EXHIBIT 10.1
MASTER TRANSACTION AGREEMENT
BETWEEN
EQUISTAR CHEMICALS, LP,
OCCIDENTAL PETROLEUM
CORPORATION,
LYONDELL PETROCHEMICAL COMPANY
AND
MILLENNIUM CHEMICALS INC.
TABLE OF CONTENTS
PAGE
SECTION 1 RELATED AGREEMENTS AND CLOSING 2
1.1 Tier 1 Related Agreements 2
1.2 Tier 2 Related Agreements 2
1.3 Closing Date 2
1.4 Partnership Long-term Debt 2
1.5 Closing Transactions 2
SECTION 2 REPRESENTATIONS AND WARRANTIES 3
2.1 Representations and Warranties of the Partnership 3
2.2 Representations and Warranties of Occidental 8
2.3 Representations and Warranties of Lyondell 11
2.4 Representations and Warranties of Millennium 13
SECTION 3 ADDITIONAL AGREEMENTS 15
3.1 Access to Information 15
3.2 Conduct of the Occidental Subject Business Pending the
Closing Date 15
3.3 Conduct of the Partnership Subject Business Pending the
Closing Date 17
3.4 Further Actions 18
3.5 Notifications 20
3.6 Employee Matters 20
3.7 Partnership Unanimous Consent Items 20
SECTION 4 CONDITIONS TO CLOSING 21
4.1 Conditions Precedent to Obligations of All Parties 21
(a) No Injunction, etc. 21
(b) Tier 2 Related Agreements 21
(c) Government Licenses and Consents 21
(d) HSR Act 21
4.2 Conditions Precedent to Obligations of the Partnership 21
(a) Accuracy of Representations and Warranties 22
(b) Performance of Agreements 22
(c) No Material Adverse Change 22
(d) Officer's Certificates 22
4.3 Conditions Precedent to Obligations of Occidental 22
(a) Accuracy of Representations and Warranties 22
(b) Performance of Agreements 22
(c) No Material Adverse Change 23
(d) Board of Directors Approval 23
(e) Officer's Certificates 23
(f) Third Party Consents 23
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SECTION 5 TERMINATION AND WAIVER 23
5.1 General 23
5.2 Effect of Termination 24
SECTION 6 MISCELLANEOUS 24
6.1 Successors and Assigns 24
6.2 Benefits of Agreement Restricted to Parties 24
6.3 Notices 24
6.4 Severability 25
6.5 Press Releases 25
6.6 Confidentiality Agreement 26
6.7 Construction 26
6.8 Counterparts 26
6.9 Governing Law 26
6.10 Transaction Costs 26
6.11 Amendment 27
6.12 Jurisdiction; Consent to Service of Process; Waiver 27
6.13 Waiver of Jury Trial 28
6.14 Action by the Partnership 28
APPENDICES
Appendix A Definitions
Appendix B List of Related Agreements
SCHEDULES
Schedule 2.1 Exceptions to Representations and Warranties of the
Partnership
Schedule 2.2 Exceptions to Representations and Warranties of Occidental
Schedule 2.3 Exceptions to Representations and Warranties of Lyondell
Schedule 2.4 Exceptions to Representations and Warranties of Millennium
Schedule 4.3(f) Occidental Consents
Schedule 6.10 Certain Expenses
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EXHIBITS
Exhibit A Form of Amended and Restated Agreement of Limited Partnership
Exhibit B Form of Occidental Contribution Agreement
Exhibit C Form of Amended and Restated Parent Agreement
Exhibit D Form of Sales Agreement (Ethylene)
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MASTER TRANSACTION AGREEMENT
This Master Transaction Agreement (this "Agreement") dated May 15, 1998 is
entered into by and among Equistar Chemicals, LP, a Delaware limited partnership
(the "Partnership"), Occidental Petroleum Corporation, a Delaware corporation
("Occidental"), Lyondell Petrochemical Company, a Delaware corporation
("Lyondell"), and Millennium Chemicals Inc., a Delaware corporation
("Millennium").
The definitions of capitalized terms used in this Agreement, including the
appendices hereto, are set forth in Appendix A hereto.
WHEREAS, Lyondell and Millennium entered into the Master Transaction
Agreement dated July 25, 1997, as amended, which contemplated, among other
things, the formation of the Partnership;
WHEREAS, the Initial Partners entered into the Limited Partnership
Agreement of the Partnership dated October 10, 1997 and the Certificate of
Limited Partnership with respect to the Partnership became effective October 17,
1997;
WHEREAS, the Partnership commenced operations December 1, 1997 upon its
acquisition of the Subject Businesses of Lyondell and Millennium Petrochemicals
Inc., a Virginia corporation and an indirect wholly owned subsidiary of
Millennium ("Millennium Petrochemicals");
WHEREAS, Lyondell and Millennium, the respective ultimate parent entities
of the Initial Partners, desire to admit to the Partnership (i) PDG Chemical
Inc., a Delaware corporation and an indirect, wholly owned subsidiary of
Occidental ("PDG Chemical"), as a general partner, and (ii) Occidental Petrochem
Partner 1, Inc., a Delaware corporation and a wholly owned Subsidiary ("OCC
Sub") of Occidental Chemical Corporation, a New York corporation ("OCC"), and
Occidental Petrochem Partner 2, Inc., a Delaware corporation and a wholly owned
Subsidiary ("Oxy CH Sub") of Oxy CH Corporation, a California corporation ("Oxy
CH"), as limited partners, upon the transfer to the Partnership of the Subject
Business to be contributed by the Occidental Partners, each a wholly owned
Subsidiary of Occidental;
WHEREAS, upon the terms and subject to the conditions set forth herein, the
Occidental Partners will contribute their Subject Business to the Partnership
through a merger, a partnership interest transfer and certain asset transfers,
the Partnership will issue Units to the Occidental Partners and the Occidental
Partners will become partners in the Partnership, and certain other agreements
will be entered into as provided for herein; and
WHEREAS, the Parties have made all applicable filings under the HSR Act
with respect to the transactions contemplated hereby and have received
confirmation from the Federal Trade Commission of the early termination of the
applicable waiting period under the HSR Act;
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
RELATED AGREEMENTS AND CLOSING
1.1 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 the Closing in substantially the
form attached hereto with such changes as may be agreed to by the Parties in
good faith.
1.2 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. 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.
1.3 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 date hereof 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 4:00 a.m. Houston, Texas time on the
Closing Date.
1.4 Partnership Long-term Debt. At or immediately subsequent to the
Closing Date, the Partnership's long-term debt shall consist of: (i) borrowings
under a bank credit agreement or agreements providing for maximum borrowings in
the amount of $1.25 billion (inclusive of any amounts to be used for working
capital purposes); (ii) Lyondell Assumed Debt (as defined in the Initial Master
Transaction Agreement) in the amount of $745 million and (iii) Occidental
Assumed Debt in the amount of $205 million; provided, however, that the amount
of the credit agreement or agreements described in (i) above may be adjusted to
such greater amount as may be reasonably satisfactory to the Partnership and
Occidental.
1.5 Closing Transactions. As contemplated by this Agreement and by the
Occidental Contribution Agreement and the Amended and Restated Partnership
Agreement, as applicable, on the Closing Date:
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(a) OCC will contribute or cause to be contributed certain assets to
OCC Sub which will simultaneously contribute such assets to the
Partnership, subject to the assumption by the Partnership of certain
liabilities;
(b) OCC Sub will assign a lease for certain assets to the Partnership;
(c) Oxy CH will contribute all of the issued and outstanding capital
stock of Oxy Petrochemicals to Oxy CH Sub;
(d) Oxy Petrochemicals Inc., a wholly owned direct Subsidiary of Oxy
CH Sub ("Oxy Petrochemicals") and the Partnership will merge, with the
Partnership as the surviving entity;
(e) PDG Chemical will contribute or cause to be contributed certain
assets to the Partnership, subject to the assumption by the Partnership of
certain liabilities;
(f) the Partnership will (i) issue Units to the Occidental Partners
(pursuant to asset contributions, partnership interest transfer or the
merger, as the case may be) and the Occidental Partners will be admitted as
partners of the Partnership and (ii) issue Units to Lyondell LP, Lyondell
GP, Millennium LP and Millennium GP;
(g) OCC will agree to guarantee (with the form and terms thereof to be
substantially in the form attached to that certain letter agreement, of
even date, by and between OCC and the Partnership) $419,700,000 of
indebtedness of the Partnership; and
(h) the Partnership shall deliver (i) a note to Oxy CH Sub obligating
the Partnership to pay $419,700,000 plus interest in accordance with the
terms described therein and (ii) a note to Millennium LP obligating the
Partnership to pay $75 million plus interest in accordance with the terms
described therein.
SECTION 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Partnership. Except as set
forth on Schedule 2.1, the Partnership represents and warrants to each other
Party as follows:
(a) Organization, Good Standing and Power. The Partnership (i) is a
limited partnership duly organized, validly existing and in good standing
under the laws of the state of Delaware and has the power and authority
under its constituent documents to own, lease and operate its assets and to
conduct its Subject Business now being conducted by it, (ii) is duly
authorized, qualified or licensed to do business as a foreign limited
partnership in, and is in good standing in, each of the jurisdictions in
which its right, title or interest in or to any of the assets held by it
requires such authorization, qualification or licensing, except where
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the failure to be so authorized, qualified, licensed or in good standing
would not be reasonably likely to have a Material Adverse Effect with
respect to its Subject Business, 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 to
perform its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by the Partnership of
this Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized and approved by all
necessary corporate or similar action on its part. This Agreement has
been duly and validly executed and delivered by the Partnership 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.
(ii) The execution, delivery and performance by the Partnership of
the Related Agreements to which it will be a party and the
consummation by it of the transactions contemplated thereby will be,
as of the Closing, duly authorized and approved by all necessary
action on its part. At the Closing, each of the Related Agreements to
which the Partnership will be a party will be duly and validly
executed and delivered by the Partnership and will be upon execution
and delivery a 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.
(c) Lack of Conflicts. Except with respect to the HSR Act as set
forth in Section 4.1(d), each of the execution, delivery and performance by
the Partnership of this Agreement and the Related Agreements to which it is
or will be a party and the consummation by it of the transactions
contemplated hereby and thereby does not and, as of the Closing, will not
(i) violate (with or without the giving of notice or the lapse of time or
both) any Legal Requirement applicable to it or its Subsidiaries, other
than those that would not be reasonably likely to have a Material Adverse
Effect with respect to its Subject Business, (ii) conflict with, or result
in the breach of, any provision of the charter or by-laws or similar
governing or organizational documents of it or its 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 with respect to its Subject Business, 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,
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lapse of time or both, would constitute a default or event of default under
the terms of, any contract, indenture, lease, mortgage, Government License
or other agreement or instrument to which it or any of its Subsidiaries is
a party or by which the properties or businesses of it or any of its
Subsidiaries are bound, except for violations, conflicts, breaches,
terminations and defaults that would not be reasonably likely to have a
Material Adverse Effect with respect to its Subject Business.
(d) Certain Fees. Neither the Partnership 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.
(e) Financial Statements. The Partnership's audited financial
statements as of and for the year ended December 31, 1997 and any unaudited
quarterly financial statements prepared pursuant to Section 5.4 of the
Partnership Agreement since December 31, 1997 (in each case including any
notes thereto), 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 unaudited or quarterly financial statements 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 partners' equity and cash flows of the
Partnership 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).
(f) Absence of Certain Changes. Since December 31, 1997, (i) the
Partnership and its Affiliates have not incurred any material liabilities
or obligations, fixed, contingent, accrued or otherwise, (A) that relate to
or are allocable to its Subject Business and that have had or are
reasonably likely to have a Material Adverse Effect with respect to its
Subject Business, or (B) that would cause the long-term debt of the
Partnership immediately prior to the Closing to exceed the aggregate of
$1.745 billion and any amounts borrowed under the Partnership's bank credit
facility for working capital, (ii) the Partnership and its Affiliates have
conducted its Subject Business in all material respects in the ordinary
course, and (iii) no event, occurrence or other matter has occurred that is
reasonably likely to have a Material Adverse Effect with respect to its
Subject Business, 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 its Subject Business and
Occidental's Subject Business in a substantially similar way.
(g) Partnership Documents. The Partnership has provided to Occidental
a true and correct copy of the Partnership Agreement, as amended to date.
The Partnership has provided to Occidental true and correct copies of (i)
all minutes of meetings of the Partnership Governance Committee held to
date and such minutes accurately reflect all
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actions, approvals and authorizations (including with respect to the
Strategic Plan) by or of the Partnership Governance Committee, (ii) the
Strategic Plan and (iii) the current annual budget of the Partnership.
(h) Partnership Interests. Without giving effect to this Agreement or
the transactions contemplated hereby, Lyondell LP, Lyondell GP, Millennium
LP and Millennium GP are the only Partners in the Partnership and the only
holders of Units, in the denominations set forth in the Partnership
Agreement. Without giving effect to this Agreement or the transactions
contemplated hereby, there are no outstanding subscriptions, options,
convertible securities, warrants or calls of any kind issued or granted by,
or binding upon, the Partnership to purchase or otherwise acquire or to
sell or otherwise dispose of any security of or equity interest in the
Partnership.
(i) Conduct of the Partnership Subject Business since December 1,
1997. Except as required or contemplated by approvals or authorizations
(including the Strategic Plan) by or of the Partnership Governance
Committee, since the contribution of their Subject Assets to the
Partnership by Lyondell and Millennium on December 1, 1997, the Partnership
has:
(i) maintained its books, accounts and records relating to its
Subject Business in the usual, regular and ordinary manner,
complied in all material respects with all Legal Requirements and
contractual obligations applicable to its Subject Business or to
the conduct of its Subject Business and performed all of its
material obligations relating to its Subject Business;
(ii) not (A) modified or changed in any material respect any of its
assets or disposed of any material asset except for (1)
inventory, equipment, supplies and other assets sold or otherwise
disposed of in the ordinary course of business and (2) any assets
that in the ordinary course of business were replaced with
substantially similar assets, (B) except in the ordinary course
of business, (x) entered into any contract, commitment or
agreement material to the operation of its Subject Business or
use of its assets or, except as expressly contemplated by or
required pursuant to their respective terms, modified or changed
in any material respect any obligation under any such contract,
commitment or agreement, (y) modified or changed in any material
respect any obligation under its Government Licenses, (z)
modified or changed in any material respect the manner in which
the products produced by its Subject Business are marketed and
sold, or (C) entered into interest rate protection or other
hedging agreements (except for hydrocarbon hedging agreements
entered into in the ordinary course and expiring prior to
December 31, 1998) relating to its Subject Business; provided,
that, for purposes of (A) and (B), "material" shall mean a change
or modification that was subject to the unanimous voting
requirement of Section 6.7 of the Partnership Agreement; and
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(iii) not waived any material claims or rights relating to its
Subject Business.
(j) Employee Benefits.
(i) Each of the Partnership's Defined Benefit and Defined Contribution
Pension Plans covering employees ("Employee Plan") is in substantial
compliance with applicable requirements prescribed by any and all Legal
Requirements, including, but not limited to the Code, except for violations
the occurrence of which would not in the aggregate reasonably be expected
to have a Material Adverse Effect with respect to its Subject Business;
(ii) The Partnership has in all material respects performed all
obligations required to be performed by it under ERISA, the Code and any
other applicable Legal Requirements and under the terms of each Employee
Plan, except such failures to perform which would not in the aggregate
reasonably be expected to have a Material Adverse Effect with respect to
its Subject Business. The Partnership has received no written notice of
the existence of any material default or violation by any other party of
any of such Legal Requirements, terms or requirements applicable to any of
the Employee Plans;
(iii) Other than routine claims for benefits, the Partnership has
not received any written notice of any pending material claims or lawsuits
which have been asserted or instituted against any of the Employee Plans,
the assets of the trust or funds under the Employee Plans, the sponsor or
administrator of any of the Employee Plans, or against any fiduciary of any
of the Employee Plans with respect to the operation of such Plan;
(iv) The Partnership has not received any written notice of any
pending investigation or pending enforcement action by the Pension Benefit
Guaranty Corporation, the Department of Labor, the Internal Revenue Service
or any other Authority with respect to any of the Employee Plans;
(v) All contributions required to be made under the terms of the
Partnership's Employee Plans have been timely made. No Employee Plan has
an "accumulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA);
(vi) All of the Partnership's "group health plans" (within the meaning
of Code Section 5000(b)(1)) have been operated in substantial compliance
with the group health plan continuation coverage requirements of Section
4980B of the Code and Sections 601 through 608 of ERISA, Title XXII of the
Public Health Service Act and the provisions of the Social Security Act;
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(vii) There has been no act or omission by the Partnership that
has given rise to or may give rise to material fines, penalties, taxes, or
related charges under Section 502(c), (i) or (l) or Section 4071 of ERISA
or Chapter 43 of the Code or the imposition of a lien pursuant to Sections
401(a)(29) or 412(n) of the Code or pursuant to ERISA;
(viii) Except with respect to the transactions contemplated by this
Agreement, no "reportable event" within the meaning of Section 4043 of
ERISA, or prohibited transaction within the meaning of Section 406 of
ERISA, has occurred with respect to any Employee Plan which would
reasonably be expected to have a Material Adverse Effect; and
(ix) No Employee Plan is a "multiemployer plan" as such term is
defined in section 3(37) of ERISA. No Employee Plan is a plan maintained
by more than one employer (a so-called "multiple employer plan") for
purposes of section 413(c) of the Code or otherwise.
(k) Conduct of Business in Compliance with Regulatory and Contractual
Requirements. The Partnership and each Affiliate thereof is operating and
conducting its Subject Business in compliance with all applicable Legal
Requirements, rights of concession, licenses, know-how or other proprietary
rights of others, the failure to comply with which would reasonably be
expected to have a Material Adverse Effect with respect to its Subject
Business.
(l) Legal Proceedings. There is no litigation, proceeding, claim,
grievance, arbitration, investigation or other action to which the
Partnership or any Affiliate thereof is a party (including proceedings or
claims by or before the National Labor Relations Board, the Equal
Employment Opportunity Commission, the Department of Labor or any other
Authority) (i) that is pending or, to the Knowledge of the Partnership,
threatened, (ii) that relates in any way to the operation or conduct of its
Subject Business, or to the transactions contemplated by this Agreement,
and (iii) that upon resolution adverse to Partnership or any Affiliate,
could reasonably be expected to have a Material Adverse Effect with respect
to its Subject Business.
(m) Initial Asset Contributions. To the Partnership's Knowledge,
there is no basis for a claim by the Partnership against Lyondell or
Millennium Petrochemicals for breach of representation or warranty of any
of their respective representations and warranties set forth in the
Lyondell Asset Contribution Agreement or the Millennium Asset Contribution
Agreement.
2.2 Representations and Warranties of Occidental. Except as set forth on
Schedule 2.2, Occidental represents and warrants to each other Party as follows:
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(a) Organization, Good Standing and Power. Occidental and each
member of its Group (i) is a corporation, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own, lease and
operate its assets and, if applicable, to conduct the Subject Business now
being conducted by it and to be conducted by it as of the Closing, (ii) is
duly authorized, qualified or licensed to do business as a foreign
corporation in, and is in good standing in, each of the jurisdictions in
which its right, title or interest in or to any of the assets held by it or
the Subject Business conducted by it, if applicable, 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 with respect to its
Subject Business, 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 to enter into this Agreement and, as
applicable, the Related Agreements to which it is or will be a party and to
perform its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements. Assuming the approval
of Occidental's board of directors referred to in Section 4.3(d):
(i) The execution, delivery and performance by Occidental of this
Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized and approved by all necessary
corporate or similar action on its part. This Agreement has been duly
and validly executed and delivered by Occidental 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.
(ii) The execution, delivery and performance by Occidental 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 Occidental or any member of its Group will
be a party will be duly and validly executed and delivered by
Occidental 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.
(c) Lack of Conflicts. Assuming satisfaction of the condition in
Section 4.1(c) and receipt of the Consents contemplated by Schedule 4.3(f),
and except with respect to the HSR Act as set forth in Section 4.1(d), each
of the execution, delivery and performance by Occidental and each member of
its Group of this Agreement and the Related Agreements to
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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 with respect to its Subject
Business, (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 with respect to its
Subject Business, 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 with respect to its Subject
Business.
(d) Certain Fees. Neither Occidental 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.
(e) SEC Reports; Financial Statements.
(i) Occidental has filed all material forms, reports and documents
required to be filed by it with the SEC since December 31, 1996 (its
"SEC Reports"). Occidental'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 Occidental's SEC Reports, as
of the date they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(ii) The financial statements (including any notes thereto)
contained in Occidental's SEC Reports were prepared in accordance with
GAAP throughout the periods indicated (except as may be indicated in
the notes thereto and except that financial statements included with
quarterly reports on Form 10-Q do not contain all GAAP notes to such
financial statements) and each fairly presents the consolidated (or
combined, as applicable) financial position, results of operations and
changes in stockholders' equity and cash flows of Occidental and its
subsidiaries as at the respective dates thereof and for the respective
periods indicated
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therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments).
(f) Absence of Certain Changes. Since December 31, 1996, (i)
Occidental and its Affiliates have not incurred any material liabilities or
obligations, fixed, contingent, accrued or otherwise, that relate to or are
allocable to its Subject Business and that have had or are reasonably
likely to have a Material Adverse Effect with respect to its Subject
Business, (ii) Occidental and its Affiliates have conducted its Subject
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 Subject Business of Occidental, 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
Partnership's Subject Business and Occidental's Subject Business in a
substantially similar way.
2.3 Representations and Warranties of Lyondell. Except as set forth on
Schedule 2.3, Lyondell represents and warrants to each other Party as follows:
(a) Organization, Good Standing and Power. Lyondell and each member
of its Group (i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power and authority to own, lease and operate its assets, (ii) is duly
authorized, qualified or licensed to do business as a foreign corporation
or other organization in, and is in good standing in, each of the
jurisdictions in which its right, title or interest in or to any of the
assets held by it 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 with respect to the Partnership's Subject Business, 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 to perform its obligations hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by Lyondell of this
Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized and approved by all necessary
corporate or similar action on its part. This Agreement has been duly
and validly executed and delivered by Lyondell 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.
11
(ii) The execution, delivery and performance by Lyondell 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 Lyondell or any member of its Group will
be a party will be duly and validly executed and delivered by Lyondell
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.
(c) Lack of Conflicts. Except with respect to the HSR Act as set
forth in Section 4.1(d), each of the execution, delivery and performance by
Lyondell 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 with respect to
Lyondell, (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 with respect to
Lyondell, 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 with respect to Lyondell.
(d) Certain Fees. Neither Lyondell 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.
(e) Joint Proxy Statement. The Joint Proxy Statement was 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, as of the date of the Stockholders' Meetings and insofar
as it relates to the Subject Business of Lyondell, did not
12
contain any untrue statement of a material fact or omit 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.
(f) Title to Lyondell Units. Without giving effect to this Agreement
or the transactions contemplated hereby, Lyondell LP and Lyondell GP each
owns the number of Units set forth in Section 2.1 of the Partnership
Agreement opposite its name. Except as contemplated by this Agreement,
there are no outstanding subscriptions, options, convertible securities,
warrants or calls of any kind issued or granted by, or binding upon, the
Partnership or any member of the Lyondell Group to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or equity
interest in the Partnership.
2.4 Representations and Warranties of Millennium. Except as set forth on
Schedule 2.4, Millennium represents and warrants to each other Party as follows:
(a) Organization, Good Standing and Power. Millennium and each
member of its Group (i) is a corporation or a limited liability company
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the corporate
power and authority or power under its constituent documents to own, lease
and operate its assets, (ii) is duly authorized, qualified or licensed to
do business as a foreign corporation or other organization in, and is in
good standing in, each of the jurisdictions in which its right, title or
interest in or to any of the assets held by it 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 with respect to the Partnership's Subject
Business, 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 to perform its obligations
hereunder and thereunder.
(b) Authorization and Validity of Agreements.
(i) The execution, delivery and performance by Millennium of this
Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized and approved by all necessary
corporate or similar action on its part. This Agreement has been duly
and validly executed and delivered by Millennium 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.
(ii) The execution, delivery and performance by Millennium 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
13
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
Millennium or any member of its Group will be a party will be duly and
validly executed and delivered by Millennium 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.
(c) Lack of Conflicts. Except with respect to the HSR Act as set
forth in Section 4.1(d), each of the execution, delivery and performance by
Millennium 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 with respect to
Millennium, (ii) conflict with, or result in the breach of, any provision
of the charter or by-laws 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 with respect to Millennium, 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 with respect to Millennium.
(d) Certain Fees. Neither Millennium 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.
(e) Joint Proxy Statement. The Joint Proxy Statement was 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, as of the date of the Stockholders' Meetings and insofar
as it relates to the Subject Business of Millennium, did not contain any
untrue statement of a material fact or omit 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.
14
(f) Title to Millennium Units. Without giving effect to this Agreement
or the transactions contemplated hereby, Millennium LP and Millennium GP
each owns the number of Units set forth in Section 2.1 of the Partnership
Agreement opposite its name. Except as contemplated by this Agreement,
there are no outstanding subscriptions, options, convertible securities,
warrants or calls of any kind issued or granted by, or binding upon, the
Partnership or any member of the Millennium Group to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or equity
interest in the Partnership.
SECTION 3
ADDITIONAL AGREEMENTS
3.1 Access to Information. Each of Occidental and the Partnership 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 any other Party and its representatives
reasonable access during normal business hours to the offices, plants,
properties, books and records relating to its Subject Business as such other
Party may reasonably request, (ii) it will furnish or cause to be furnished to
any other Party, such financial and operating data and any other information
with respect to the business and properties of its Subject Business as such
other Party may reasonably request (provided such data and information need only
be furnished to the extent it was prepared in the ordinary course) and (iii) any
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 its Subject Business as such other
Party may reasonably request; provided, that Lyondell and Millennium also agree
to the foregoing provisions to the extent that any of the foregoing remain in
their possession and have not been transferred to the Partnership; provided,
further that, after consultation, to the extent permissible, with such 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 such 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 Subject 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
Agreement.
3.2 Conduct of the Occidental Subject Business Pending the Closing Date.
Occidental agrees that, except as required or contemplated by this Agreement or
otherwise consented to or approved in writing by the Partnership, 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 Subject 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
15
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 Subject
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 Subject 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 Subject
Business;
(b) maintain its books, accounts and records relating to its Subject
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 Subject Business
or to the conduct of its Subject Business and perform all of its material
obligations relating to its Subject 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 Partnership, (x) enter into
any contract, commitment or agreement that would be material to the
operation of its Subject 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 Subject
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
December 31, 1998) relating to its Subject Business;
(d) not waive any material claims or rights relating to its Subject
Business;
(e) after obtaining Knowledge thereof, give notice to the Partnership
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 Subject Business, other than the types
of events, occurrences or other matters referred to in the proviso set
forth in Section 2.2(f)(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
Occidental Contribution Agreement, not being true in all material respects
as of the Closing Date; and
16
(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 Occidental Group and the
Partnership 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. It is acknowledged by the Parties that the
Originator Receivables Sale Agreement dated as of October 27, 1998, by and among
Occidental Receivables Inc., OCC and other parties, has been terminated with
respect to Oxy Petrochemicals.
3.3 Conduct of the Partnership Subject Business Pending the Closing Date.
The Partnership agrees that, except as required or contemplated by approvals or
authorizations (including the Strategic Plan) by or of the Partnership
Governance Committee prior to the date hereof or by this Agreement (including,
without limitation, Schedule 3.3 hereto) or otherwise consented to or approved
in writing by Occidental, 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 Subject Business in all material respects only in a usual, regular and
ordinary manner consistent with the Strategic Plan (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 Subject 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 Subject 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 Subject Business;
(b) maintain its books, accounts and records relating to its Subject
Business in the usual, regular and ordinary manner, comply in all material
respects with all Legal Requirements and contractual obligations applicable
to its Subject Business or to the conduct of its Subject Business and
perform all of its material obligations relating to its Subject Business;
(c) not (i) modify or change in any material respect any of its assets
or dispose of any material asset except for (A) inventory, equipment,
supplies and other assets sold or otherwise disposed of in the ordinary
course of business and (B) any assets that in the ordinary course of
business are replaced with substantially similar assets, (ii) except in the
ordinary course of business after consultation with Occidental, (x) enter
into any contract, commitment or agreement that would be material to the
operation of its Subject Business or use of its 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,
17
(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 Subject 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 December 31, 1998) relating to its
Subject Business; provided, that, for purposes of (i) and (ii), "material"
shall mean a change or modification that is subject to the unanimous voting
requirement of Section 6.7 of the Partnership Agreement;
(d) not waive any material claims or rights relating to its Subject
Business;
(e) after obtaining Knowledge thereof, give notice to Occidental 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 assets or Subject Business, other than the types of events,
occurrences or other matters referred to in the proviso set forth in
Section 2.1(f)(iii);
(f) not take any action that is reasonably likely to result in its
representations and warranties in Section 2 hereof not being true in all
material respects as of the Closing Date;
(g) not to make any distributions that are not in compliance with
Section 3.1 of the Partnership Agreement; and
(h) not agree, whether in writing or otherwise, to take any action it
has agreed pursuant to this Section 3.3 not to take;
provided, however, that notwithstanding anything to the contrary contained in
this Section 3.3, prior to the Closing Date the Occidental Group and the
Partnership 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.
3.4 Further Actions.
(a) Each Party will use its commercially reasonable efforts to take,
or cause to be taken, all other action and do, or cause to be done, all
other things necessary, proper or appropriate to resolve the objections, if
any, as may be asserted by any Authority with respect to the transactions
contemplated hereby under any antitrust laws or regulations; provided that
no Party shall be required to take any action that could have any material
adverse effect on its or its Affiliates' business, operations, prospects,
assets, condition (financial or otherwise) or results of operations or that
would, or would be reasonably likely to, materially frustrate the financial
or other business benefits reasonably expected to be derived by any Party
from the transactions contemplated by this Agreement.
(b) 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
18
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, in the case of Occidental,
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 Subject Business 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.
(c) Occidental shall use its commercially reasonable efforts to
procure all Consents that are necessary to transfer its Subject Business to
the Partnership. Notwithstanding any other provision of this Agreement to
the contrary, the Parties hereto acknowledge and agree that at the Closing
Occidental or any Occidental Partner, as applicable, 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 Parties
and the Partnership will use their commercially reasonable efforts and
cooperate with Occidental and the Occidental Partners (together, 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 Partnership, Occidental and the Occidental Partners 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, Occidental and the Occidental
Partners 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 Occidental
Contribution Agreement, the
19
Partnership shall promptly assume and discharge (or reimburse Occidental or
its Affiliate for) all obligations and liabilities associated with the
benefits of such Contracts so made available to the Partnership.
(d) Occidental shall keep each other Party fully informed from time to
time as any other Party shall reasonably request as to the status of all
Consents being sought by Occidental or a Occidental Partner pursuant to
Section 3.4(c).
(e) Each Party shall furnish to the other Party such information,
cooperation and assistance as reasonably may be requested in connection
with the foregoing.
(f) 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.
3.5 Notifications. Each Party shall notify the other Parties and keep
them advised as to (i) any litigation or administrative proceeding that is
either pending or, to its Knowledge, threatened against such Party which
challenges the transactions contemplated hereby; (ii) in the case of the
Partnership or Occidental, any material damage to or destruction of its Subject
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.
3.6 Employee Matters.
(a) Substantially all employees of Occidental, OCC, Oxy Petrochemicals
or one of the Occidental Partners who are associated primarily with
Occidental's Subject Business shall be offered employment with the
Partnership pursuant to the terms of the Occidental Contribution Agreement.
(b) The Partnership shall provide benefits to such employees who
become employees of the Partnership under the benefit plans and programs of
the Partnership upon employment with the Partnership, subject to the more
specific provisions of the Occidental Contribution Agreement.
(c) No provision of this Agreement shall require OCC, Oxy
Petrochemicals or any of the Occidental Partners to fail to comply with the
terms of any current collective bargaining agreement.
3.7 Partnership Unanimous Consent Items. No action that requires the
consent of Representatives of both Lyondell and Millennium pursuant to Section
6.7 of the Partnership Agreement shall be taken prior to the Closing without the
consent of Occidental (other than actions regarding this Agreement and the
transactions contemplated hereby).
20
SECTION 4
CONDITIONS TO CLOSING
4.1 Conditions Precedent to Obligations of All 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 its Subject Business or Occidental's Subject Business at and
after the Closing; or (iii) the operation by the Partnership of its Subject
Business or Occidental's Subject Business 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 1.2.
(c) Government Licenses and Consents. Occidental 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 its
Subject Business 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 with respect to Occidental's Subject
Business.
(d) HSR Act. The waiting period applicable to the Closing under the
HSR Act shall have expired or been terminated, and no consent, approval,
permit or authorization in connection therewith shall impose terms or
conditions that would have, or would be reasonably likely to have, a
material adverse effect on any Party (assuming the Closing has taken place)
or that would, or would be reasonably likely to, materially frustrate the
financial or other business benefits reasonably expected to be derived by
any Party from the transactions contemplated by this Agreement.
4.2 Conditions Precedent to Obligations of the Partnership. The
obligations of the Partnership under this Agreement are subject to the
satisfaction (or waiver by the Partnership) on or prior to the Closing Date of
each of the following conditions:
21
(a) Accuracy of Representations and Warranties. Notwithstanding any
investigation, inspection or evaluation conducted or notice or Knowledge
obtained by any member of the Equistar Group, all representations and
warranties of members of the Occidental 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.
(b) Performance of Agreements. Occidental 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.
(c) No Material Adverse Change. After the date of this Agreement, no
event, occurrence or other matter shall have occurred that is reasonably
likely to have a Material Adverse Effect with respect to Occidental's
Subject Business, 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 Partnership's Subject
Business and Occidental's Subject Business in a substantially similar way.
(d) Officer's Certificates. The Partnership shall have received a
certificate, dated the Closing Date, signed by the President or a Vice
President of Occidental to the effect that, to the Knowledge of Occidental,
the conditions specified in the above paragraphs have been fulfilled.
4.3 Conditions Precedent to Obligations of Occidental. The obligations of
Occidental under this Agreement are subject to the satisfaction (or waiver by
Occidental) on or prior to the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. Notwithstanding any
investigation, inspection or evaluation conducted or notice or Knowledge
obtained by any member of the Occidental Group, all representations and
warranties of the Partnership and of members of the Lyondell Group and 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 such Persons
contained in such agreements shall be true and correct in all material
respects as of the Closing Date.
(b) Performance of Agreements. Each of the Partnership, Lyondell and
its Affiliates and 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
22
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.
(c) No Material Adverse Change. After the date of this Agreement, no
event, occurrence or other matter shall have occurred that is reasonably
likely to have a Material Adverse Effect with respect to the Partnership's
Subject Business, 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 Partnership's Subject
Business and Occidental's Subject Business in a substantially similar way.
(d) Board of Directors Approval. This Agreement and the Tier 1
Related Agreements, and the transactions contemplated by such agreements,
shall have been duly authorized and approved by Occidental's board of
directors.
(e) Officer's Certificates. Occidental shall have received
certificates, dated the Closing Date, signed by the President or a Vice
President of each of the Partnership, Lyondell and Millennium to the effect
that, to the Knowledge of such Party, the conditions specified in the above
paragraphs have been fulfilled; provided, that, with respect to the
conditions set forth in Sections 4.3(a) and 4.3(b), such certificates shall
only concern the accuracy of representations and warranties and performance
of agreements of the Partnership, the Lyondell Group and the Millennium
Group, respectively.
(f) Third Party Consents. All Consents of any third party listed on
Schedule 4.3(f) shall have been obtained.
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 the Parties;
(b) by the Partnership, by notice to Occidental, if there has been a
material misrepresentation or a breach of an agreement by Occidental 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 Occidental, by notice to the Partnership, if there has been a
material misrepresentation or a breach of an agreement by any of the
Partnership, Lyondell or
23
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 4.3(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 any Party, by notice to each other Party, 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; and
(e) by any Party, by notice to each other Party, in the event that,
for any reason, the Closing does not occur on or before December 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 5.1(e).
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 provided, further,
that nothing herein will relieve any party from liability for damages for any
breach of this Agreement.
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 all of the Parties. No Party may otherwise assign or delegate any of its
rights or obligations under this Agreement without the prior written consent of
all of the other Parties, which consent shall be in the sole and absolute
discretion of each such Party. Any purported assignment or delegation without
such consent shall be void and ineffective.
6.2 Benefits of Agreement Restricted to Parties. This Agreement is made
solely for the benefit of the Parties, 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
24
facsimile with proof of confirmation from the transmitting machine or (ii)
delivered by commercial courier or other hand delivery, as follows:
Equistar Chemicals, LP: Occidental Petroleum Corporation:
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President and Secretary ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Equistar Chemicals, LP Attention: President
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. Occidental Petroleum Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attention: General Counsel
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lyondell Petrochemical Company: Millennium Chemicals Inc.:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
Chief Corporate Counsel and Senior Vice President,
Corporate Secretary Law and Administration and Secretary
Lyondell Petrochemical Company Millennium Chemicals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
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 matters
contemplated by, or any provisions or terms of, this Agreement or the Related
Agreements, and Occidental shall not make or authorize any public release of
information regarding the Partnership, 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
25
each other, as required by law or stock exchange rule or as necessary for the
assertion or enforcement of contractual rights.
6.6 Confidentiality Agreement. Lyondell, on behalf of the Partnership,
and Occidental have heretofore entered into the Confidentiality Agreement
relating to the exchange between Lyondell and the Partnership, on the one hand,
and Occidental and the Occidental Partners, 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 Agreement by the parties thereto. The Confidentiality Agreement
shall remain in full force and effect in accordance with its terms until the
earlier of Closing or its expiration date. The Partnership and Millennium shall
be bound by, and shall be entitled to the benefits of, such Confidentiality
Agreement to the same extent as if they were parties thereto.
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; (vii) each exhibit, appendix,
attachment and schedule to this Agreement is a part of this Agreement; and
(viii) any reference herein or in any schedule hereto to any agreements entered
into prior to the date hereof shall include any amendments or supplements made
thereto.
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 Section 2.8 of the Occidental
Contribution Agreement, and except as provided on Schedule 6.10, all
reasonable out-of-pocket costs, fees and expenses incurred at any time by
any Party in connection with the negotiation, execution and delivery of
this Agreement, the satisfaction of the conditions to Closing under this
Agreement and the consummation of the transactions contemplated hereby
shall be reimbursed by the Partnership (if the cost, fee or expense was
incurred by a Party other than the Partnership) and if incurred or
reimbursed by the Partnership shall be shared by Lyondell, Millennium and
Occidental pro rata in accordance with the relative interests to be held by
26
their Subsidiaries in the Partnership after Closing; provided, however,
that if any one expense item or series of directly related expenses exceeds
$5 million, all of such expense or expenses in excess of such $5 million
shall be paid by the Party incurring such expense.
(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 ▇▇▇▇▇▇▇▇-▇▇▇▇ 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.
27
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.
6.14 Action by the Partnership. Any determination (including as to the
satisfaction of any and all conditions precedent to the obligations of the
Partnership set forth in Section 4.2 of this Agreement), consent, approval,
waiver, other action or right to be made, given, taken or exercised by the
Partnership pursuant to or as contemplated by this Agreement shall be subject to
the Partnership Governance Committee unanimous voting requirements set forth in
Section 6.7 of the Partnership Agreement; provided, however, that the
Partnership's exercise of its right of termination set forth in Section 5.1(b)
of this Agreement shall only require the approval of either two or more
Representatives of Lyondell or two or more Representatives of Millennium, acting
separately.
[SIGNATURE PAGES FOLLOW]
28
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.
EQUISTAR CHEMICALS, LP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Operating
Officer
OCCIDENTAL PETROLEUM CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President and Controller
LYONDELL PETROCHEMICAL COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
MILLENNIUM CHEMICALS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
Title: Senior Vice President
[Signature Page to Master Transaction Agreement]
29
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) Canadian Occidental Petroleum Ltd. and any entities controlled by
it shall not be considered an Affiliate of the Occidental Group, (ii) Suburban
Propane Partners, L.P. and any entities controlled by it shall not be considered
an Affiliate of the Millennium Group, (iii) neither the Partnership nor any
entity controlled by it shall be considered an Affiliate of the Occidental
Group, the Lyondell Group or the Millennium Group, (iv) no member of the
Occidental Group, the Lyondell Group or the Millennium Group shall be considered
an Affiliate of the Partnership and (v) the Partnership shall not be considered
an Affiliate of any member of the Occidental Group, 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.
"Amended and Restated Partnership Agreement" shall mean that certain Amended and
Restated Partnership Agreement of the Partnership to be executed and delivered
at the Closing in substantially the form attached hereto as Exhibit A.
"Assumed Liabilities" shall have the meaning assigned to such term in the
Occidental Contribution Agreement.
"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.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Closing" shall have the meaning set forth in the seventh WHEREAS clause of this
Agreement.
"Closing Date" shall have the meaning set forth in Section 1.3.
A-1
"Confidentiality Agreement" shall mean that certain Confidentiality Agreement
dated December 11, 1997 between Lyondell and Occidental.
"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" shall have the meaning assigned to such term in the Occidental
Contribution Agreement.
"Contributed Assets" shall have the meaning assigned to the term "Assets" in the
Occidental Contribution Agreement.
"Encumbrance" shall mean any lien, charge, encumbrance, security interest, title
defect, option or any other restriction or third-party right.
"ERISA" shall mean the Employee Retirement Income Security Act, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Equistar Group" shall mean the Partnership, the Initial Partners, Lyondell,
Millennium and Millennium Petrochemicals.
"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 2.1(e).
"Government License" shall have the meaning assigned to such term in the
Occidental Contribution Agreement.
"Group" shall mean the Equistar Group, the Occidental Group, the Lyondell Group
or the Millennium Group, as appropriate.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Initial Master Transaction Agreement" shall mean the Master Transaction
Agreement dated July 25, 1997, between Lyondell and Millennium, as amended.
"Initial Partners" shall mean Lyondell LP, Lyondell GP, Millennium LP and
Millennium GP.
A-2
"Joint Proxy Statement" shall mean the Joint Proxy Statement of Lyondell and
Millennium dated October 17, 1997.
"Knowledge" shall mean with respect to any Party the actual knowledge of (i) any
current plant manager, (ii) any current officer of such Party having
responsibilities with respect to an applicable Subject Business or the
transactions contemplated in this Agreement, (iii) in the case of Occidental,
any current officer of OCC, Oxy Petrochemicals or of an Occidental Partner
having responsibilities with respect to Occidental's Subject Business or the
transactions contemplated in this Agreement, and (iv) any current 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.
"Lyondell" shall have the meaning set forth in the first paragraph of this
Agreement.
"Lyondell Asset Contribution Agreement" shall mean that certain Asset
Contribution Agreement dated December 1, 1997, to which Lyondell and the
Partnership are parties.
"Lyondell GP" shall mean Lyondell Petrochemical G.P. Inc., a Delaware
corporation and a wholly owned Subsidiary of Lyondell.
"Lyondell Group" shall mean Lyondell, Lyondell LP and Lyondell GP.
"Lyondell LP" shall mean Lyondell Petrochemical L.P. Inc., a Delaware
corporation and a wholly owned Subsidiary of Lyondell.
"Lyondell Note" shall mean that certain promissory note in the aggregate
principal amount of $345 million dated December 1, 1997 payable to the
Partnership by Lyondell LP.
"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 applicable
Party or Subject Business (taken as a whole), as the case may be.
"Millennium" shall have the meaning set forth in the first paragraph of this
Agreement.
"Millennium Asset Contribution Agreement" shall mean that certain Asset
Contribution Agreement dated December 1, 1997, to which Millennium
Petrochemicals and the Partnership are parties.
"Millennium GP" shall mean Millennium GP LLC, a Delaware limited liability
company and an indirect, wholly owned Subsidiary of Millennium.
"Millennium Group" shall mean Millennium, Millennium Petrochemicals, Millennium
LP and Millennium GP.
A-3
"Millennium LP" shall mean Millennium LP LLC, a Delaware limited liability
company and an indirect, wholly owned Subsidiary of Millennium.
"Millennium Petrochemicals" shall have the meaning set forth in the third
WHEREAS clause of this Agreement.
"Occidental" shall have the meaning set forth in the first paragraph of this
Agreement.
"Occidental Contribution Agreement" shall mean that certain Agreement and Plan
of Merger and Asset Contribution between the Occidental Partners, Oxy
Petrochemicals and the Partnership to be executed and delivered at the Closing
in substantially the form attached hereto as Exhibit B.
"Occidental Assumed Debt" shall mean the Lease Intended for Security, dated
December 18, 1991, among OCC, the institutions listed on Schedule I thereto,
Norwest Bank Minnesota, National Association, as Agent and Chemical Bank and the
Bank of Nova Scotia, as Information Agents, and having an amount outstanding as
of the date of this Agreement of $205 million.
"Occidental Group" shall mean Occidental, OCC, Oxy CH, and the Occidental
Partners and, prior to the Closing, Oxy Petrochemicals.
"Occidental Partners" shall mean PDG Chemical, OCC Sub and Oxy CH Sub.
"OCC" shall have the meaning set forth in the fourth WHEREAS clause of this
Agreement.
"OCC Sub" shall have the meaning set forth in the fourth WHEREAS clause.
"Oxy CH" shall have the meaning set forth in the fourth WHEREAS clause of this
Agreement.
"Oxy CH Sub" shall have the meaning set forth in the fourth WHEREAS clause of
this Agreement.
"Oxy Petrochemicals" shall have the meaning set forth in Section 1.5(d).
"Parties" shall have the meaning set forth in the seventh WHEREAS clause of this
Agreement.
"Partnership" shall have the meaning set forth in the first paragraph of this
Agreement.
"Partnership Agreement" shall mean the Agreement of Limited Partnership of the
Partnership dated October 10, 1997.
"Partnership Governance Committee" shall mean the "Partnership Governance
Committee" as defined in the Partnership Agreement.
"PDG Chemical" shall have the meaning set forth in the fourth WHEREAS clause of
this Agreement.
A-4
"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.
"Representatives" shall mean the "Representatives," as defined in the
Partnership Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning set forth in Section 2.2.(e).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stockholders' Meetings" shall mean the special stockholders meetings of each of
Lyondell and Millennium held November 20, 1997.
"Strategic Plan" shall mean the Five-Year Strategic Plan adopted by the
Partnership Governance Committee, as amended and modified prior to the date
hereof pursuant to action of the Partnership Governance Committee, as set forth
in minutes of their meetings.
"Subject Business" shall mean (i) in the case of Occidental, the "Contributed
Business" as defined in the Occidental Contribution Agreement, including the
Contributed Assets and the Assumed Liabilities related thereto; (ii) in the case
of each of Lyondell and Millennium, their respective "Contributed Businesses" as
defined in their respective Asset Contribution Agreements dated December 1,
1997; and (iii) in the case of the Partnership, the business of the Partnership,
which consists substantially of the Subject Business of Lyondell and Millennium.
"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, except, in the case of Lyondell, Lyondell-CITGO Refining Company Ltd.
and Equistar Chemicals, LP.
"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.
"Unit" shall mean a unit representing a partnership interest in the Partnership.
▇-▇
▇▇▇▇▇▇▇▇ ▇
TO
MASTER TRANSACTION AGREEMENT
LIST OF RELATED AGREEMENTS
--------------------------
Tier 1 Related Agreements
1. Amended and Restated Agreement of Limited Partnership
2. Agreement and Plan of Merger and Asset Contribution among the Occidental
Partners, Oxy Petrochemicals and the Partnership
3. Amended and Restated Parent Agreement
4. Sales Agreement (Ethylene)
Tier 2 Related Agreements
1. Agreements the form of which is an exhibit to the Occidental Agreement
and Plan of Merger and Contribution.
2. Operating Agreement by and between the Partnership and OCC.
3. Tolling Processing Agreement by and between the Partnership and OCC.
4. Amended and Restated Indemnity Agreement among OCC, PDG Chemical, Oxy
Petrochemicals, OCC Sub, Oxy CH Sub, Lyondell GP, Lyondell LP,
Millennium GP, Millennium LP and Millennium America Inc., a Delaware
corporation, amending and restating the Indemnity Agreement, dated
December 1, 1997.
5. Agreement between OCC and the Partnership obligating OCC to provide a
guarantee for the collection of $419,700,000 of Partnership debt and
obligating the Partnership to extend or refinance such debt for a term
at least equivalent to the term of such guarantee.
6. Agreement between OCC and the Partnership obligating the Partnership to
prepay or restructure the Occidental Assumed Debt within an agreed
period of time.
7. Promissory Note for $419,700,000 of the Partnership payable to Oxy CH
Sub.
B-1
8. Promissory Note for $75 million of the Partnership payable to Millennium
LP.
9. Agreement for Assumption of Lease Intended for Security dated December
18, 1991 ($205 million).
10. Assignment and Assumption Agreement related to Lease Intended for
Security dated March 28,1994 (Pitney ▇▇▇▇▇).
11. Agreement regarding termination of Lyondell guaranty of certain
Partnership railcar leases.
12. Sublease by OCC to the Partnership related to 1990 railcar lease.
13. Sublease by Oxy Petrochemicals to the Partnership related to 1995
railcar lease.
14. Tax Indemnity Agreement between OCC and the Partnership related to the
1990 railcar sublease.
15. Tax Indemnity Agreement between Oxy Petrochemicals and the Partnership
related to the 1995 railcar sublease.
16. Master Arbitration Amendment to Related Agreements.
17. First Amendment to Lyondell Asset Contribution Agreement.
18. First Amendment to Millennium Asset Contribution Agreement.
19. Transition Services Agreement between the Partnership and OCC.
20. Pipeline Acquisition Agreement between OCC and the Partnership related
to the Cyclohexane pipeline.
B-2
SCHEDULE 2.1
TO
MASTER TRANSACTION AGREEMENT
EXCEPTIONS TO REPRESENTATIONS
AND WARRANTIES OF THE PARTNERSHIP
---------------------------------
None.
SCHEDULE 2.2
TO
MASTER TRANSACTION AGREEMENT
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF OCCIDENTAL
----------------------------------------------------------
None.
SCHEDULE 2.3
TO
MASTER TRANSACTION AGREEMENT
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF LYONDELL
--------------------------------------------------------
None.
SCHEDULE 2.4
TO
MASTER TRANSACTION AGREEMENT
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES OF MILLENNIUM
----------------------------------------------------------
None.
SCHEDULE 3.3
TO
MASTER TRANSACTION AGREEMENT
SELECTED CAPITAL PROJECTS AND CEILING EXPENDITURES
--------------------------------------------------
EQUISTAR CHEMICALS, LP
CAPITAL EXPENDITURE SUMMARY
AMOUNTS IN MILLIONS
1998 1999 2000 2001 2002
-------------------------------------
Petrochemicals (1):
Asset Maintenance $ 18 $ 22 $ 34 $ 34 $ 34
HS&E 10 10 10 10 10
Profit generating - minor 13 17 24 24 34
Profit generating - major 72 66 90 121 67
-------------------------------------
Total 113 115 158 189 145
-------------------------------------
Polymers (2):
Asset maintenance $ 7 $ 10 $ 12 $ 16 $ 14
HS&E 10 10 13 13 13
Profit generating - minor 11 16 24 20 23
Profit generating - major 59 111 40 47 35
-------------------------------------
Total 87 147 89 96 85
-------------------------------------
Other 4 4 4 4 4
-------------------------------------
Total capital expenditures $ 204 $ 266 $ 251 $ 289 $ 234
=====================================
Lyondell $ 223 $ 139 $ 128 $ 207 $ 143
Millennium 82 140 181 147 91
Synergies (101) (13) (58) (65) -
-------------------------------------
Total capital expenditures $ 204 $ 266 $ 251 $ 289 $ 234
=====================================
(1) The $25 petrochemical capital reduction for 1998 and 1999 was $12 and $13
for asset maintenance and profit generating - minor, respectively.
(2) The $25 polymer capital reduction for 1998 and 1999 was $2, $3 and $20 for
asset maintenance, HS&E and profit generating - minor, respectively.
EQUISTAR CHEMICALS, LP
SUMMARY OF MAJOR PROFIT GENERATING PROJECTS
PETROCHEMICALS
AMOUNTS IN MILLIONS
1998 1999 2000 2001 2002
-------------------------------------
Lyondell:
JOV (33%) - - 30 65 65
Feed frac - - 20 53 -
AOF engineering study 15 5 - - -
BT debottleneck 7 15 - - -
BD debottleneck - - 8 - -
C3 = pumping upgrade 2 - - - -
BD pipeline connection - 2 - - -
Aspentech 3 4 2 1 -
C2 = pipeline to LA 50 - - - -
-------------------------------------
77 26 60 119 65
-------------------------------------
Lyondell synergies:
C3 = pipeline conn 5 - - - -
Accelerate Bd projects 5 3 (8) - -
Delete ethylene pipeline to LA (50) - - - -
C5 debottleneck 5 - - - -
-------------------------------------
(35) 3 (8) - -
-------------------------------------
Lyondell 42 29 52 119 65
-------------------------------------
Millennium:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ ▇ ▇ - - -
▇▇▇▇▇▇▇▇ debottleneck - Clinton - - 11 - -
JOV - 30 65 65 -
ARU recycle rerouting - ▇▇▇▇▇▇▇ - 1 7 - -
MCS upgrade - - - 2 2
-------------------------------------
5 37 83 67 2
-------------------------------------
Millennium synergies:
JOV (30) (65) (65)
QE1 feed flex 25 30 20
-------------------------------------
25 - (45) (65) -
-------------------------------------
Millennium 30 37 38 2 2
-------------------------------------
Petrochemicals $ 72 $ 66 $ 90 $ 121 $ 67
=====================================
EQUISTAR CHEMICALS, LP
SUMMARY OF MAJOR PROFIT GENERATING PROJECTS
POLYMERS
AMOUNTS IN MILLIONS
1998 1999 2000 2001 2002
-------------------------------------
Lyondell:
MTO line 4/Original spending 62 37 - - -
Future major projects - - - 20 10
Victoria expansion/pipeline 20 3 - - -
Comm Development/Tech 1 1 5 5 5
Research center 9 9 - - -
-------------------------------------
92 50 5 25 15
-------------------------------------
Lyondell synergies:
MTO line 4/pipeline (25) 46 10 - -
Research center (9) (9) - - -
-------------------------------------
(34) 37 10 - -
-------------------------------------
Lyondell 58 87 15 25 15
-------------------------------------
Millennium:
LDPE High EVA expansion 1 10 4 - -
LDPE debottleneck - Pt ▇▇▇▇▇▇ - 2 5 1 -
PP supported catalyst - ▇▇▇▇▇▇ - 4 1 - -
LDPE silo vent emissions - Pt ▇▇▇▇▇▇ - - 2 8 -
LDPE silo vent emissions - Clinton - - 3 3 -
LLDPE metallocene license - - 10 - -
Mid size projects - 8 10 10 20
-------------------------------------
1 24 35 22 20
-------------------------------------
Millennium synergies:
LLDPE metallocene license - - (10) -
-------------------------------------
- - (10) - -
-------------------------------------
Millennium 1 24 25 22 20
-------------------------------------
Polymers $ 59 $ 111 $ 40 $ 47 $ 35
=====================================
SCHEDULE 4.3(F)
TO
MASTER TRANSACTION AGREEMENT
THIRD PARTY CONSENTS AS CONDITIONS PRECEDENT TO CLOSING
-------------------------------------------------------
(OCCIDENTAL)
Any consent required in connection with the following:
1. Lease Intended for Security, dated as of December 18, 1991, among
Occidental Chemical Corporation, as Lessee, The Institutions Listed on
Schedule I thereto, as Lessors, Norwest Bank Minnesota, N.A., as Agent and
Chemical Bank and The Bank of Nova Scotia, as Information Agents, as
amended.
2. Lease Intended for Security, dated as of March 28, 1994, between Occidental
Chemical Corporation as Lessee and Pitney ▇▇▇▇▇ Credit Corporation, as
Lessor.
3. Partnership Agreement, dated as of April 30, 1987, by and among PDG
Acquisition Company, E. I. du Pont de Nemours and Company and PPG Chemicals
Inc., as amended.
4. Lease Agreement, dated as of April 30, 1987 between PPG Industries, Inc.
and PD Glycol.
SCHEDULE 6.10
TO
TO MASTER TRANSACTION AGREEMENT
CERTAIN EXPENSES
----------------
Each Party shall bear (i) all investment banking fees and disbursements
incurred by it and (ii) all costs, fees and expenses incurred by it in
connection with obtaining consents or waivers from holders of indebtedness for
borrowed money of such Party or its Affiliates.
Costs incurred pursuant to that certain joint retention letter agreement
between ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Occidental Chemical Corporation and Equistar Chemicals,
LP dated December 17, 1997 shall be borne by the parties as provided for
therein.