) a working capital facility in an aggregate
principal amount of $250 million, in each case having other terms and provisions
consistent with Appendix D hereto and otherwise reasonably satisfactory to the
Parties. On the Closing Date, using the proceeds of the loans referred to in
clause (i), the Partnership shall repay in full the Millennium Assumed Debt.
SECTION 2
REPRESENTATIONS AND WARRANTIES
------------------------------
Except as set forth on Schedule 2 with respect to such Party, each Party
represents and warrants to the other Party that:
2.1 Due Organization, Good Standing and Power. Such Party and each member
of its Group (i) is (or, if not yet formed, at the Closing will be) a
corporation, limited partnership, limited liability company or other entity, as
the case may be, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has (or, if
not yet formed, at the Closing will have) the corporate power and authority, or
power under its constituent documents, to own, lease and operate its assets and,
if applicable, to conduct the Contributed Business now being conducted by it and
to be conducted by it as of the Closing, (ii) is (or, if not yet formed, at the
Closing will be) duly authorized, qualified or licensed to do business as a
foreign corporation or other organization in, and is (or, if not yet formed, at
the Closing will be) 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
Contributed Business conducted by it, if applicable (or, if not yet formed, the
assets or business to be held or conducted by it as of the Closing), requires
such authorization, qualification or licensing, except where the failure to be
so authorized, qualified, licensed or in good standing would not be reasonably
likely to have a Material Adverse Effect, and (iii) has, and in the case of the
Related Agreements to be executed by it at or prior to the Closing, will have,
all requisite corporate power and authority, or power and authority under its
constituent documents, to enter into this Agreement and, as applicable, the
Related Agreements to which it is or will be a party and, subject to obtaining
the authorizations or consents referred to in Section 2.2 hereof, to perform its
obligations hereunder and thereunder.
2.2 Authorization and Validity of Agreements.
(a) The execution, delivery and performance by such Party 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, except for any Lyondell stockholder or Millennium
stockholder approval that may be required. This Agreement has been duly and
validly executed and delivered by such Party 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 such Party and each
member of its Group of the Related Agreements to which it or any member of
its Group will be a party and the consummation by it and its Group of the
transactions contemplated thereby will be, as of the Closing, duly
authorized and approved by all necessary corporate or similar action on its
or their part. At the Closing, each of the Related Agreements to which such
Party or any member of its Group will be a party will be duly and validly
executed and delivered by such Party or member and will be upon execution
and delivery a legal, valid and binding obligation, enforceable against it
or such member in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws related to or affecting creditors' rights generally and by
general equity principles.
2.3 Lack of Conflicts. Assuming receipt of the consents contemplated by
Schedule 4.2(e) or 4.3(e), as applicable, each of the execution, delivery and
performance by such Party and each member of its Group of this Agreement and the
Related Agreements to which any of them is or will be a party and the
consummation by them of the transactions contemplated hereby and thereby does
not and, as of the Closing, will not (i) violate (with or without the giving of
notice or the lapse of time or both) any Legal Requirement applicable to any of
them or any of their Subsidiaries, other than those that would not be reasonably
likely to have a Material Adverse Effect, (ii) conflict with, or result in the
breach of, any provision of the charter or by-laws or similar governing or
organizational documents of any of them or any of their Subsidiaries, (iii)
result in the creation of any Encumbrance upon any of their assets, other than
those contemplated by this Agreement or any of the Related Agreements, or those
that would not be reasonably likely to have a Material Adverse Effect, or (iv)
violate, conflict with or result in the breach or termination of or otherwise
give any other Person the right to terminate, or constitute a default, event of
default or an event which with notice, lapse of time or both, would constitute a
default or event of default under the terms of, any contract, indenture, lease,
mortgage, Government License or other agreement or instrument to which any of
them or any of their Subsidiaries is a party or by which the properties or
businesses of any of them or any of their Subsidiaries are bound, except for
violations, conflicts, breaches, terminations and defaults that would not be
reasonably likely to have a Material Adverse Effect.
2.4 Certain Fees. Neither such 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, except for fees payable by Lyondell to
Salomon Brothers Inc and fees payable by Millennium to X.X. Xxxxxx Securities
Inc.
2.5 SEC Reports; Financial Statements.
(a) Such Party has filed all material forms, reports and documents
required to be filed by it with the SEC since December 31, 1996 (with
respect to either Party, its "SEC Reports"). Such Party's SEC Reports were
prepared in all material respects in accordance with the requirements of
the Securities Act, or the Exchange Act, as the case may be, and the rules
and regulations thereunder, and none of such Party's SEC Reports, as of the
date it was filed with the SEC and insofar as it relates to such Party's
Contributed Business, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The financial statements (including any notes thereto) contained
in such Party's SEC Reports were prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis
("GAAP") throughout the periods indicated (except as may be indicated in
the notes thereto and except that financial statements included with
quarterly reports on Form 10-Q do not contain all GAAP notes to such
financial statements) and each fairly presents the consolidated (or
combined, as applicable) financial position, results of operations and
changes in stockholders' equity and cash flows of such Party and its
subsidiaries as at the respective dates thereof and for the respective
periods indicated therein (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments).
2.6 Absence of Certain Changes. Since December 31, 1996, (i) such Party and
its Affiliates have not incurred any material liabilities or obligations, fixed,
contingent, accrued or otherwise, that relate to or are allocable to its
Contributed Business and that have had or are reasonably likely to have a
Material Adverse Effect, (ii) such Party and its Affiliates have conducted its
Contributed Business in all material respects in the ordinary course, consistent
with past practice, and (iii) no event, occurrence or other matter has occurred
that is reasonably likely to have a Material Adverse Effect with respect to the
Contributed Business of such Party, provided that this determination shall be
made without regard to any change in general economic or political conditions or
any change in raw materials prices, product prices, industry capacity or other
matter of industry-wide application that affects the Contributed Businesses of
both Parties in a substantially similar way.
2.7 Information Supplied for Joint Proxy Statement. None of the information
supplied or to be supplied by such Party for inclusion or incorporation by
reference in the Joint Proxy Statement to be filed with the SEC by Lyondell and
Millennium in connection with the stockholder meetings to be held in connection
with this Agreement will, at the date mailed to stockholders, or at the time of
such meetings, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. If at any time prior to the time of either such meeting,
any event with respect to a Party, or with respect to other information supplied
by a Party for inclusion in the Joint Proxy Statement, shall occur which is
required to be described in an amendment of, or a supplement to, the Joint Proxy
Statement, such event shall be so described, and such amendment or supplement
shall be promptly filed with the SEC. Insofar as it relates to such Party, the
Joint Proxy Statement will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
SECTION 3
ADDITIONAL AGREEMENTS
---------------------
3.1 Access to Information. Each Party agrees that, during the period
commencing on the date hereof and ending at the Closing, (i) it will give or
cause to be given to the other Party and its representatives reasonable access
during normal business hours to the offices, plants, properties, books and
records relating to its Contributed Business, as the other Party may reasonably
request, (ii) it will furnish or cause to be furnished to the other Party, to
the extent prepared in the ordinary course, such financial and operating data
and any other information with respect to the business and properties of its
Contributed Business as the other Party may reasonably request and (iii) the
other Party and its representatives shall be entitled to reasonable access
during normal business hours to the representatives, officers, employees and
contractors of such Party who are involved in the Contributed Business, as the
other Party may reasonably request; provided that, after consultation, to the
extent permissible, with the other Party, such Party may restrict access and
provision of information to the extent it reasonably believes necessary to (w)
comply with existing confidentiality agreements with third parties (provided
that, upon the other Party's reasonable request, it shall use its commercially
reasonable efforts to secure waivers of any such confidentiality agreements),
(x) ensure compliance with antitrust laws, (y) preserve the secrecy of
confidential information to the extent not related to its Contributed Business
and (z) preserve legal privilege; and provided, further that any access or
information obtained by any Party and its representatives in accordance with
this Section 3.1 and otherwise in connection with the consummation of the
transactions contemplated by this Agreement and the Related Agreements shall be
subject to the terms and conditions of the Confidentiality Agreements.
3.2 Conduct of the Contributed Business Pending the Closing Date. Each
Party agrees that, except as required or contemplated by this Agreement or
otherwise consented to or approved in writing by the other Party, during the
period commencing on the date hereof and ending on the Closing Date, it will and
will cause its Affiliates to:
(a) use its commercially reasonable efforts to operate and maintain
its Contributed Business in all material respects only in the usual,
regular and ordinary manner consistent with past practice (including
undertaking scheduled or necessary "turnarounds" or other maintenance work
and including offsite storage, treatment and disposal of chemical
substances generated prior to the Closing) and, to the extent consistent
with such operation and maintenance, use commercially reasonable efforts to
preserve the present business organization of its Contributed Business
intact, keep available the services of, and good relations with, the
present employees and preserve present relationships with all persons
having business dealings with its Contributed Business, except in each case
for such matters that, individually and in the aggregate, do not and are
not reasonably likely to have a Material Adverse Effect on its Contributed
Business;
(b) maintain its or their books, accounts and records relating to its
Contributed Business in the usual, regular and ordinary manner, on a basis
consistent with past practice, comply in all material respects with all
Legal Requirements and contractual obligations applicable to its
Contributed Business or to the conduct of its Contributed Business and
perform all of its or their material obligations relating to its
Contributed Business;
(c) not (i) modify or change in any material respect any of its
Contributed Assets or dispose of any material Contributed Asset except for
(A) inventory, equipment, supplies and other Contributed Assets sold or
otherwise disposed of in the ordinary course of business and (B) any
Contributed Assets that in the ordinary course of business are replaced
with substantially similar Contributed Assets, (ii) except in the ordinary
course of business after consultation with the other Party, (x) enter into
any contract, commitment or agreement that would be material to the
operation of its Contributed Business or use of the Contributed Assets or,
except as expressly contemplated by this Agreement or expressly
contemplated by or required pursuant to their respective terms, modify or
change in any material respect any obligation under any such contract,
commitment or agreement, (y) modify or change in any material respect any
obligation under its Government Licenses, (z) modify or change in any
material respect the manner in which the products produced by its
Contributed Business are marketed and sold, or (iii) enter into interest
rate protection or other hedging agreements (except for hydrocarbon hedging
agreements entered into in the ordinary course and expiring prior to June
30, 1998) relating to its Contributed Business;
(d) not waive any material claims or rights relating to its
Contributed Business;
(e) after obtaining Knowledge thereof, give notice to the other Party
of any claim or litigation (threatened or instituted) or any other event or
occurrence which could reasonably be expected to have a Material Adverse
Effect on its Contributed Assets or Contributed Business, other than the
types of events, occurrences or other matters referred to in the proviso
set forth in Section 2.6(iii);
(f) not take any action that is reasonably likely to result in its
representations and warranties in Section 2 hereof, or in the form of Asset
Contribution Agreement of such Party, not being true in all material
respects as of the Closing Date; and
(g) not agree, whether in writing or otherwise, to take any action it
has agreed pursuant to this Section 3.2 not to take;
provided, however, that notwithstanding anything to the contrary contained in
this Section 3.2, prior to the Closing Date the Lyondell Group and the
Millennium Group will act independently of each other in making decisions as to
the research and development, raw materials, manufacturing, pricing, marketing
and distribution of their products.
3.3 Further Actions.
(a) Subject to the terms and conditions hereof, each Party agrees to
act in good faith and to use its commercially reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement and under the Related
Agreements to be entered into by such Party or its Affiliates at Closing,
and to confirm that such transactions have been accomplished, including
without limitation using all commercially reasonable efforts: (i) to obtain
and effect prior to the Closing Date all necessary Consents and Filings;
and (ii) to obtain prior to the Closing Date all Government Licenses or
consents to the transfer of any Government Licenses that are transferable
by it or its Affiliates necessary to consummate the transactions
contemplated hereby and by the Related Agreements and to allow for the
prudent and uninterrupted operation of the Contributed Businesses by the
Partnership after the Closing. Each Party shall furnish to the other Party
and its Affiliates such necessary information and assistance as the other
may reasonably request in connection with its preparation of any such
Filings or other materials required in connection with the foregoing.
(b) Each Party shall use its commercially reasonable efforts to
procure all Consents that are necessary to transfer its Contributed
Business to the Partnership. Notwithstanding any other provision of this
Agreement to the contrary, the Parties hereto acknowledge and agree that at
the Closing the Parties will not assign to the Partnership any Contract or
warranties which by their terms require Consent from any other contracting
party thereto unless any such Consent has been obtained prior to the
Closing Date. Before the Closing, the other Party and the Partnership will
use their commercially reasonable efforts and cooperate with the Party that
is obligated to assign such contract (the "Contracting Party") in obtaining
any necessary Consents to the assignment of the Contracts, including,
without limitation, by furnishing to the Contracting Party or other parties
to any Contract summary financial information and other information with
respect to the Partnership reasonably requested by the Contracting Party or
such other parties and taking any such other actions (which, subject to any
provisions to the contrary included in any Related Agreement, shall not
include the incurrence of any expense not otherwise required to be
incurred) as the Contracting Party or such other parties may reasonably
request for the purpose of obtaining any releases, waivers or terminations
as the Contracting Party may reasonably request on behalf of itself or any
Affiliate. No representation is made by the Contracting Party with respect
to whether any Consent to assign a Contract will be obtainable, and in no
event shall the initial capital contributions be subject to reduction as a
result of any Contract not being assigned to the Partnership at the Closing
by virtue of the necessary Consent not being obtained. Following the
Closing, the Parties shall cooperate with each other and use commercially
reasonable efforts to obtain those Consents that were not obtained prior to
the Closing and (i) if such Consents are obtained following the Closing,
the Parties shall execute and deliver any other and further instruments of
assignment, assumption, transfer and conveyance and take such other and
further action as the Partnership may request in order to assign to the
Partnership any Contract or warranties to which such Consents relate and
(ii) pending such transfer or issuance to the Partnership, shall provide,
to the extent it may lawfully do so, the Partnership with the benefits of
any such Contracts, in which case, as provided for in the applicable Asset
Contribution Agreement, the Partnership shall promptly assume and discharge
(or reimburse the Party so contributing or its Affiliate for) all
obligations and liabilities associated with the benefits of such Contracts
so made available to the Partnership.
(c) Each Party shall keep the other Party fully informed from time to
time as the other Party shall reasonably request as to the status of all
Consents being sought by such Party pursuant to Section 3.3(b).
(d) Each Party shall furnish to the other Party such information,
cooperation and assistance as reasonably may be requested in connection
with the foregoing.
(e) Each Party shall negotiate and otherwise act in good faith to
complete, execute and deliver the Related Agreements at the Closing and to
effect the Closing at the earliest practicable date.
3.4 Notifications. Each Party shall notify the other Party and keep it
advised as to (i) any litigation or administrative proceeding that is either
pending or, to its Knowledge, threatened against such Party which challenges the
transactions contemplated hereby; (ii) any material damage to or destruction of
its Contributed Business; and (iii) any fact of which such Party has Knowledge
that indicates that any condition to Closing is reasonably likely not to be
satisfied in a timely fashion.
3.5 Joint Proxy Statement; Stockholders Meetings. The Parties shall
promptly prepare and file with the SEC the Joint Proxy Statement in preliminary
form. Each Party shall use its commercially reasonable efforts to respond to any
comments of the SEC staff with respect thereto, in order to permit mailing to
stockholders of the definitive Joint Proxy Statement as promptly as practicable.
Subject to the provisions of Sections 3.9 and 5.1, each Party shall (a) call a
meeting of its stockholders to be held as promptly as practicable after the date
hereof for the purpose of voting upon the transfer of its Contributed Business
contemplated hereby, (b) through its Board of Directors, recommend to its
stockholders approval of such matters and not rescind such recommendation, (c)
use commercially reasonable efforts to cause the Joint Proxy Statement to be
mailed to its stockholders at the earliest practicable date and (d) use
commercially reasonable efforts to obtain approval of the transfer of its
Contributed Business contemplated hereby by its stockholders.
3.6 Employee Matters. The Parties agree that:
(a) Substantially all employees of Lyondell and Millennium
Petrochemicals who are associated with the Contributed Businesses shall be
offered employment with the Partnership pursuant to the terms of the Asset
Contribution Agreements.
(b) After the date hereof, the Parties shall develop compensation,
benefit and personnel plans, policies or programs for the Partnership,
including those regarding retirement, 401(k), medical and other welfare
benefits, vacation, severance and other executive benefits.
3.7 No Inconsistent Action. Subject to Section 5, neither Party shall take
any material action inconsistent with its obligations under this Agreement or
which could materially hinder or delay the consummation of the Closing;
provided, however, that any action that may be taken in accordance with Section
3.2 or 3.9 shall not be deemed to violate this Section 3.7.
3.8 Closing Amendments Certificate. At or immediately prior to the Closing,
each of the Lyondell Group and the Millennium Group shall complete and deliver
to the other Group and to the Partnership an executed statement, signed by a
duly authorized officer of Lyondell or Millennium as the representative of such
delivering Group, setting forth all amendments and additions to this Agreement
or the Related Agreements or to the schedules and exhibits hereto and thereto
(if any) that such Group believes in good faith to be necessary to make the
representations and warranties of all of its members contained in this Agreement
or the Related Agreements true and correct in all respects (other than such
matters as are, individually and in the aggregate, immaterial to its Contributed
Business) as of the Closing (such Group's "Closing Amendments Certificate").
Each Group shall examine any such Closing Amendments Certificate presented to it
by the other Group, and if it is acceptable to such examining Group (or if such
examining Group is willing to waive the condition that such Closing Amendments
Certificate be acceptable to it) Lyondell or Millennium as such examining
Group's representative shall also execute it, whereupon the amendments and
additions set forth therein with respect to this Agreement and the Schedules and
Exhibits hereto shall become effective for all purposes and the amendments and
additions set forth therein with respect to the Related Agreements and the
schedules and exhibits thereto shall be effected prior to the execution and
delivery thereof so as to be effective for all purposes from and after the
Closing. 3.9 Alternative Proposals. Each Party agrees that:
(a) After the date hereof and prior to the Closing Date or earlier
termination of this Agreement, such Party shall not, and shall not permit
any of its Affiliates to, and such Party shall, and shall cause each of its
Affiliates to, cause each officer, director and employee of such Party and
its Affiliates, and each attorney, accountant, investment banker, financial
advisor and other agent retained by them, not to, directly or indirectly,
initiate, solicit or encourage the submission of any proposal or offer to
acquire or operate all or any material part of its Contributed Business or
to acquire any Person (including such Party) that directly or indirectly
owns all or any part of its Contributed Business, whether by merger, share
exchange, purchase of stock, purchase of assets, tender offer, joint
venture or otherwise, and whether for cash, securities or any other
consideration or combination thereof, if such transaction would be
materially inconsistent with or preclusive of the transactions contemplated
hereby (any such inconsistent or preclusive transaction being referred to
herein as an "Alternative Transaction"). Such Party will immediately cease
and cause to be terminated any existing initiation, solicitation,
encouragement, discussions or negotiations with parties other than the
other Party commenced heretofore with respect to Alternative Transactions.
(b) Notwithstanding the provisions of Section 3.9(a), in response to a
proposal for an Alternative Transaction (an "Alternative Proposal") that is
unsolicited and made after the date hereof, (i) such Party may engage in
discussions or negotiations regarding such Alternative Proposal with the
Person who makes such Alternative Proposal and (ii) such Party may furnish
to any such Person (subject to the execution of a confidentiality agreement
containing confidentiality provisions substantially similar to those of the
Confidentiality Agreements) confidential or non-public information
concerning such Party or its Affiliates.
(c) Such Party shall immediately notify the other Party of its receipt
of any Alternative Proposal or any request for confidential or non-public
information relating to such Party or its Affiliates in connection with an
Alternative Proposal or for access to the properties, books or records of
such Party or any Affiliate by any Person that it is considering making, or
has made, an Alternative Proposal.
SECTION 4
CONDITIONS TO CLOSING
---------------------
4.1 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 preliminary or permanent injunction or
other order issued by any federal or state court of competent jurisdiction
in the United States or by any United States federal or state governmental
or regulatory body or any statute, rule, regulation or executive order
promulgated or enacted by any United States federal or state governmental
authority shall be in effect which materially restrains, enjoins or
otherwise prohibits (i) the transactions contemplated hereby; (ii) the
ownership by the Partnership (including enjoyment of any rights relating
thereto) of the Contributed Businesses at and after the Closing; or (iii)
the operation of the Contributed Businesses by the Partnership at and after
the Closing; and no proceeding seeking any such injunction or order shall
be pending; provided, that before any determination is made to the effect
that this condition has not been satisfied, each Party shall each use
commercially reasonable efforts to have such order or injunction lifted,
vacated or dismissed.
(b) Tier 2 Related Agreements. The Parties shall have reached
agreement with respect to definitive execution forms of the Tier 2 Related
Agreements in accordance with Section 1.3.
(c) Government Licenses and Consents. The Parties shall have obtained
and effected all Government Licenses and Consents required from any
Authority for the consummation of the transactions contemplated hereunder
and under the Related Agreements to be entered into at the Closing and
required to allow for the prudent and uninterrupted operation of the
Contributed Businesses by the Partnership after the Closing in a manner
consistent with past practices, except for those Government Licenses and
Consents, the absence of which is not, in the aggregate, reasonably likely
to have a Material Adverse Effect.
(d) Stockholder Approvals. The stockholders of Lyondell shall have
duly approved the transfer of Lyondell's Contributed Business to the
Partnership contemplated hereby, and the stockholders of Millennium shall
have duly approved the transfer of Millennium's Contributed Business to the
Partnership contemplated hereby.
(e) Bank Credit Facility. The Partnership shall have entered into the
bank credit agreement or agreements contemplated by Section 1.6 and the
conditions precedent to the availability of funds thereunder shall have
been satisfied (subject only to the closing of the transactions
contemplated by this Agreement).
(f) Initial Strategic Plan and Annual Budget. The Parties shall have
agreed upon the initial Five-Year Strategic Plan and the initial Annual
Budget for the Partnership, as contemplated by the Partnership Agreement.
4.2 Conditions Precedent to Obligations of Lyondell. The obligations of
Lyondell under this Agreement are subject to the satisfaction (or waiver by
Lyondell) on or prior to the Closing Date of each of the following conditions:
(a) Closing Amendments Certificate. The Millennium Group's Closing
Amendments Certificate (if any) shall have been acceptable to the Lyondell
Group (or the Lyondell Group shall have determined to waive the condition
that such Closing Amendments Certificate be acceptable), and Lyondell shall
have executed it as the Lyondell Group's representative.
(b) Accuracy of Representations and Warranties. Notwithstanding any
investigation, inspection or evaluation conducted or notice or Knowledge
obtained by any member of the Lyondell Group (including any Knowledge
obtained as a result of receipt of a Closing Amendment Certificate), all
representations and warranties (as amended pursuant to the Millennium
Group's Closing Amendments Certificate, if applicable) of members of the
Millennium Group contained in this Agreement and the Related Agreements
that contain qualifications and exceptions relating to materiality or
Material Adverse Effect shall be true and correct on and as of the Closing
Date, and all other representations and warranties of the members of such
Group contained in such agreements shall be true and correct in all
material respects as of the Closing Date, in each case with the same force
and effect as though such representations and warranties had been made on
and as of the Closing Date.
(c) Performance of Agreements. Millennium and its Affiliates shall in
all material respects have performed and complied with all obligations and
agreements contained in this Agreement, and executed all agreements and
documents (including the Tier 1 Related Agreements and the Tier 2 Related
Agreements) to be performed, complied with or executed by it or them on or
prior to the Closing Date.
(d) No Material Adverse Change. After the date of this Agreement, no
event, occurrence or other matter shall have occurred that is reasonably
likely to have a Material Adverse Effect with respect to the Contributed
Business of Millennium, provided that this determination shall be made
without regard to any change in general economic or political conditions or
any change in raw materials prices, product prices, industry capacity or
other matter of industry-wide application that affects the Contributed
Businesses of both Parties in a substantially similar way.
(e) Third Party Consents. All Consents of any third party listed on
Schedule 4.2(e) shall have been obtained.
(f) Officer's Certificate. Lyondell shall have received a certificate,
dated the Closing Date, signed by the President or a Vice President of
Millennium to the effect that, to the Knowledge of Millennium, the
conditions specified in the above paragraphs have been fulfilled.
4.3 Conditions Precedent to Obligations of Millennium. The obligations of
Millennium under this Agreement are subject to the satisfaction (or waiver by
Millennium) on or prior to the Closing Date of each of the following conditions:
(a) Closing Amendments Certificate. The Lyondell Group's Closing
Amendments Certificate (if any) shall have been acceptable to the
Millennium Group (or the Millennium Group shall have determined to waive
the condition that such Closing Amendments Certificate be acceptable), and
Millennium shall have executed it as the Millennium Group's representative.
(b) Accuracy of Representations and Warranties. Notwithstanding any
investigation, inspection or evaluation conducted or notice or Knowledge
obtained by such member of the Millennium Group (including any Knowledge
obtained as a result of receipt of a Closing Amendment Certificate), all
representations and warranties (as amended pursuant to the Lyondell Group's
Closing Amendments Certificate, if applicable) of members of the Lyondell
Group contained in this Agreement and the Related Agreements that contain
qualifications and exceptions relating to materiality or Material Adverse
Effect shall be true and correct on and as of the Closing Date, and all
other representations and warranties of the members of such Group contained
in such agreements shall be true and correct in all material respects as of
the Closing Date, 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.
(c) Performance of Agreements. Lyondell and its Affiliates shall in
all material respects have performed and complied with all obligations and
agreements contained in this Agreement and executed all agreements and
documents (including the Tier 1 Related Agreements and the Tier 2 Related
Agreements) to be performed, complied with or executed by it or them on or
prior to the Closing Date.
(d) No Material Adverse Change. After the date of this Agreement, no
event, occurrence or other matter shall have occurred that is reasonably
likely to have a Material Adverse Effect with respect to the Contributed
Business of Lyondell, provided that this determination shall be made
without regard to any change in general economic or political conditions or
any change in raw materials prices, product prices, industry capacity or
other matter of industry-wide application that affects the Contributed
Businesses of both Parties in a substantially similar way.
(e) Third Party Consents. All Consents of any third party listed on
Schedule 4.3(e) shall have been obtained.
(f) Officer's Certificate. Millennium shall have received a
certificate, dated the Closing Date, signed by the President or a Vice
President of Lyondell to the effect that, to the Knowledge of Lyondell, the
conditions specified in the above paragraphs have been fulfilled.
SECTION 5
TERMINATION AND WAIVER
----------------------
5.1 General. This Agreement may be terminated and the transactions
contemplated herein and in the Related Agreements may be abandoned at any time
prior to the Closing:
(a) by the written consent of both Parties;
(b) by Lyondell if there has been a material misrepresentation or a
breach of an agreement by Millennium in this Agreement that (i) if such
misrepresentation or breach existed on the Closing Date, would constitute a
failure to satisfy the conditions to Closing set forth in Section 4.2(b)
and (ii) has not been cured and cannot reasonably be cured within 30 days
after all other conditions to Closing have been satisfied;
(c) by Millennium if there has been a material misrepresentation or a
breach of an agreement by Lyondell in this Agreement that (i) if such
misrepresentation or breach existed on the Closing Date, would constitute a
failure to satisfy the conditions to Closing set forth in Section 4.3(b)
and (ii) has not been cured and cannot reasonably be cured within 30 days
after all other conditions to Closing have been satisfied;
(d) by Lyondell or by Millennium if after the date hereof and prior to
the Closing any final, non-appealable order or injunction shall be issued
by any federal or state court of competent jurisdiction in the United
States or by any United States Authority, or any Legal Requirement shall be
promulgated or enacted by any United States Authority, that would have the
effect of prohibiting or making unlawful the performance of this Agreement,
the execution, delivery or performance of any Related Agreement or the
consummation of the Closing;
(e) by either Lyondell or Millennium in the event that the Closing
does not occur for any reason on or before March 31, 1998; provided,
however, that if the Closing does not occur due to the act or omission of
one of the Parties, that Party may not terminate this Agreement pursuant to
the provisions of this Section;
(f) by Lyondell, upon approval of the Lyondell Board of Directors, if
prior to the Closing Date (i) without violation of Section 3.9, Lyondell
shall have received after the date hereof an Alternative Proposal, (ii) the
Lyondell Board of Directors shall have determined, in the exercise of its
good faith judgment and after consultation with its legal counsel and
receipt of a written opinion from its financial advisors, that the
Alternative Transaction contemplated by such Alternative Proposal (if
consummated pursuant to its terms) would be materially more favorable from
a financial point of view to Lyondell or its stockholders, as applicable,
than the transactions contemplated by this Agreement and (iii) Lyondell
shall have given Millennium at least five Business Days' prior written
notice of the material terms and conditions of such Alternative Proposal
and of its intention to terminate this Agreement pursuant to this
provision, in order to effect such Alternative Proposal; provided, however,
that such termination under this clause (f) shall not be effective, and
Lyondell shall not be entitled to enter into a definitive agreement
providing for an Alternative Transaction, until Lyondell has made payment
to Millennium of the fee required to be paid pursuant to Section 5.3(a);
(g) by Millennium, upon approval of the Millennium Board of Directors,
if prior to the Closing Date (i) without violation of Section 3.9,
Millennium shall have received after the date hereof an Alternative
Proposal, (ii) the Millennium Board of Directors shall have determined, in
the exercise of its good faith judgment and after consultation with its
legal counsel and receipt of a written opinion from its financial advisors,
that the Alternative Transaction contemplated by such Alternative Proposal
(if consummated pursuant to its terms) would be materially more favorable
from a financial point of view to Millennium or its stockholders, as
applicable, than the transactions contemplated by this Agreement and (iii)
Millennium shall have given Lyondell at least five Business Days' prior
written notice of the material terms and conditions of such Alternative
Proposal and of its intention to terminate this Agreement pursuant to this
provision, in order to effect such Alternative Proposal; provided, however,
that such termination under this clause (g) shall not be effective, and
Millennium shall not be entitled to enter into a definitive agreement
providing for an Alternative Transaction, until Millennium has made payment
to Lyondell of the fee required to be paid pursuant to Section 5.3(b);
(h) by Lyondell, if the Millennium Board of Directors shall have
resolved to accept or recommended to the Millennium stockholders an
Alternative Proposal or shall have withdrawn or adversely modified or taken
a public position materially inconsistent with its approval or
recommendation to the stockholders of Millennium of the transfer of its
Contributed Business contemplated hereby;
(i) by Millennium, if the Lyondell Board of Directors shall have
resolved to accept or recommended to the Lyondell stockholders an
Alternative Proposal or shall have withdrawn or adversely modified or taken
a public position materially inconsistent with its approval or
recommendation to the stockholders of Lyondell of the transfer of its
Contributed Business contemplated hereby;
(j) by Lyondell, if (i) a Change of Control of Millennium shall have
occurred, (ii) Millennium shall have entered into a definitive agreement
providing for, or publicly announced its intention to effect, any
transaction involving a Change of Control of Millennium or (iii) a tender
offer or exchange offer shall have been commenced or publicly announced
that, if consummated, would have the effect with respect to Millennium
described in clause (c) of the definition of "Change of Control";
(k) by Millennium, if (i) a Change of Control of Lyondell shall have
occurred, (ii) Lyondell shall have entered into a definitive agreement
providing for, or publicly announced its intention to effect, any
transaction involving a Change of Control of Lyondell or (iii) a tender
offer or exchange offer shall have been commenced or publicly announced
that, if consummated, would have the effect with respect to Lyondell
described in clause (c) of the definition of "Change of Control;" and
(l) by either Party, if the approval of the stockholders of such Party
or the other Party contemplated by Section 4.1(d) is not obtained at the
applicable stockholders meeting, including adjournments thereof.
Any right of termination set forth above shall be exercised by written notice
from the terminating Party to the other Party.
5.2 Effect of Termination. In the event of any termination of this
Agreement as provided above, this Agreement shall forthwith become wholly void
and of no further force and effect and there shall be no liability on the part
of any Party, its Subsidiaries or their respective officers or directors;
provided, however, that upon any such termination the obligations of the Parties
with respect to this Section 5, expenses under Section 6.10 and confidentiality
under Section 6.6 shall remain in full force and effect and if the Partnership
has been formed the Parties shall dissolve it, or shall cause it to be
dissolved; and provided, further, that nothing herein will relieve any party
from liability for damages for any breach of this Agreement.
5.3 Termination Fees.
(a) If this Agreement is terminated by Lyondell pursuant to Section
5.1(f) or by Millennium pursuant to Section 5.1(i) or (k), then Lyondell
shall pay Millennium a fee of $40 million; provided, however, that no fee
shall be payable following a termination of this Agreement pursuant to
Section 5.1(k)(iii) unless and until the relevant tender offer or exchange
offer has been consummated and a Change of Control of Lyondell described in
clause (c) of the definition of "Change of Control" has occurred.
(b) If this Agreement is terminated by Millennium pursuant to Section
5.1(g) or by Lyondell pursuant to Section 5.1(h) or (j), then Millennium
shall pay Lyondell a fee of $40 million; provided, however, that no fee
shall be payable following a termination of this Agreement pursuant to
Section 5.1(j)(iii) unless and until the relevant tender offer or exchange
offer has been consummated and a Change of Control of Millennium described
in clause (c) of the definition of "Change of Control" has occurred.
(c) If (i) this Agreement is terminated prior to the occurrence of the
Closing for any reason other than failure to satisfy the condition set
forth in Section 4.1(a) or the termination of this Agreement pursuant to
Section 5.1(a) or Section 5.1(d), (ii) prior to such date as is 180 days
after such termination there shall occur a Change of Control of a Party or
a Party shall enter into a definitive agreement providing for, or shall
publicly announce its intention to effect, any transaction involving a
Change of Control of such Party or involving the sale or other disposition
of all or substantially all of the Contributed Business of such Party
(including by transfer to a joint venture or similar arrangement) to or
with an unaffiliated Person or a tender offer or exchange offer shall have
been commenced or publicly announced that, if consummated, would have the
effect with respect to a Party described in clause (c) of the definition of
"Change of Control" and (iii) no fee has previously been paid by such Party
pursuant to Section 5.3(a) or (b), then upon (and subject to) the
occurrence of such Change of Control or the consummation of such
transaction, such Party will pay to the other Party a fee of $40 million;
provided, however, that such fee shall instead be $10 million if this
Agreement is terminated pursuant to Section 5.1(l) because of the failure
of the stockholders of such Party to approve the transfer of such Party's
Contributed Business and at or prior to the time of such stockholder vote
(1) there had been no public disclosure or announcement by any Person of
(x) any such Change of Control, definitive agreement, intention or
transaction regarding such Party or (y) any Alternative Proposal that has
been made to such Party and (2) the Board of Directors of such Party had
not withdrawn or adversely modified or taken a public position materially
inconsistent with its approval or recommendation to the stockholders of
such Party of the transfer of such Party's Contributed Business
contemplated hereby.
(d) Any such amount shall be paid in cash by wire transfer in
immediately available funds, (i) in the case of Section 5.1(f) or (g), at
or prior to the termination referred to therein and (ii) in the case of
Section 5.1(h), (i), (j) or (k) or Section 5.3(c), not later than seven
Business Days after the obligation to make such payment arises.
SECTION 6
MISCELLANEOUS
-------------
6.1 Successors and Assigns. Except as may be expressly provided herein,
this Agreement shall be binding upon and inure to the benefit of the successors
of each of the Parties. Neither Party may otherwise assign or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the other Party, which consent shall be in the sole and absolute discretion
of such other Party. Any purported assignment or delegation without such consent
shall be void and ineffective.
6.2 Benefits of Agreement Restricted to Parties. This Agreement is made
solely for the benefit of the Parties and for the benefit of the Partnership as
third party beneficiary, and no other Person (including employees) shall have
any right, claim or cause of action under or by virtue of this Agreement.
6.3 Notices. All notices, requests and other communications that are
required or may be given under this Agreement shall, unless otherwise provided
for elsewhere in this Agreement, be in writing and shall be deemed to have been
duly given if and when (i) transmitted by telecopier facsimile with proof of
confirmation from the transmitting machine or (ii) delivered by commercial
courier or other hand delivery, as follows:
Xxxxxxx X. Xxxxxxxxxxx Xxxxxx X. Xxxxxxxxx, III
Senior Vice President, Senior Vice President,
General Counsel & Secretary Law and Administration and Secretary
Lyondell Petrochemical Company Millennium Chemicals Inc.
0000 XxXxxxxx Xxxxxx 00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxx, Xxx Xxxxxx 00000
Telecopy Number: 000-000-0000 Telecopy Number: 000-000-0000
with a copy to: with a copy to:
Xxxxx & Xxxxx, L.L.P. Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx Attention: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000 Telecopy Number: (000) 000-0000
6.4 Severability. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall, so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any materially adverse manner as to any of the Parties, be deemed
severed from this Agreement and every other provision of this Agreement shall
remain in full force and effect.
6.5 Press Releases. Unless otherwise mutually agreed, no Party shall make
or authorize any public release of information regarding the Partnership or any
other matters contemplated by, or any provisions or terms of, this Agreement or
the Related Agreements except (i) that a press release or press releases in
mutually agreed upon form or forms shall be issued by the Parties as promptly as
is practicable following the execution of this Agreement, (ii) that the Parties
may, after consultation with each other, communicate with employees, customers,
suppliers, stockholders, lenders, lessors, and other particular groups as may be
necessary or appropriate and not inconsistent with the prompt consummation of
the transactions contemplated by this Agreement and (iii) after consultation
with each other, as required by law or stock exchange rule or as necessary for
the assertion or enforcement of contractual rights.
6.6 Confidentiality Agreements. The Parties have heretofore entered into
the Confidentiality Agreements relating to the exchange between Lyondell, on the
one hand, and Millennium and Millennium Petrochemicals, on the other hand, of
certain confidential information related or otherwise pertinent to the
transactions contemplated by this Agreement. Nothing in this Agreement shall be
construed as impairing or otherwise limiting the obligations assumed pursuant to
the Confidentiality Agreements by the parties thereto. The Confidentiality
Agreements shall remain in full force and effect in accordance with their
respective terms until the earlier of Closing or their respective expiration
dates.
6.7 Construction. In construing this Agreement, the following principles
shall be followed: (i) no consideration shall be given to the captions of the
articles, sections, subsections or clauses, which are inserted for convenience
in locating the provisions of this Agreement and not as an aid in construction;
(ii) no consideration shall be given to the fact or presumption that any of the
Parties had a greater or lesser hand in drafting this Agreement; (iii) examples
shall not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other genders; and (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement.
6.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.
6.9 Governing Law. The laws of the State of Delaware shall govern the
construction, interpretation and effect of this Agreement without giving effect
to any conflicts of law principles.
6.10 Transaction Costs.
(a) Subject to subsection (b), and except as provided on Schedule
6.10, all reasonable out-of-pocket costs, fees and expenses incurred at any
time by either Party in connection with the negotiation, execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby shall be reimbursed by the Partnership or shall be
shared by the Parties pro rata in accordance with the relative interests of
their Subsidiaries in the Partnership.
(b) Notwithstanding the foregoing, each Party shall be solely
responsible for and bear all of its own respective costs, fees and expenses
if this Agreement is terminated and the Closing does not occur.
6.11 Amendment. All waivers, modifications, amendments or alterations of
this Agreement shall require the written approval of each of the Parties. Except
as provided in the preceding sentence, no action taken pursuant to this
Agreement, including any investigation by or on behalf of any Party, shall be
deemed to constitute a waiver by the Party taking such action of compliance with
any representations, warranties, covenants or agreements contained herein and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any Party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
6.12 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY TO THIS AGREEMENT OR ANY DISPUTE UNDER OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER RELATED HERETO
SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS OF THE STATE OF DELAWARE, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES TO THIS
AGREEMENT ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES TO THIS AGREEMENT SHALL
APPOINT THE CORPORATION TRUST COMPANY, THE 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 TO THIS AGREEMENT 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 HERETO. EACH PARTY HEREBY WAIVES ANY OBJECTION IT MAY HAVE BASED ON LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON-CONVENIENS.
6.13 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND INTENTIONALLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
[signature pages follow]
IN WITNESS WHEREOF, this Master Transaction Agreement has been executed
on behalf of each of the Parties, by their respective officers thereunto duly
authorized, effective as of the date first written above.
LYONDELL PETROCHEMICAL COMPANY
By: /s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: President and Chief
Executive Officer
MILLENNIUM CHEMICALS INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
APPENDIX A
TO
MASTER TRANSACTION AGREEMENT
DEFINITIONS
-----------
"Affiliate" shall mean any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified; provided, however, that for purposes of this
Agreement (i) Atlantic Richfield Company and any entities controlled by it shall
not be considered an Affiliate of the Lyondell Group, (ii) Suburban Propane
Partners, L.P. and any entities controlled by it shall not be considered an
Affiliate of the Millennium Group, and (iii) neither the Partnership nor any
entity controlled by it shall be considered an Affiliate of the Lyondell Group
or the Millennium Group. For purposes of this definition, the term "control"
shall have the meaning set forth in 17 CFR 230.405, as in effect on the date
hereof.
"Agreement" shall mean this Master Transaction Agreement entered into between
the Parties as of the date hereof.
"Asset Contribution Agreements" shall mean for Lyondell that certain Asset
Contribution Agreement between Lyondell and the Partnership and for Millennium
that certain Asset Contribution Agreement between Millennium Petrochemicals and
the Partnership to be executed and delivered at the Closing in substantially the
form attached hereto as Exhibit B.
"Assumed Liabilities" of a Party shall have the meaning assigned to such term in
the Asset Contribution Agreement for such Party and shall include, with respect
to Lyondell, the Lyondell Assumed Debt and, with respect to Millennium, the
Millennium Assumed Debt.
"Authority" shall mean any government or governmental or regulatory body
thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, department or instrumentality thereof, or any court or
arbitrator (public or private).
"Business Day" shall mean any day other than a Saturday, Sunday or other day on
which banks are closed in New York City, New York.
"Change of Control" shall mean with respect to a Party the occurrence of any of
the following events: (a) there shall be consummated any consolidation, merger
or share exchange of such Party (i) in which such Party is not the continuing or
surviving Person (other than a consolidation, merger or share exchange with a
wholly owned Subsidiary of such Party in which all shares of common stock of
such Party outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same number of shares of common stock of such
Subsidiary) or (ii) pursuant to which the common stock of such Party is
converted into cash, securities or other property, other than, in each case, a
consolidation, merger or share exchange of such Party in which the holders of
the common stock immediately prior to the consolidation, merger or share
exchange hold, directly or indirectly, at least a majority of the voting power
and common equity of the continuing or surviving Person immediately after such
consolidation, merger or share exchange; (b) all or substantially all of such
Party's properties and assets on a consolidated basis are sold or otherwise
disposed of to any Person or Persons in any one transaction or a series of
transactions, other than as contemplated by this Agreement; or (c) any Person or
any Persons acting together which would constitute a "group" for purposes of
Section 13(d) of the Exchange Act (other than such Party, any Subsidiary of such
Party, any employee stock purchase plan, stock option plan or other stock
incentive plan or program, retirement plan or automatic dividend reinvestment
plan or any substantially similar plan of such Party or any Subsidiary of such
Party or any Person holding securities of such Party for or pursuant to the
terms of any such employee benefit plan), together with any Affiliates thereof,
shall acquire beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of 50% or more of the voting stock of such Party.
"Closing" shall mean the closing of the transactions contemplated by this
Agreement.
"Closing Amendments Certificate" shall have the meaning set forth in Section
3.8.
"Closing Date" shall have the meaning set forth in Section 1.4.
"Confidentiality Agreements" shall mean those certain Confidentiality Agreements
separately entered into as of February 3, 1997 between the Parties and certain
of their Affiliates and binding upon such Parties and their Affiliates as set
forth therein.
"Consent" shall mean any consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by any other Person or any Authority,
or any expiration or termination of any applicable waiting period under any
Legal Requirement, required with respect to any Party or any party to the
Related Agreements in connection with (i) the execution and delivery of this
Agreement or any of the Related Agreements or (ii) the consummation of any of
the transactions provided for hereby or thereby.
"Contracts" of a Party shall have the meaning assigned to such term in the Asset
Contribution Agreement for such Party.
"Contributed Assets" of a Party shall have the meaning assigned to the term
"Assets" in the Asset Contribution Agreement for such Party.
"Contributed Business" shall mean, with respect to each of Lyondell and
Millennium, its "Contributed Business" as defined in the Asset Contribution
Agreement for such Party, including the Contributed Assets and Assumed
Liabilities related thereto.
"Encumbrance" shall mean any lien, charge, encumbrance, security interest, title
defect, option or any other restriction or third-party right.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Filing" shall mean any filing with any Person or any Authority required with
respect to any Party in connection with (i) the execution and delivery of this
Agreement or any of the Related Agreements or (ii) the consummation of any of
the transactions provided for hereby or thereby.
"GAAP" shall have the meaning set forth in Section 2.5(b).
"Government License" of a Party shall have the meaning assigned to such term in
the Asset Contribution Agreement for such Party.
"Lyondell" shall mean Lyondell Petrochemical Company, a Delaware corporation.
"Lyondell Assumed Debt" shall mean debt issued by Lyondell having an aggregate
principal amount of $745 million, as specified in the Asset Contribution
Agreement with respect to Lyondell.
"Lyondell Group" shall mean Lyondell and the Subsidiary or Subsidiaries of
Lyondell to be formed to be a partner or partners in the Partnership.
"Group" shall mean the Lyondell Group or the Millennium Group, as appropriate.
"Joint Proxy Statement" shall mean the Joint Proxy Statement of Millennium and
Lyondell to be filed with the SEC under the Exchange Act, pursuant to which each
of Millennium and Lyondell will seek its stockholders' approval of the transfer
of its Contributed Businesses to the Partnership as contemplated hereby.
"Millennium" shall mean Millennium Chemicals Inc., a Delaware corporation.
"Millennium Assumed Debt" shall mean debt issued by Millennium Petrochemicals
having an aggregate principal amount of $750 million, as specified in the Asset
Contribution Agreement with respect to Millennium.
"Millennium Group" shall mean Millennium, Millennium Petrochemicals and the
Subsidiary or Subsidiaries of Millennium to be formed to be a partner or
partners in the Partnership.
"Millennium Petrochemicals" shall mean Millennium Petrochemicals Inc., a
Virginia corporation.
"Knowledge" shall mean with respect to any Party the actual knowledge of (i) any
plant manager, (ii) any officer of such Party having responsibilities with
respect to the Contributed Business or the transactions contemplated in this
Agreement, (iii) in the case of Millennium, any officer of Millennium
Petrochemical having responsibilities with respect to the Contributed Business
or the transactions contemplated in this Agreement, and (iv) any employee
reporting directly to an officer described in clause (ii) or (iii).
"Legal Requirement" shall mean any law, statute, rule, ordinance, decree,
regulation, requirement, order or judgment of any Authority including the terms
of any Government License.
"Material Adverse Effect" shall mean any adverse circumstance or consequence
that, individually or in the aggregate, has an effect that is material to the
financial condition, results of operations, assets or business of the
Contributed Business of the Party at issue taken as a whole.
"Parties" shall mean Lyondell and Millennium.
"Partnership" shall mean the partnership to be formed as contemplated hereby.
"Partnership Agreement" shall mean the partnership agreement of the Partnership.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization.
"Proceeding" shall mean any action, suit, claim or legal, administrative or
arbitration proceeding or governmental investigation to which any Party or an
Affiliate is a party.
"Related Agreements" shall mean the Tier 1 Related Agreements and the Tier 2
Related Agreements.
"Securities Act" shall mean the Securities Act of 1933.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 2.5.
"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, including, in the case of Millennium or Lyondell, each of their
respective Subsidiaries set forth on Exhibit 21 to (or otherwise incorporated by
reference to) their respective Annual Reports on Form 10-K for each of their
fiscal years ended December 31, 1996 except, in the case of Lyondell,
Lyondell-CITGO Refining Company Ltd.
"Tier 1 Related Agreements" shall mean those agreements so designated on
Appendix B, forms of each of which (including forms of the exhibits and certain
of the schedules thereto current as of the dates indicated therein), are
attached hereto as Exhibits.
"Tier 2 Related Agreements" shall mean those agreements so designated on
Appendix B (including Appendix B-2), descriptions of certain terms of which are
included thereon.
APPENDIX B
TO
MASTER TRANSACTION AGREEMENT
LIST OF RELATED AGREEMENTS
--------------------------
Tier 1 Related Agreements
1. Partnership Agreement
2. Asset Contribution Agreements
a. From Lyondell to the Partnership
b. From Millennium to the Partnership
3. Parent Agreement
Tier 2 Related Agreements
1. Agreements listed as exhibits in the table of contents
of the Asset Contribution Agreements.
2. Agreements listed on Appendix B-2.
APPENDIX C
TO
MASTER TRANSACTION AGREEMENT
TERMS OF LYONDELL NOTE
----------------------
MAKER: Lyondell subsidiary that is a partner in the Partnership
AMOUNT: $345 million
TERM: Earlier of 2 years from Closing or 30 days after a
financing at Lyondell-CITGO Refining Company Ltd.
("LCR") which results in the repayment of LCR's
existing $450 million 5-year term loan and
distribution to Lyondell of at least $345 million
RATE: 6 month LIBOR plus market spread for applicable
credit rating (Lyondell)
RIGHT OF
OFFSET/
SECURITY: In the event of a default under the note, Lyondell
Group waives right to distribution of proceeds and
assign those rights to the Partnership, in which
event the amounts so withheld will be deemed to be
payments under the note
COVENANTS: Standard affirmative covenants comparable to Lyondell
Assumed Debt (e.g., payment of interest, maintenance of
corporate existence)
OTHER: Prepayable at any time, without penalty or premium
Senior note entitled to equal and ratable security
with any holders of secured debt issued by Lyondell or
the maker (subject to customary exceptions)
Cross-default with other Lyondell debt (including
Lyondell Assumed Debt, if such default is caused by
an action or failure to act on the part of Lyondell)
exceeding $25 million
GUARANTOR: Payments of interest and principal shall be
fully and unconditionally guaranteed by Lyondell,
such guarantee to be a senior obligation entitled to
equal and ratable security with any holders of Lyondell
secured debt (subject to customary exceptions)
APPENDIX D
TO
MASTER TRANSACTION AGREEMENT
TERMS OF BANK CREDIT AGREEMENT(S)
---------------------------------
TERMS AND CONDITIONS FOR $1.0 BILLION BANK CREDIT AGREEMENT AND $250 MILLION
WORKING CAPITAL FACILITY
TENOR: 5 Year revolver
RATE: LIBOR + appropriate spread, ability to swap to fixed
SECURITY: Unsecured
COVENANTS: Commensurate with investment grade credit rating
OTHER: Any bank proposal to amend or modify business agreement will be
unacceptable
GUARANTEE: Millennium America Inc., a wholly owned subsidiary of
Millennium, will guarantee $750 million of borrowings under this
Agreement.
