<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1997
REGISTRATION NO. 333-27099
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ARCO CHEMICAL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 51-0104393
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
3801 WEST CHESTER PIKE, NEWTOWN SQUARE, PENNSYLVANIA 19073-2387
(610) 359-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT J. MILLSTONE, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
3801 WEST CHESTER PIKE, NEWTOWN SQUARE, PENNSYLVANIA 19073-2387
(610) 359-3255
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on the Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED
PROSPECTUS
- ----------
ARCO CHEMICAL COMPANY
$350,000,000
DEBT SECURITIES
------------
ARCO Chemical Company, a Delaware corporation (the "Company"), intends to
issue from time to time debt securities (the "Debt Securities") from which the
Company will receive up to an aggregate principal amount of $350,000,000, or
the equivalent thereof in one or more foreign currencies or composite
currencies, including European Currency Units ("ECU"). The Debt Securities may
be sold for U.S. dollars or one or more foreign or composite currencies, and
the principal of and any interest on the Debt Securities may likewise be
payable in U.S. dollars or one or more foreign or composite currencies.
The Debt Securities will be offered to the public on terms determined by
market conditions at the time of sale. The Debt Securities may be issued in one
or more series with the same or various maturities at par or a premium or with
an original issue discount. The specific designation, aggregate principal
amount, currency, purchase price, maturity, rate and time of payment of
interest, whether such Debt Securities are to be issued in book-entry form, any
other specific terms and any listing on a securities exchange of the Debt
Securities in respect of which this Prospectus is being delivered (the "Offered
Debt Securities") are set forth in the accompanying prospectus supplement (the
"Prospectus Supplement") together with the terms of offering of the Offered
Debt Securities.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The Debt Securities will be sold directly, through agents designated from
time to time, through underwriting syndicates represented by managing
underwriters, by underwriters without a syndicate, or by dealers. If any agents
of the Company or any underwriters are involved in the sale of the Offered Debt
Securities, the names of such agents or underwriters and any applicable
commissions or discounts are set forth in the Prospectus Supplement. The net
proceeds to the Company from such sale are also set forth in the Prospectus
Supplement. This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
------------
The date of this Prospectus is
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE TO WHICH
THEY RELATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") relating to its
business, financial position, results of operations and other matters. Such
reports, proxy statements and other information filed by the Company with the
Commission pursuant to the informational requirements of the Exchange Act can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
as well as the Commission's regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can be obtained
from the Commission by mail at prescribed rates. Requests should be directed
to the Commission's Public Reference Section located at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information can
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which one or more of the Company's
securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is made
to the Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the securities offered thereby.
Statements contained herein concerning any document filed as an exhibit are
not necessarily complete and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein the following documents:
(i) the Company's Quarterly Report on Form 10-Q for the period ended June 30,
1997, (ii) the Company's Current Report on Form 8-K, dated July 21, 1997,
(iii) the Company's Current Report on Form 8-K, dated June 27, 1997, (iv) the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 1997
and (v) the Company's Annual Report on Form 10-K for the year ended December
31, 1996, all of which have been filed with the Commission under File No. 1-
9678.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the Debt Securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information incorporated
herein by reference (not including exhibits to such information, unless such
exhibits are specifically incorporated by reference into such information).
Requests should be directed to: Manager, Investor Relations, ARCO Chemical
Company, 3801 West Chester Pike, Newtown Square, Pennsylvania 19073-2387
(Telephone: (610) 359-3171 or (610) 359-2000).
ARCO CHEMICAL COMPANY
ARCO Chemical Company, a Delaware corporation ("ARCO Chemical" or the
"Company"), is a leading international manufacturer and marketer of
intermediate chemicals and specialty products used in a broad range of
consumer goods.
The Company's principal executive offices are located at 3801 West Chester
Pike, Newtown Square, Pennsylvania 19073-2387 (Telephone: (610) 359-2000).
The Company is the successor to certain portions of the ARCO Chemical
Division of Atlantic Richfield Company, a Delaware corporation ("ARCO"). On
June 9, 1987, ARCO transferred substantially all the assets and liabilities of
the oxygenates and polystyrenics business of the then ARCO Chemical Division
to the Company in exchange for 80,000,001 shares of the Company's common
stock, par value $1.00 (the "Common Stock"). On October 5, 1987, the Company
completed an initial public offering of 19,550,000 additional shares of Common
Stock. As of the date of this Prospectus, ARCO's 80,000,001 shares represent
approximately 82.5 percent of the outstanding shares of Common Stock.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds to be received from the sale of the Offered Debt Securities will
be used for general corporate purposes, including capital expenditures.
Additional information on the use of net proceeds from the sale of Offered
Debt Securities may be set forth in the Prospectus Supplement relating to such
Offered Debt Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for the periods indicated. The ratios of earnings to fixed charges for
the years ended December 31, 1992 through December 31, 1996 have been derived
from the audited financial statements of the Company for such periods and the
ratio for the six months ended June 30, 1997 has been derived from the
unaudited financial statements of the Company for such period.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------ JUNE 30,
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES.......... 2.9 3.5 4.8 7.6 5.2 3.0
</TABLE>
For purposes of these calculations, earnings consist of pretax income from
continuing operations, adjusted for interest expense and a rental expense
factor. Fixed charges consist of interest expense, capitalized interest and a
rental expense factor.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Offered Debt Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply
to the Offered Debt Securities will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
The Debt Securities will be unsecured obligations issued under the
Indenture, dated as of June 15, 1988 (the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee"). The following statements
are subject to the detailed provisions of the Indenture, a copy of which is
incorporated by reference into the Registration Statement. Wherever particular
provisions of the Indenture or terms defined therein are referred to herein or
in the Prospectus Supplement, such provisions or terms are incorporated by
reference as a part of the statements made, and the statements are qualified
in their entirety by such reference. References in italics are to the
Indenture. Capitalized terms used but not otherwise defined herein have the
meaning given to them in the Indenture.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit the amount of
debt, either secured or unsecured, that may be issued by the Company under the
Indenture or otherwise.
Debt Securities may be issued from time to time up to an aggregate principal
amount of $350,000,000 and will be offered to the public on terms determined
by market conditions at the time of sale. The Debt Securities may be issued in
one or more series with the same or various maturities, at par or a premium or
with an original issue discount.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered thereby: (i) the designation of and any limit upon
the aggregate principal amount of such Debt Securities; (ii) the percentage of
principal amount at which such Debt Securities will be issued; (iii) the date
or dates on which such Debt Securities will mature; (iv) the currency of
denomination of such Debt Securities, which may be in Dollars or in any
Foreign Currency or composite currency, including ECUs; (v) the designation of
the currency or currencies in which payment of the principal of, and premium,
if any, and the interest on such Debt Securities will be made, and whether, in
the event the currency of denomination is other than Dollars but the payment
of principal thereof, and premium, if any, and interest thereon is payable in
Dollars, payment of the principal of, and premium, if any, or the interest on
such Debt Securities, at the election of a Holder thereof, may instead be
payable in the currency of denomination; (vi) the rate or rates (which may be
fixed or floating) per annum, if any, at which such Debt Securities will bear
interest; (vii) the times at which any such interest will be payable; (viii)
any index used to determine the amounts of payments of principal of, and
premium, if any, and interest on such Debt Securities; and (ix) any redemption
terms or other specific terms associated with such Debt Securities.
One or more series of Debt Securities may be sold at a substantial discount
from their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. One or more series of
Debt Securities may be floating rate debt securities or floating rate debt
securities which are exchangeable for fixed rate debt securities. Federal
income tax consequences and special considerations applicable to any such
series will be described in the Prospectus Supplement relating thereto.
Any series of Debt Securities may be issued in whole or in part in book-
entry form. The Prospectus Supplement relating to a series of Debt Securities
which may be issued in book-entry form will specify the terms and procedures
relating thereto. Debt Securities, to the extent evidenced in registered form,
will be issued in denominations of $1,000 and integral multiples thereof. The
Prospectus Supplement relating to a series of Debt Securities denominated in a
composite currency or any Foreign Currency or Currencies will specify the
4
<PAGE>
denominations thereof. Unless otherwise indicated in the Prospectus Supplement
relating thereto, principal, and premium, if any, and interest are to be
payable at the principal corporate trust office of the Trustee in New York,
New York, or at any paying agency maintained at the time by the Company for
such purpose. At the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears on
the register for Debt Securities. Debt Securities may be presented for
registration of transfer or exchange at such office of the Trustee or at such
other location or locations as may be established pursuant to the Indenture
without any service charge but subject to the limitations provided in the
Indenture.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a
whole by the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Debt Securities or by the
Company if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests
in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided herein, owners of beneficial interests in a
Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
any such Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture governing such
Debt Securities.
Payments of principal, any premium on, and any interest on, individual Debt
Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Security representing
such Debt Securities. Neither the Company, the Trustee for such Debt
Securities, any paying agent, nor the security registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such
5
<PAGE>
Debt Securities, immediately will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will issue individual
Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. In addition, the Company may at
any time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security or Securities representing such
series of Debt Securities. Further, if the Company so specifies with respect
to the Debt Securities of a series, an owner of a beneficial interest in a
Global Security representing Debt Securities of such series may, on terms
acceptable to the Company, the Trustee and the Depositary for such Global
Security, receive individual Debt Securities of such series in exchange for
such beneficial interests, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities. In any such instance,
an owner of a beneficial interest in a Global Security will be entitled to
physical delivery of individual Debt Securities of the series represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Debt Securities registered in its name. Individual Debt
Securities of such series so issued will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
LIMITATION ON LIENS
The Company agrees that neither it nor any Restricted Subsidiary will issue,
assume or guarantee any notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed ("Debt") secured by a mortgage, lien, pledge
or other encumbrance ("Mortgages") upon any Restricted Property without
effectively providing that the Debt Securities (together with, if the Company
so determines, any other indebtedness or obligation then existing or
thereafter created ranking equally with the Debt Securities) shall be secured
equally and ratably with (or prior to) such Debt so long as such Debt shall be
so secured, except that this restriction will not apply to: (a) Mortgages
affecting property of a corporation existing at the time it becomes a
Subsidiary or at the time it is merged into or consolidated with the Company
or a Subsidiary; (b) Mortgages on property existing at the time of acquisition
thereof or incurred to secure payment of the purchase price thereof or to
secure Debt incurred prior to, at the time of, or within 24 months after the
acquisition for the purpose of financing all or part of the purchase price;
(c) Mortgages on any property to secure all or part of the cost of improvement
or construction thereon or Debt incurred to provide funds for such purpose in
a principal amount not exceeding the cost of such improvements or
construction; (d) Mortgages which secure only indebtedness owing by a
Subsidiary to the Company or a Subsidiary; (e) certain Mortgages to government
entities, including pollution control or industrial revenue bond financing;
(f) Mortgages required by any contract or statute in order to permit the
Company or a Subsidiary to perform any contract or subcontract made by it with
or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either; and
(g) subject to certain conditions, any extension, renewal or replacement of
any Mortgage referred to in the foregoing clauses (a) through (f).
Notwithstanding the foregoing, the Company and any one or more Restricted
Subsidiaries may, without securing the Debt Securities, issue, assume or
guarantee Debt which would otherwise be subject to the foregoing restrictions
in an aggregate principal amount which, together with all other such Debt of
the Company and its Restricted Subsidiaries which would otherwise be subject
to the foregoing restrictions (not including Debt permitted to be secured
under clauses (a) to (g) inclusive above) and the aggregate Value of Sale and
Lease-Back Transactions (other than those in connection with which the Company
has voluntarily retired Funded Debt) does not at any one time exceed 10% of
the Consolidated Net Tangible Assets of the Company and its consolidated
Subsidiaries. (Sections 5.03 and 5.04)
6
<PAGE>
The term Restricted Property means any of the Company's or a Subsidiary's
manufacturing plants for the production of oxygenated chemicals or styrene-
based polymers (other than such determined by the Board of Directors not to be
a principal plant) located in the continental United States, and any shares of
capital stock or indebtedness of a Restricted Subsidiary. The term Restricted
Subsidiary means any Subsidiary which owns Restricted Property unless
substantially all such Subsidiary's physical properties are located outside
the continental United States. The term Subsidiary means any corporation at
least a majority of the outstanding securities of which having ordinary voting
power to elect a majority of the board of directors of such corporation is at
the time owned or controlled directly or indirectly by the Company or one or
more Subsidiaries or by the Company and one or more Subsidiaries. The term
Consolidated Net Tangible Assets means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any thereof which are by
their terms extendible or renewable at the option of the obligor thereon to a
time more than 12 months after the time as of which the amount thereof is
being computed), and (ii) all goodwill, trade names, trademarks, patents,
purchased technology, unamortized debt discount and other like intangible
assets, all as set forth on the most recent quarterly balance sheet of the
Company and its consolidated Subsidiaries and computed in accordance with
generally accepted accounting principles. (Article One)
The Company agrees that, if, upon any consolidation or merger of the Company
with or into any other corporation, or upon any sale or conveyance of all or
substantially all of its property to any other corporation, any of the
property of the Company or of any Restricted Subsidiary would thereupon become
subject to any mortgage, lien or pledge, the Company will first secure the
Debt Securities equally and ratably with any other obligations of the Company
or any Restricted Subsidiary then entitled thereto, by a direct lien on all
such property prior to all liens other than any theretofore existing thereon.
(Section 12.02)
LIMITATION ON DEBT
The Indenture does not contain any limitation on the aggregate amount of
Debt that may be assumed by the Company and does not offer any credit or event
risk protection to holders of Debt Securities in the event that the Company
engages in or is the subject of a highly leveraged transaction. The Indenture
provisions described under "Limitation on Liens," however, may have the effect
of inhibiting the Company from engaging in, or preventing the Company from
being the subject of, some types of highly leveraged transactions.
LIMITATION ON SALE AND LEASE-BACK
The Company agrees that neither it nor any Restricted Subsidiary will enter
into any Sale and Lease-Back Transaction with respect to any Restricted
Property with any person (other than the Company or a Subsidiary) unless
either (a) the Company or such Restricted Subsidiary would be entitled,
pursuant to the above provisions, to incur Debt in a principal amount equal to
or exceeding the Value of such Sale and Lease-Back Transaction secured by a
Mortgage on the property to be leased without equally and ratably securing the
Debt Securities, or (b) the Company during or immediately after the expiration
of four months after the effective date of such transaction applies to the
voluntary retirement of its Funded Debt an amount equal to the greater of: (1)
the net proceeds of the sale of the property leased in such transaction or (2)
the fair value in the opinion of the Board of Directors of the leased property
at the time such transaction was entered into (subject to credits for certain
voluntary retirements of Funded Debt, including the Debt Securities).
(Sections 5.04 and 5.05)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 50% in principal amount of
the Debt Securities of each series affected by the modification or amendment
at the time outstanding, to modify the Indenture or any supplemental indenture
or the rights of the Holders of the Debt Securities; provided that no such
modification may without the consent of the Holder of each outstanding Debt
Security thereby affected (a) extend the fixed maturity of any Debt Security,
or reduce the rate of interest, or extend the time of payment of interest
thereon, or reduce the principal amount thereof or the time during which a
premium is payable thereon, or change the currency in which the Debt Security
is payable, or reduce the amount of the principal of an original
issue discount security that would be due and payable upon acceleration or
provable upon bankruptcy without the consent of the Holder of each Debt
7
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Security so affected, (b) reduce the aforesaid percentage of Debt Securities,
the consent of the Holders of which is required for any such modification, or
the consent of the Holders of which is required for any waiver of certain
provisions of or defaults under the Indenture or (c) modify the provisions
heretofore described in this paragraph, except to increase any percentage
described above or to provide that certain other provisions of the Indenture
cannot be modified or waived without the consent of the Holders of all
outstanding Debt Securities of such series so affected. (Section 11.02)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to a particular series
of Debt Securities as being any one of the following events and such other
event as may be established for the Debt Securities of such series: (a) default
for 30 days in any payment of interest on such series; (b) default in any
payment of principal, and premium, if any, on such series when due; (c) default
for 30 days in the payment of any sinking fund installment when due; (d)
default for 90 days after appropriate notice in performance of any other
covenant in the Indenture applicable to that series; or (e) certain events of
bankruptcy, insolvency or reorganization. No Event of Default with respect to a
particular series of Debt Securities issued under the Indenture necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities issued thereunder. In case an Event of Default shall occur and be
continuing with respect to a particular series of Debt Securities, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the Debt
Securities then outstanding of the series (or, in the case of defaults under
(d) or (e), of the Debt Securities of all series) may declare the principal or,
in the case of Debt Securities issued with original issue discount, the amount
specified in the terms thereof, of such series (or of all outstanding Debt
Securities, as the case may be) to be due and payable. Any Event of Default
with respect to a particular series of Debt Securities may be waived by the
Holders of a majority in aggregate principal amount of the outstanding Debt
Securities of such series (or of the outstanding Debt Securities of all series,
in the case of defaults under (d) or (e)), except in each case a failure to pay
principal, or premium, if any, or interest on such Debt Securities. (Section
7.01)
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture. (Section 5.08) The Indenture provides that the Trustee may
withhold notice to the Holders of the Debt Securities of any default (except in
payment of principal, or premium, if any, or interest) if it considers it in
the interest of the Holders of the Debt Securities to do so. (Section 7.08)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 7.04, 8.01 and 8.02)
Subject to such provisions for indemnification and certain other rights of the
Trustee, the Indenture provides that the Holders of a majority in principal
amount of the outstanding Debt Securities of the particular series affected
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Sections 7.07 and 8.02)
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Company may not consolidate with or merge into any corporation, or
transfer its assets substantially as an entirety to any person, unless the
successor corporation or transferee assumes the Company's obligations on the
Debt Securities and under the Indenture, and certain other conditions are met,
except that no such assumption will be required in any case where the Company
transfers all or substantially all its assets located in the United States to
one or more wholly owned Subsidiaries organized under the laws of the United
States or any political subdivision thereof. (Article Twelve) To the extent any
such assets constitute Restricted Property, the Subsidiary to which they were
transferred would be a Restricted Subsidiary. See "Limitation on Liens."
DEFEASANCE
If so specified in the Prospectus Supplement with respect to Debt Securities
of any series, the Company, at its option, (i) will be discharged from any and
all obligations in respect of the Debt Securities of such series
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(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, replace stolen, lost or mutilated Debt Securities
of such series, maintain paying agencies, and hold moneys for payment in
trust) or (ii) will not be subject to provisions of the Indenture described
above under "Limitation on Liens," "Limitation on Sale and Lease-Back" and
"Consolidation, Merger and Transfer of Assets" with respect to the Debt
Securities of such series, in each case if the Company deposits with the
Trustee, in trust, money or U.S. Government Obligations which through the
payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal
(including any mandatory sinking fund payments) of, premium, if any, and
interest on, the Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Debt Securities. In case any Debt
Securities of a series are to be redeemed prior to their Stated Maturity, the
Company must have given the Trustee such irrevocable notices and instructions
as are required for redemption pursuant to the terms of the Debt Securities of
such series. To exercise any such defeasance option, the Company is required
to deliver to the Trustee an Opinion of Counsel to the effect that, if the
Debt Securities of such series are then listed on the New York Stock Exchange,
such Debt Securities would not be delisted as a result of the exercise of such
option. (Sections 14.01, 14.02 and 14.03)
Under Federal income tax laws as of the date of this Prospectus, such
deposit and discharge may be treated as an exchange of the related Debt
Securities. Each holder of such Debt Securities might be required to recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for the Debt Securities and the value of the holder's interest in the
trust. Such holders might be required to include in income a different amount
than would be includable without the discharge. Prospective investors are
urged to consult their own tax advisers as to the consequences of such a
deposit and discharge, including the applicability and effect of tax laws
other than the Federal income tax law.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Bank of New
York also acts as Trustee under the Indenture for the Company's 9.9%
Debentures due 2000, 9.375% Debentures due 2005, 10.25% Debentures due 2010
and 9.8% Debentures due 2020. The Bank of New York also acts as trustee for
ARCO with respect to three public debt issues and extends credit to ARCO in
the ordinary course of business. The Trustee may extend credit to the Company
and its Subsidiaries in the future.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers; (ii) directly to a limited number of institutional purchasers or to a
single purchaser; (iii) through agents; or (iv) through a combination of any
such methods of sale. The Prospectus Supplement with respect to the Offered
Debt Securities sets forth the terms of the offering of the Offered Debt
Securities, including the name or names of any underwriters, the purchase
price of the Offered Debt Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers and any securities
exchanges on which the Offered Debt Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
Debt Securities may be offered to the public through underwriting syndicates
represented by managing underwriters. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Debt Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all the Offered Debt Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Offered Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Debt Securities in respect of which this
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Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Debt Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement and the Prospectus Supplement will set
forth the commission payable for solicitation of such contracts.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for the Company in the
ordinary course of business.
Each series of Offered Debt Securities will be a new issue of securities
with no established trading market. Any underwriters to whom Offered Debt
Securities are sold by the Company for public offering and sale may make a
market in such Offered Debt Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market
for any Offered Debt Securities.
PRINCIPAL STOCKHOLDER; CONTROL OF THE COMPANY
As of the date of this Prospectus, ARCO owns 80,000,001 shares of Common
Stock, representing approximately 82.5% of the outstanding shares of Common
Stock.
Under applicable provisions of the General Corporation Law of Delaware, ARCO
is able, acting alone, to elect the entire Board of Directors of the Company
and to approve any action requiring stockholder approval. ARCO's percentage
ownership of the outstanding voting stock will preclude any acquisition of
control of the Company not favored by ARCO.
ARCO, including its subsidiaries, is one of the largest integrated
enterprises in the petroleum industry. ARCO conducts operations in two
business segments, resources and products. ARCO owns an 82.3% equity interest
in Vastar Resources, Inc., which conducts natural gas and, to a lesser extent,
oil, exploration, production and marketing operations. ARCO also owns a 49.9%
equity interest in Lyondell Petrochemical Company, which operates
petrochemical processing and petroleum refining businesses. In 1994, ARCO
issued Exchangeable Notes due September 15, 1997 ("Notes"), which, at ARCO's
option, can be exchanged at maturity into Lyondell common stock or cash of
equal value. In July, 1997, ARCO finalized its decision to deliver shares of
Lyondell common stock at maturity to settle all of the Notes. Upon the
exchange, ARCO's equity interest in Lyondell will be substantially reduced or
eliminated.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
that are included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of such firm as
experts in accounting and auditing.
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LEGAL OPINIONS
Certain matters relating to the legality of the Debt Securities offered
hereby will be passed upon for the Company by Robert J. Millstone, Esq., Vice
President, General Counsel and Secretary of the Company. As of June 30, 1997,
Mr. Millstone owned an aggregate of 2,357 shares of Common Stock, held
directly and under a Company benefit plan, and options to purchase another
48,300 shares of Common Stock. Mr. Millstone disclaims beneficial ownership of
318 shares of Common Stock held for or in trust for certain family members as
of June 30, 1997. Certain matters relating to the legality of the Debt
Securities offered hereby will be passed upon for any underwriters, agents or
purchasers by Drinker Biddle & Reath LLP.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $106,060.61
Fees and expenses of the Trustee................................ 15,000.00*
Printing and engraving expenses................................. 75,000.00*
Rating Agency fees.............................................. 125,000.00*
Legal fees...................................................... 100,000.00*
Accounting fees................................................. 25,000.00*
Qualification under state securities laws....................... 10,000.00*
Miscellaneous................................................... 14,000.00*
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Total......................................................... $470,060.61
===========
</TABLE>
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* Estimated (except for registration fee) and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 25 of the By-Laws of the Company and to Section
145 of the General Corporation Law of the State of Delaware as set forth
below.
Section 25 of the By-Laws of the Company provides:
(a) Right to Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved or is threatened to be
involved (as a witness or otherwise) in or otherwise requires representation
by counsel in connection with any threatened, pending or completed action,
suit or proceeding, or any inquiry that such person in good faith believes
might lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, and the basis of such proceeding is alleged action or inaction
in an official capacity or in any other capacity while serving as such a
director, officer, employee or agent, shall be indemnified and held harmless
by the Company to the fullest extent authorized by the General Corporation Law
of Delaware, as the same exists or may hereafter be amended (but, in the case
of any such amendment with reference to events occurring prior to the
effective date thereof, only to the extent that such amendment permits the
Company to provide broader indemnification rights than such law permitted the
Company to provide prior to such amendment), against all costs, charges,
expenses, liabilities and losses (including attorneys fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director
or officer (or to serve another entity at the request of the Company) and
shall inure to the benefit of such persons heirs, personal representatives and
estate; provided, however, that, except as provided in paragraph (b) hereof,
the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person
against the Company only if such proceeding (or part thereof) was authorized
prior to its initiation by a majority of the disinterested members of the
Board of Directors of the Company. The rights to indemnification conferred in
this Section shall include the right to be paid by the Company any expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the General Corporation Law of Delaware requires,
payment shall be made to or on behalf of a person only upon delivery to the
Company of an undertaking, by or on behalf of such person, to repay all
amounts so advanced if it shall ultimately be determined that such person is
not entitled to be indemnified under this Section or otherwise. The rights to
indemnification conferred in this Section shall be deemed to be a contract
between the Company and each person who serves in the capacities described
above at any time while this Section is in effect. Any repeal or modification
of this Section shall not in any way diminish any rights to indemnification of
such person or the obligations of the Company arising hereunder.
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(b) Right of claimant to appeal and to bring suit. If a claim under
paragraph (a) of this Section is not paid in full by the Company within thirty
days after a written claim has been received by the Company, the claimant may
submit a written appeal to the Chairman of the Board. If the claim is not paid
in full by the Company within thirty days after a written appeal has been
received by the Chairman of the Board, the claimant may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim. If
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting or defending such claim. In any action brought by
the claimant to enforce a right to indemnification hereunder or by the Company
to recover payments by the Company for expenses incurred by a claimant in a
proceeding in advance of its final disposition, the burden of proving that the
claimant is not entitled to be indemnified under this Section or otherwise
shall be on the Company. Neither the failure of the Company (including its
Board of Directors or its independent legal counsel) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because the claimant has met the
applicable standard of conduct set forth in the General Corporation Law of
Delaware, nor an actual determination by the Company (including its Board of
Directors or its independent legal counsel) that the claimant has not met such
applicable standard of conduct, shall create a presumption that the claimant
has not met the applicable standard of conduct or, in the case of such an
action brought by the claimant, be a defense to the action.
(c) Non-exclusivity of rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, the
Company's Certificate of Incorporation, any By-Law, any agreement, a vote of
Company stockholders or of disinterested Company directors or otherwise, both
as to action in that person's official capacity and as to action in any other
capacity by holding such office, and shall continue after the person ceases to
serve the Company as a director or officer or to serve another entity at the
request of the Company.
(d) Insurance. The Company may maintain insurance, at its expense, to
protect itself and any director or officer of the Company or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the
General Corporation Law of Delaware.
(e) Indemnity agreements. The Company may from time to time enter into
indemnity agreements with the persons who are members of its Board of
Directors and with such officers or other persons as the Board may designate,
such indemnity agreements to provide in substance that the Company will
indemnify such persons to the fullest extent of the provisions of this Section
25.
(f) Indemnification of employees and agents of the Company. The Company may,
under procedures authorized from time to time by the Board of Directors, grant
rights to indemnification, and to be paid by the Company the expenses incurred
in defending any proceeding in advance of its final disposition, to any
employee or agent of the Company to the fullest extent of the provisions of
this Section 25.
Section 145 of the General Corporation Law of the State of Delaware ("DGCL")
provides:
(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe the person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a
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presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made (1)
by a majority vote of the directors who are not parties to such action, suit
or proceeding, even though less than a quorum, or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms
and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation
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or merger which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, and employees or agents,
so that any person who is or was a director, officer, employee or agent of
such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
The Company's Certificate of Incorporation provides that the personal
liability of a director of the Company to the Company or to its stockholders
for monetary damages for breach of fiduciary duty as a director shall be
limited or eliminated to the fullest extent permitted by the DGCL, as amended
from time to time. Section 102(b)(7) of the DGCL permits a Delaware
corporation such as the Company to include in its certificate of incorporation
a provision that eliminates or limits the ability of the corporation and its
stockholders to recover monetary damages from a director for breach of
fiduciary duty as a director; but does not permit such a provision to
eliminate or limit the liability of a director for (i) any breach of the duty
of loyalty to the corporation or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided under certain provisions of Delaware law, or (iv) any
transaction from which the director derived an improper personal benefit.
Under an Administrative Services Agreement between ARCO and the Company,
ARCO provides the Company with insurance coverage under ARCO's Directors' and
Officers' Liability Insurance, which currently has a limit of $205 million, to
the extent authorized by the By-Laws of the Company and the laws of the State
of Delaware.
Under the Underwriting Agreement and Selling Agency Agreement to be entered
into between the Company and the underwriters or selling agents, as the case
may be, the underwriter or selling agents, as applicable, will agree to
indemnify the Company, its directors and certain of its officers against
certain civil liabilities, including civil liabilities under the Securities
Act.
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ITEM 16. EXHIBITS
1.1 Form of proposed Underwriting Agreement.*
1.2 Form of proposed Selling Agency Agreement.*
4 Form of Indenture, dated as of June 15, 1988, between the Company and the
Trustee. (Filed as Exhibit 4.2 to the Company's Registration Statement on
Form S-3 No. 33-23340 and incorporated herein by reference).
5 Opinion (with consent) of Robert J. Millstone, Esq., Vice President,
General Counsel and Secretary of the Company.**
10.1 NLG 300 million (Dutch Guilder) Term Loan Agreement, dated as of March 12,
1997, among ARCO Chemie Nederland, Ltd. (Rotterdam Branch), as Borrower,
the Company, as Guarantor, Chase Investment Bank Limited, as Arranger,
Chase Manhattan International Limited, as Agent, and the Banks listed
therein. (Filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1997).
10.2 Credit Agreement A concerning U.S.$ 200 million 364-day revolving credit
facility, dated as of July 23, 1997, among the Company, the Banks named
therein and The First National Bank of Chicago, as Agent. (Filed as Exhibit
10.2 to the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997).
10.3 Credit Agreement B concerning U.S. $300 million five-year revolving credit
facility, dated as of July 23, 1997, among the Company, the Banks named
therein and The First National Bank of Chicago, as Agent. (Filed as Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997).
12 Statement re computation of ratios.*
23.1 Consent of Robert J. Millstone, Esq., Vice President, General Counsel and
Secretary of the Company (included in Exhibit 5).**
23.2 Consent of Coopers & Lybrand L.L.P.*
24 Power of Attorney.**
25 Statement on Form T-1 of eligibility of Trustee under the Indenture.*
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* Filed herewith.
**Previously filed.
ITEM 17. UNDERTAKINGS
A. Undertaking Pursuant to Rule 415.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
II-5
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Documents Subsequently Filed Under the Exchange Act.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of the counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
D. Undertaking Pursuant to Rule 430A.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN NEWTOWN SQUARE, COMMONWEALTH OF PENNSYLVANIA, ON
AUGUST 1, 1997.
ARCO Chemical Company
By: Ronald R. Remick
---------------------------------
RONALD R. REMICK
VICE PRESIDENT AND TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Anthony G. Fernandes* Chairman of the August 1, 1997
- ------------------------------------- Board and Director
ANTHONY G. FERNANDES
Alan R. Hirsig* President, Chief August 1, 1997
- ------------------------------------- Executive Officer
ALAN R. HIRSIG and Director
Marvin O. Schlanger* Executive Vice August 1, 1997
- ------------------------------------- President, Chief
MARVIN O. SCHLANGER Operating Officer
and Director
Walter J. Tusinski* Senior Vice August 1, 1997
- ------------------------------------- President, Chief
WALTER J. TUSINSKI Financial Officer
and Director
Walter F. Beran* Director August 1, 1997
- -------------------------------------
WALTER F. BERAN
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Marie L. Knowles* Director August 1, 1997
- -------------------------------------
MARIE L. KNOWLES
James A. Middleton* Director August 1, 1997
- -------------------------------------
JAMES A. MIDDLETON
Stephen R. Mut* Director August 1, 1997
- -------------------------------------
STEPHEN R. MUT
Frank Savage* Director August 1, 1997
- -------------------------------------
FRANK SAVAGE
Robert H. Stewart, III* Director August 1, 1997
- -------------------------------------
ROBERT H. STEWART, III
Van Billet Vice President and August 1, 1997
- ------------------------------------- Controller
VAN BILLET (principal
accounting officer)
*By: Robert J. Millstone August 1, 1997
---------------------------------
ROBERT J. MILLSTONE (ATTORNEY IN
FACT)
</TABLE>
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
------- --------
<C> <S>
1.1 Form of proposed Underwriting Agreement.*
1.2 Form of proposed Selling Agency Agreement.*
4 Form of Indenture, dated as of June 15, 1988, between the Company and
the Trustee. (Filed as Exhibit 4.2 to the Company's Registration
Statement on Form S-3 No. 33-23340 and incorporated herein by
reference).
5 Opinion (with consent) of Robert J. Millstone, Esq., Vice President,
General Counsel and Secretary of the Company.**
10.1 NLG 300 million (Dutch Guilder) Term Loan Agreement, dated as of March
12, 1997, among ARCO Chemie Nederland, Ltd. (Rotterdam Branch), as
Borrower, the Company, as Guarantor, Chase Investment Bank Limited,
as Arranger, Chase Manhattan International Limited, as Agent, and the
Banks listed therein. (Filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1997).
10.2 Credit Agreement A concerning U.S. $200 million 364-day revolving
credit facility, dated as of July 23, 1997, among the Company, the
Banks named therein and The First National Bank of Chicago, as Agent.
(Filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1997).
10.3 Credit Agreement B concerning U.S. $300 million five-year revolving
credit facility, dated as of July 23, 1997, among the Company, the
Banks named therein and The First National Bank of Chicago, as Agent.
(Filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the period ended June 30, 1997).
12 Statement re computation of ratios.*
23.1 Consent of Robert J. Millstone, Esq., Vice President, General Counsel
and Secretary of the Company (included in Exhibit 5).**
23.2 Consent of Coopers & Lybrand L.L.P.*
24 Power of Attorney.**
25 Statement on Form T-1 of eligibility of Trustee under the Indenture.*
</TABLE>
- --------
* Filed herewith.
**Previously filed.
<PAGE>
UNDERWRITING AGREEMENT
----------------------
New York, New York
Dated the date set forth
in Schedule I hereto
To the Representatives named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
ARCO Chemical Company, a Delaware corporation (the "Company"), proposes to
sell to the underwriters named in Schedule II hereto (the "Underwriters"), for
whom you are acting as representatives (the "Representatives"), the principal
amount of its securities identified in Schedule I hereto (the "Securities"), to
be issued under an indenture (the "Indenture") dated as of June 15, 1988,
between the Company and The Bank of New York, as trustee (the "Trustee"), as
amended or supplemented at the date of this Agreement. Each series of
Securities may vary, as applicable, as to title, aggregate principal amount,
rank, interest rate or formula and timing of payments thereof, stated maturity
date, redemption and/or repayment provisions, sinking fund requirements,
conversion provisions and any other variable terms established by or pursuant to
the Indenture. If the firm or firms listed in Schedule II hereto include only
the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives," as used herein shall each be deemed to refer to such firm or
firms.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on such
Form (the file number of which is set forth in Schedule I hereto), which
has become effective, for the registration of the Securities under the Act
and no stop order suspending the effectiveness of the registration
statement has been issued under the Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company,
are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with. The Company
may have filed one or more amendments to the registration statement, and
may have used a Preliminary Final Prospectus (as hereinafter defined),
EXHIBIT 1.1
<PAGE>
each of which has previously been furnished to you. Such registration
statement, as amended at the date of this Agreement and including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b)
(the "Rule 430A Information") or Rule 434(d) (the "Rule 434 Information")
of the rules and regulations of the Commission under the Act, meets the
requirements set forth in Rule 415(a)(1)(x) under the Act and complies in
all other material respects with said Rule. The Company proposes to file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5) under the
Act a final supplement to the form of prospectus included in such
registration statement relating to the Securities and the plan of
distribution thereof and has previously advised you of all further
information (financial and other) with respect to the Company to be set
forth therein. Such registration statement, including incorporated
documents, exhibits and financial statements, as amended and read together
at the date of this Agreement, is hereinafter called the "Registration
Statement" (in the event that more than one registration statement is
referred to in Schedule I hereto, the term Registration Statement shall
refer to all such registration statements); such prospectus in the form in
which it appears in the Registration Statement is hereinafter called the
"Basic Prospectus"; and such supplemented form of prospectus, in the form
in which it shall be filed with the Commission pursuant to Rule 424(b)
(including the Basic Prospectus as so supplemented) is hereinafter called
the "Final Prospectus." Any preliminary form of the Final Prospectus which
has heretofore been filed pursuant to Rule 424 is hereinafter called the
"Preliminary Final Prospectus." Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the "Exchange Act")
on or before the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement or the Final
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement or the
Final Prospectus, as the case may be, and on or prior to the Closing Date
(as hereinafter defined) and therefore deemed to be incorporated therein by
reference. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to mean and include all such
-2-
<PAGE>
financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be.
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Act, when the Registration Statement
became effective, when, prior to the Closing Date (as hereinafter defined),
any amendment to the Registration Statement becomes effective (including
any document incorporated by reference in such Registration Statement and
the filing of the Company's most recent Annual Report on Form 10-K with the
Commission), and at the Closing Date (as hereinafter defined), (i) the
Registration Statement, as amended as of any such time, and the Final
Prospectus, as amended or supplemented and when read together with the
other information in the Final Prospectus as of any such time, and the
Indenture, as amended or supplemented as of any such time, did or will
comply in all material respects with the applicable requirements of the
Act, the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the
Exchange Act and the respective rules and regulations thereunder and (ii)
neither the Registration Statement, as amended as of any such time and
including the Rule 430A Information or Rule 434 Information, if any, deemed
to be a part thereof, nor the Final Prospectus, as amended or supplemented
as of any such time, did or will contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, the Company makes no representations or
warranties as to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification under the Trust
Indenture Act of the Trustee (the "Form T-1") or (ii) the information
contained in or omitted from the Registration Statement or the Final
Prospectus or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration Statement
and the Final Prospectus; for this purpose, the information set forth in
each of the first paragraph following the table and footnotes thereto on
page S-1 and under the caption "Underwriting" on page S-__ in the Final
Prospectus shall constitute the only information furnished to the Company
in writing by an Underwriter through the Representatives expressly for use
in the Registration Statement in connection with the offer and sale of the
Securities (the "Provided Information").
-3-
<PAGE>
(c) Except as otherwise stated in the Registration Statement and
Final Prospectus (as such terms are defined in Section 1(a) to include
incorporated documents, exhibits, financial statements, amendments,
additional registration statements and prospectus supplements), since the
respective dates of the Registration Statement and Final Prospectus, (i)
there has been no material adverse change in the financial condition,
earnings or business affairs of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect") and (ii) there have been no
transactions entered into by the Company or any of its subsidiaries, other
than those arising in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise.
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business or is subject to
no material liability or disability by reason of failure to be so qualified
in any such jurisdiction.
(e) As of the date hereof, each of ARCO Chemie Nederland, Ltd., a
Delaware corporation ("ACN"), ARCO Chemical Delaware Company, a Delaware
corporation ("ACDC"), The Meadows Corporation, a Delaware corporation
("Meadows" and together with ACN and ACDC, the "Corporate Subsidiaries" and
individually a "Corporate Subsidiary"), ARCO Chimie France SNC, a French
partnership ("ACF"), POSM II Limited Partnership, L.P., a Delaware limited
partnership ("POSM"), and ARCO Chemical Technology, L.P., a Delaware
limited partnership ("ACT") is a "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X promulgated under
the Act) (each, a "Subsidiary" and, collectively, the "Subsidiaries").
Each Corporate Subsidiary has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not result in
a Material Adverse Effect. Except as otherwise stated in the
-4-
<PAGE>
Registration Statement and the Final Prospectus, all of the issued and
outstanding capital stock of each Corporate Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of any Corporate
Subsidiary was issued in violation of preemptive or other similar rights of
any securityholder of such Corporate Subsidiary. ACF owns or has valid
rights to use, all items of real and personal property which are material
to its business, free and clear of all liens, encumbrances and claims which
may materially interfere with its financial condition, results of
operations or business. POSM and ACT have been duly formed and are validly
existing as limited partnerships under the Uniform Delaware Limited
Partnership Act, with full partnership power and authority to own or lease
their properties and conduct their business and are duly qualified or
registered as foreign limited partnerships for the transaction of business
under the laws of each jurisdiction in which their ownership or lease of
property or the conduct of their business requires such qualifications,
except where the failure to be so qualified or registered would not have a
Material Adverse Effect. The Company, directly or indirectly, owns a 100%
interest in ACF and ACT and a ____ % interest in POSM, in each case free
and clear of any liens, encumbrances or claims which could produce a
Material Adverse Effect.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The Indenture, as amended or supplemented at the date of this
Agreement, has been duly authorized, executed and delivered, has been duly
qualified under the Trust Indenture Act, and constitutes a legal, valid and
binding instrument enforceable against the Company in accordance with its
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity); and the Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture, as
amended or supplemented at the date of this Agreement, and delivered to and
paid for by the Underwriters pursuant to this Agreement, in the case of the
Underwriters' Securities, or by the purchasers thereof pursuant to Delayed
Delivery Contracts, in the case of any Contract Securities (as defined
below), will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the
-5-
<PAGE>
Indenture, as amended or supplemented at the date of this Agreement.
(h) There is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Company of a character required to be disclosed in
the Registration Statement which is not adequately disclosed in the
Registration Statement or the Final Prospectus, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an exhibit,
which is not described or filed as required; and the statements included or
incorporated in the Final Prospectus describing any legal proceedings or
material contracts or agreements relating to the Company fairly summarize
such matters.
(i) Neither the issue and sale of the Securities, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof or of any Delayed Delivery Contracts will conflict with,
result in a breach of, or constitute a default under the Restated
Certificate of Incorporation or By-Laws of the Company or the terms of any
indenture or other material agreement or instrument to which the Company is
a party or bound, or any order or regulation applicable to the Company of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company.
(j) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Final Prospectus will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act").
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the principal amount of the Securities set forth opposite
such Underwriter's name in Schedule II hereto, except that, if Schedule I hereto
provides for the sale of Securities pursuant to delayed delivery arrangements,
the respective principal amounts of Securities to be purchased by the
Underwriters shall be as set forth in Schedule II hereto, less the respective
amounts of Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to Delayed Delivery
Contracts as hereinafter provided are herein called "Contract Securities."
-6-
<PAGE>
If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company may authorize
or approve. The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the Representatives, for the
account of the Underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Securities for which Delayed
Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will make Delayed Delivery Contracts in all cases
where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any responsibility
in respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set forth
in Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Securities set forth opposite the name of such Underwriter bears to
the aggregate principal amount set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the aggregate principal amount set forth in Schedule II hereto, less the
aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriters'
Securities shall be made at the office, on the date and at the time specified in
Schedule I hereto, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 8 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer of
immediately available funds to a bank account designated by the Company.
Certificates for the Underwriters' Securities shall be registered in such names
and in such
-7-
<PAGE>
denominations as the Representatives may request at least one full business day
in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 10:00 AM on the business day prior to the Closing Date.
4. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or supplement
(including the Final Prospectus) to the Basic Prospectus unless the Company has
furnished you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, the Company will cause the Final Prospectus to be filed with
the Commission pursuant to Rule 424(b) within the time period prescribed and
will provide evidence to you of such filing. The Company will promptly advise
the Representatives (i) when the Final Prospectus shall have been filed with the
Commission pursuant to Rule 424(b), (ii) when any amendment to the Registration
Statement shall have been filed or become effective, (iii) of the receipt of any
comments from the Commission, (iv) of any request by the Commission for any
amendment of the Registration Statement or amendment of or supplement to the
Final Prospectus or for any additional information, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose,
(vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vii) of
any change in the rating assigned by any nationally recognized statistical
rating organization to the Securities of the Company, or the public announcement
by any nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of the
Securities, or the withdrawal by any nationally recognized statistical rating
organization of its rating of the Securities and (viii) of the happening of any
event which makes untrue any statement of a material fact made in the
Registration Statement (insofar as the Registration Statement relates to or
covers the Underwriters' Securities) or the Final Prospectus, or which requires
the making of a change in the Registration Statement or the Final Prospectus in
order to make any material statement therein not misleading. The Company will
use its best efforts to prevent the issuance of any stop order, as described in
clause (v) of the third sentence of this paragraph (a), and, if issued, to
obtain as soon as possible the withdrawal thereof.
-8-
<PAGE>
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this Section 4, an
amendment or supplement which will correct such statement or omission or effect
such compliance.
(c) The Company will make generally available to its securityholders
and to the Representatives as soon as practicable, but not later than 45 days
after the end of the 12-month period beginning at the end of the current fiscal
quarter of the Company, an earnings statement (which need not be audited) of the
Company and its subsidiaries, covering such 12-month period, which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge upon request, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto which shall
become effective on or prior to the Closing Date and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act or the
Exchange Act, as many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(e) The Company will use reasonable efforts in cooperating with the
Underwriters to arrange for the qualification of the Securities for sale under
the laws of such jurisdictions as the Representatives may designate, will
maintain such qualifications in effect so long as required for the distribution
of the Securities and will arrange for the determination of the legality of the
Securities for purchase by institutional investors.
(f) The Company will pay all reasonable costs incident to the
performance of its obligations hereunder, including the costs of the
preparation, printing, delivering and filing of all documents relating to the
offering; the preparation, issuance and delivery of the Securities, or any
certificates for the Securities, to the Underwriters, including any transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Underwriters; the costs of any filings, if any, with
the National Association of Securities
-9-
<PAGE>
Dealers, Inc. relating to the Securities; the fees paid to rating agencies in
connection with the rating of the Securities; the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including transfer
agents and registrars); as well as the fees and disbursements of the Trustee;
the fees and expenses incurred with respect to the listing of the Securities and
the reasonable costs (including filing fees and fees and disbursements of
counsel to the Underwriters) of qualifying the Securities as provided in
paragraph (e) of this Section 4 and preparing memoranda relating thereto.
Except as provided in this paragraph (f) and in Section 6 hereof, the
Underwriters shall pay all costs incident to the performance of their
obligations hereunder, including the fees and disbursements of their counsel,
any transfer taxes on any Securities sold by them and the expenses of
advertising any offering of the Securities made by them.
(g) Until the business day following the Closing Date, the Company
will not, without the consent of the Representatives, offer or sell, or announce
the offering of, any debt securities covered by the Registration Statement or
any other registration statement filed under the Act.
(h) The Company will from time to time timely update through the
Closing Date its representations in Section 1(e) hereof to the extent required
by additions to or deletions from its universe of significant subsidiaries (as
defined in Rule 1-02 of Regulation S-X), which updating shall, for purposes
hereof, constitute a revision to the definitions of "Corporate Subsidiaries" and
"Subsidiaries".
5. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwriters' Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened and
the Final Prospectus shall have been filed with the Commission in the
manner and within the time period required by Rule 424(b).
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(b) The Company shall have furnished to the Representatives the
opinion of the General Counsel or an Associate General Counsel of the
Company, dated the Closing Date, to the effect that:
(i) each of the Company and its Corporate Subsidiaries has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business or is subject
to no material liability or disability by reason of failure to be so
qualified in any such jurisdiction. POSM and ACT have been duly
formed and are validly existing as limited partnerships under the
Uniform Delaware Limited Partnership Act, with full partnership power
and authority to own or lease their properties and conduct their
business and are duly qualified or registered as foreign limited
partnerships for the transaction of business under the laws of each
jurisdiction in which their ownership or lease of property or the
conduct of their business requires such qualifications, except where
the failure to be so qualified or registered would not have a Material
Adverse Effect;
(ii) all the outstanding shares of capital stock of each
Corporate Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, all outstanding shares of capital stock
of such Corporate Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims, liens or
encumbrances. None of the outstanding shares of capital stock of any
Corporate Subsidiary was issued in violation of preemptive or other
similar rights of any securityholder of each Corporate Subsidiary.
The Company, directly or indirectly, owns a 100% interest in ACF and
ACT and a ____ % interest in POSM which, to the knowledge of such
counsel, after due inquiry, is in each case free and clear of any
liens, encumbrances or claims which could produce a Material Adverse
Effect;
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(iii) the Company's authorized equity capitalization is as
set forth in the Final Prospectus; the Securities conform to the
description thereof contained in the Final Prospectus; and, if the
Securities are to be listed on the New York Stock Exchange,
authorization therefor has been given, subject to official notice of
issuance and evidence of satisfactory distribution, or the Company has
filed, or has undertaken to file, a preliminary listing application
and all required supporting documents with respect to the Securities
with the New York Stock Exchange, and such counsel has no reason to
believe that the Securities will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution;
(iv) the Indenture, as amended or supplemented as of the
Closing Date, has been duly authorized, executed and delivered, has
been duly qualified under the Trust Indenture Act, and constitutes a
legal, valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity); and the Securities have been
duly authorized and, when executed and authenticated in accordance
with the provisions of the Indenture, as amended or supplemented as of
the Closing Date, and delivered to and paid for by the Underwriters
pursuant to this Agreement, in the case of the Underwriters'
Securities, or by the purchasers thereof pursuant to Delayed Delivery
Contracts, in the case of any Contract Securities, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture, as amended or supplemented as of the
Closing Date;
(v) the information in the Final Prospectus under
"Description of Debt Securities" or any caption purporting to describe
any such Securities and "Certain United States Federal Income Tax
Considerations," in the Annual Report on Form 10-K under "Legal
Proceedings," as updated in Part II, Item 1 of the succeeding
Quarterly Reports on Form 10-Q, and in the Registration Statement
under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's Restated Certificate of
Incorporation or By-laws or legal proceedings, or legal conclusions,
has been reviewed by such counsel and is accurate in all material
respects.
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(vi) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus; all descriptions in the
Registration Statement of contracts and other documents, to which the
Company or its subsidiaries are a party are accurate in all material
respects, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not described
or filed as required; and the statements included or incorporated in
the Final Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly summarize such
matters;
(vii) the Registration Statement and any amendments
thereto have become effective under the Act; any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b) and to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or threatened, and
the Registration Statement, the Final Prospectus and each amendment
thereof or supplement thereto as of their respective effective or
issue dates (other than the financial statements and other financial
information contained therein as to which such counsel need express no
opinion) complied as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; and such counsel has no reason to believe
that the Registration Statement or any amendment thereof, as of the
later of the time it became effective or the time of filing by the
Company with the Commission of the latest subsequent amendment thereto
or Annual Report on Form 10-K, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus, as amended or supplemented,
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
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(viii) this Agreement and any Delayed Delivery Contracts
have been duly authorized, executed and delivered by the Company;
(ix) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained;
(x) the Company is not an "investment company" within
the meaning of the 1940 Act; and
(xi) to the best knowledge of such counsel, the Company
is not in violation of its Restated Certificate of Incorporation or
By-laws.
(xii) neither the issue and sale of Securities, nor the
consummation of any other of the transactions herein contemplated, nor
the fulfillment of the terms hereof or of any Delayed Delivery
Contracts will conflict with, result in a breach of, or constitute a
default under the Restated Certificate of Incorporation or By-Laws of
the Company or the terms of any material indenture or other agreement
or instrument known to such counsel and to which the Company or any of
its subsidiaries is a party or bound, or any order or regulation known
to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its subsidiaries.
In rendering such opinion, such counsel may state that he expresses no opinion
as to the laws of any jurisdiction outside the United States and may rely (a) as
to matters involving the application of laws of any jurisdiction other than the
Federal law of the United States or the General Corporation Law of the State of
Delaware, to the extent deemed proper and specified in such opinion, upon the
opinion of other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters or, if satisfactory to counsel for
the Underwriters, upon his review of the laws of such jurisdictions; and (b) as
to matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
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(c) The Representatives shall have received from Drinker Biddle &
Reath LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, any Delayed Delivery Contracts, the Registration Statement, the Final
Prospectus and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by a financial Senior Vice President or Vice
President, the Treasurer or the Manager of Corporate Finance, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Registration Statement, the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no proceedings
for that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus, there has been no Material Adverse
Effect, except as set forth or contemplated in the Final Prospectus.
(e) At the date of this Agreement, Coopers & Lybrand shall have
furnished to the Representatives a letter, in form and substance satisfactory to
the Representatives, dated the date of this Agreement (or, with respect to
matters involving changes or developments since the respective dates as of which
specified information is given in the Final Prospectus, as of a date not more
than three business days prior to the date of such letter or letters), of the
type described in the American Institute of Certified Public Accountants'
Statement on Auditing Standards No. 72.
In addition, at the Closing Date, Coopers & Lybrand shall have furnished to the
Representatives a letter or letters, dated as of the Closing Date (or, with
respect to matters involving changes or developments since the respective dates
as of which specified
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financial information is given in the Final Prospectus, as of a date not more
than three business days prior to the date of such letter or letters), stating
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the letter referred to in the first
sentence of this paragraph (e) and confirming in all material respects the
conclusions and findings set forth in such prior letter.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there shall not
have been (i) any change or decrease specified in the letter or letters referred
to in paragraph (e) of this Section 5 or (ii) any change, or any development
involving a prospective change, in or affecting the business affairs or business
prospects, financial condition or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above, in the
judgment of the Representatives, so materially impairs the investment quality of
the Securities as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the Registration
Statement and the Final Prospectus.
(g) Prior to the Closing Date, the Company shall have furnished to
the Representatives and counsel for the Underwriters such further information,
certificates, documents, and opinions (including tax opinions) as the
Representatives or such counsel may reasonably request.
(h) The Company shall have accepted Delayed Delivery Contracts in any
case where sales of Contract Securities arranged by the Underwriters have been
approved by the Company.
(i) At the Closing Date, the Securities shall have ratings accorded
by Moody's Investors Service, Inc. or Standard & Poor's Corporation, and the
Company shall have delivered to the Representatives a letter, dated as of such
date, from each such rating organization, or other evidence reasonably
satisfactory to the Representatives, confirming that the Securities have such
ratings. Between the execution and delivery of this Agreement and the Closing
Date, there shall not have been any decrease in the ratings of any of the
Company's debt securities by Moody's Investors Service, Inc. or Standard &
Poor's Corporation.
(j) At the Closing Date, the Securities shall have been approved for
listing, subject only to official notice of issuance, if and as specified in the
Final Prospectus.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall
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not be in all material respects reasonably satisfactory in form and substance to
the Representatives and their counsel, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing. Any such
termination or cancellation shall be without liability of any party to any other
party except to the extent provided in Sections 4(f), 6, 7 and 10 hereof.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act, against
any and all losses, claims, damages, liabilities and expenses, joint or several,
to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for
the registration of the Securities as originally filed or in any amendment
thereof, including the Rule 430A Information and the Rule 434 Information deemed
to be a part thereof, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating, preparing
or defending any such loss, claim, damage, liability or action, and to the
extent of the aggregate
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amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, provided that,
subject to Section 7(d) below, any such settlement is effected with the written
consent of the Company and; provided, however, that (i) the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein concerning
the Provided Information or Form T-1 and (ii) such indemnity with respect to the
Basic Prospectus or any Preliminary Final Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage, liability or expense
purchased the Securities which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus as amended or
supplemented) excluding documents incorporated therein by reference at or prior
to the confirmation of the sale of such Securities to such person in any case
where such delivery is required by the Act and the untrue statement or omission
of a material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to the Provided Information. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action by an indemnified party, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but failure promptly to notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party
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promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Representatives in the case of
paragraph (a), representing the indemnified parties under paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employee
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification
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provided for in paragraph (a) of this Section 7 is due in accordance with its
terms, but is for any reason held by a court to be unavailable from the Company
on grounds of policy or otherwise, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses
(including legal or other expenses reasonably incurred in connection with
investigation or defending same) to which the Company and one or more of the
Underwriters may be subject (i) in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount bears to the sum of such discount and the purchase price of the
Securities specified in Schedule I hereto and the Company is responsible for the
balance or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and of the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other equitable
considerations; provided, however, that (y) in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the
underwriting discount applicable to the Securities purchased by such Underwriter
hereunder and (z) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The relative
fault of the Company, on the one hand, and the Underwriters, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. For purposes
of this Section 7, each person who controls an Underwriter within the meaning of
the Act shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement, and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (y) and (z) of this
paragraph (e). The Underwriters' respective obligations to contribute pursuant
to this Section 7 are several in proportion to the number or aggregate principal
amount, as the case may be, of Securities set forth opposite their respective
names in Schedule II to this Agreement, and not joint. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against
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another party or parties under this paragraph (e), notify such party or parties
from whom contribution may be sought, but failure promptly to notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve the party or parties from whom contribution may
be sought from any other obligation it or they may have otherwise than under
this paragraph (e).
8. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bear to the aggregate amount of
Securities set opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i) there
has been, since the date hereof or since the respective dates as of which
information is given in the Final Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
trading in any securities of the Company has been suspended or limited by the
Commission or the New York Stock Exchange or,
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if trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or in the Nasdaq National Market shall have been
suspended or limited or minimum or maximum prices shall have been established,
or maximum ranges for prices have been required, by either exchange or by such
system by order of the Commission, the NASD or any other governmental authority,
(ii) a banking moratorium shall have been declared either by Federal or New York
State authorities or, if the Securities include Securities denominated or
payable in, or indexed to, one or more foreign or composite currencies, by the
relevant authorities in the related foreign country or countries, (iii) there
shall have occurred any material adverse change in the financial markets in the
United States or, if the Securities include Securities denominated or payable
in, or indexed to, one or more foreign or composite currencies, in the
international financial markets, or any outbreak or material escalation of
hostilities or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 6 and 7 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at ARCO Chemical Company, 3801 West Chester
Pike, Newtown Square, Pennsylvania 19073-2387, to attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the officers
-22-
<PAGE>
and directors and controlling persons referred to in Section 7 hereof and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without regard to the conflict
of laws or principles thereof. Specified times of day refer to New York City
time.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return the enclosed duplicate hereof, whereupon this letter,
along with all counterparts, and your acceptance shall represent a binding
agreement between the Company and the Representatives.
Very truly yours,
ARCO CHEMICAL COMPANY
By:
-----------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in Schedule I hereto.
By:
-----------------------------
Title:
By:
-----------------------------
Title:
-23-
<PAGE>
For themselves and the other several Underwriters,
if any, named in Schedule II to the foregoing
Agreement.
SCHEDULE I
Underwriting Agreement dated
Registration Statement No. 333-27099
Representatives:
Title, Purchase Price and Description of Securities:
Title:
Principal Amount: $
Purchase Price:
Sinking fund provisions:
Redemption provisions:
Other provisions: As set forth in Prospectus Supplement dated
Closing Date, Time and Location:
Delayed Delivery Arrangements:
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Underwriter Amount
- ----------- ------
<S> <C>
$
------
Total .............................................................. $
======
</TABLE>
<PAGE>
SCHEDULE III
Delayed Delivery Contract
, 1997
[Insert name and address of
lead representative]
Dear Sirs:
The undersigned hereby agrees to purchase from ARCO Chemical Company (the
"Company"), and the Company agrees to sell to the undersigned, on ,
19 (the "Delivery Date"), $ principal amount of the Company's
(the "Securities") offered by the Company's (the "Securities") offered by the
Company's Prospectus dated , 19 , and related Prospectus
Supplement dated , 19 , receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal amount thereof, plus
[accrued interest] [amortization of original issue discount], if any, thereon
from , 19 , to the date of payment and delivery, and on the
further terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be made
on or before [____], New York City time on the Delivery Date to or upon the
order of the Company by wire transfer of immediately available funds to a bank
account designated by the Company, upon delivery to The Depository Trust Company
("DTC") of the Securities in definitive fully registered form registered in the
name of DTC or its nominee and in such authorized denominations as the
undersigned may request by written or telegraphic communication addressed to the
Company not less than three full business days prior to the Delivery Date. If
no request is received, the Securities will be issued in a denomination equal to
the aggregate principal amount of Securities to be purchased by the undersigned
on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date, and the obligation of the Company to sell and
deliver Securities on the Delivery Date, shall be subject to the conditions (and
neither party shall incur any liability by reason of the failure thereof) that
(1) the purchase of Securities to be made by the undersigned, which purchase the
undersigned represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject, and (2) the Company, on or before the Delivery Date,
shall have sold to certain underwriters (the
<PAGE>
"Underwriters") such principal amount of the Securities as is to be sold to them
pursuant to the Underwriting Agreement referred to in the Prospectus and
Prospectus Supplement mentioned above. Promptly after completion of such sale
to the Underwriters, the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied by a copy of the
opinion of counsel for the Company delivered to the Underwriters in connection
therewith. The obligation of the undersigned to take delivery of and make
payment for the Securities, and the obligation of the Company to cause the
Securities to be sold and delivered, shall not be affected by the failure of any
purchaser to take delivery of and make payment for the Securities pursuant to
other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract is
acceptable to the Company, it is required that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned, as of the date first above written,
when such counterpart is so mailed or delivered.
<PAGE>
This agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to the conflict of laws principles
thereof.
Very truly yours,
-----------------------------------
(Name of Purchaser)
By:
---------------------------------
(Signature and Title of Officer)
------------------------------------
(Address)
Accepted:
ARCO Chemical Company,
By:
-----------------------
(Authorized Signature)
<PAGE>
SELLING AGENCY AGREEMENT
------------------------
New York, New York
Dated the date set forth
in Schedule I hereto
To the Agents named in
Schedule I hereto
Ladies and Gentlemen:
ARCO Chemical Company, a Delaware corporation (the "Company"), proposes to
authorize each of the firms named in Schedule I hereto (each, an "Agent", and
collectively, the "Agents") to act as its agent to solicit orders for all or
part of its securities identified in Schedule I hereto (the "Securities"), to be
issued under an indenture (the "Indenture") dated as of June 15, 1988, between
the Company and The Bank of New York, as trustee (the "Trustee"), as amended or
supplemented at the date of this Agreement.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Agents as set forth in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (c) hereof
(a) If the offering of the Securities is a Delayed Offering (as specified
in Schedule I hereto), paragraph (i) below is applicable and, if the offering of
the Securities is a Non-Delayed Offering (as so specified), paragraph (ii) below
is applicable.
(i) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on such
Form (the file number of which is set forth in Schedule I hereto),
including a basic prospectus, which has become effective, for the
registration under the Act of the offering and sale of Securities and no
stop order suspending the effectiveness of the registration statement
(including any Rule 462(b) registration statement) has been issued under
the Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. Such registration statement, as
amended at the date of this Agreement, meets the requirements set forth in
Rule 415(a)(1)(ix) or (x) under the Act and complies in all material
respects with said Rule. The Company has included in such registration
statement, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the form
of basic prospectus included in such registration statement relating to the
Securities and the plan of distribution thereof (the "Prospectus
Supplement"). In connection with the sale of Securities, the Company
proposes to file with the Commission pursuant to the applicable paragraph
of Rule 424(b) under the Act her supplements to the Prospectus Supplement
specifying the interest rates, maturity dates and, if appropriate, other
terms of the Securities sold pursuant hereto or the offering thereof.
(ii) The Company meets the requirements for the use of Form S-3 under
the Act and has filed with the Commission a registration statement on such
Form (the file number of which is set forth in Schedule I
Exhibit 1.2
<PAGE>
hereto), including a basic prospectus, which has become effective for
registration under the Act of the offering and sale of the Securities and
no stop order suspending the effectiveness of the registration statement
(including any Rule 462(b) registration statement) has been issued under
the Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. Such registration statement, as
amended at the date of this Agreement, meets the requirements set forth in
Rule 415(a)(ix) or (x) under the Act and complies in all other material
respects with said Rule. The Company will next file with the Commission a
final Prospectus Supplement relating to the Securities in accordance with
Rules 430A and 424(b)(1) or (4). The Company has included in such
registration statement, as amended at its effective date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with respect to the
Securities and the offering thereof. As filed, such final Prospectus
Supplement shall contain all Rule 430A information, together with all other
such required information, with respect to the Securities and the offering
thereof. In connection with the sale of the Securities of the Company
proposes to file with the Commission pursuant to the applicable paragraph
of Rule 424(b) under the Act further supplements to the Prospectus
Supplement specifying the interest rates, maturity dates and, if
appropriate, other terms of the Securities sold pursuant hereto or the
offering thereof.
(b) As of the date hereof, when the Final Prospectus is first filed
pursuant to Rule 424(b) under the Act, at the date of delivery by the Company of
any Securities sold hereunder (a "Closing Date"), when the Registration
Statement became effective, when any amendment to the Registration Statement
becomes effective (including any document incorporated by reference in such
Registration Statement and the filing of the Company's most recent Annual Report
on Form 10-K with the Commission), and at the Closing Date (i) the Registration
Statement, as amended as of any such time and the Final Prospectus, as amended
or supplemented and when read together with the other information in the Final
Prospectus as of any such time, and Indenture did or will comply in all material
respects with the applicable requirements of the Act, the Trust Indenture Act of
1939 (the "Trust Indenture Act") and the Securities Exchange Act of 1934 (the
"Exchange Act") and the respective rules and regulations thereunder and (ii)
neither the Registration Statement, as amended as of any such time and including
the Rule 430A Information or Rule 434 Information, if any, deemed to be a part
thereof, nor the Final Prospectus, as amended or supplemented as of any such
time, did or will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. Notwithstanding the foregoing, the
Company makes no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility and
Qualification under the Trust Indenture Act of the Trustee (the Form "T-1") or
(ii) the information contained in or omitted from the Registration Statement or
the Final Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of any Agent specifically for use in connection with the
preparation of the Registration Statement and the Final Prospectus; for this
purpose, the information set forth in each of the first paragraph following the
table and footnotes thereto on page S-1 and under the caption "_______" on page
S-__ in the Final Prospectus shall constitute the only information furnished to
the Company in writing by the Agents expressly for use in the Registration
Statement in connection with the offer and sale of the Securities (the "Provided
Information").
-2-
<PAGE>
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. "Basic Prospectus" shall mean the form of basic prospectus
relating to the Securities contained in the Registration Statement at the date
on which it became effective. "Preliminary Final Prospectus" shall mean any
preliminary Prospectus Supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to the filing of the Final
Prospectus. "Final Prospectus" shall mean the Basic Prospectus as supplemented
by the Prospectus Supplement. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended and read
together at its effective date. "Rule 415 and Rule 424" refer to such rules
under the Act. "Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A. "Rule
434 Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 434. Any reference herein to the
Registration Statement, the Basic Prospectus, the Prospectus Supplement, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to
and include documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Exchange Act on or before the date of this
Agreement or the issue date of the Basic Prospectus, and Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the date of this
Agreement or the Final Prospectus, as the case may be, and on or prior to the
Closing Date and therefore deemed to be incorporated therein by reference. A
"Non-Delayed Offering", shall mean an offering of securities that is intended to
commence promptly after the effective date of a registration statement, with the
result that, pursuant to Rules 415 and 430A all information (other than Rule
430A Information) with respect to the securities so offered must be included in
such registration statement at the effective date thereof. A "Delayed Offering"
shall mean an offering of securities pursuant to Rule 415 that does not commence
promptly after the effective date of a registration statement with the result
that only information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the Securities is a Non-Delayed
Offering or a Delayed Offering shall be set forth in Schedule I hereto.
(d) Except as otherwise stated in the Registration Statement and Final
Prospectus (as such terms are defined in Sections 1(a) and (c) to include
incorporated documents, exhibits, financial statements, amendments, additional
registration statements and prospectus supplements), since the respective dates
of the Registration Statement and Final Prospectus, (i) there has been no
material adverse change in the financial condition, earnings or business affairs
of the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect") and
(ii) there have been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as one
enterprise.
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its business as
described in the Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material properties
or conducts material business or is subject to no material
-3-
<PAGE>
liability or disability by reason of failure to be so qualified in any such
jurisdiction.
(f) As of the date hereof, each of ARCO Chemie Nederland, Ltd., a Delaware
corporation ("ACN"), ARCO Chemical Delaware Company, a Delaware corporation
("ACDC"), The Meadows Corporation, a Delaware corporation ("Meadows" and
together with ACN and ACDC, the "Corporate Subsidiaries" and individually a
"Corporate Subsidiary"), ARCO Chimie France SNC, a French partnership ("ACF"),
POSM II Limited Partnership, L.P., a Delaware limited partnership ("POSM"), and
ARCO Chemical Technology, L.P., a Delaware limited partnership ("ACT") is a
"significant subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Act) (each, a "Subsidiary" and,
collectively, the "Subsidiaries"). Each Corporate Subsidiary has been duly
organized and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business and is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure to so qualify or be in good standing would not result in a Material
Adverse Effect. Except as otherwise stated in the Registration Statement and
the Final Prospectus, all of the issued and outstanding capital stock of each
Corporate Subsidiary has been duly authorized and is validly issued, fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of capital stock
of any Corporate Subsidiary was issued in violation of preemptive or other
similar rights of any securityholder of such Corporate Subsidiary. ACF owns or
has valid rights to use, all items of real and personal property which are
material to its business, free and clear of all liens, encumbrances and claims
which may materially interfere with its financial condition, results of
operations or business. POSM and ACT have been duly formed and are validly
existing as limited partnerships under the Uniform Delaware Limited Partnership
Act, with full partnership power and authority to own or lease their properties
and conduct their business and are duly qualified or registered as foreign
limited partnerships for the transaction of business under the laws of each
jurisdiction in which their ownership or lease of property or the conduct of
their business requires such qualifications, except where the failure to be so
qualified or registered would not have a Material Adverse Effect. The Company,
directly or indirectly, owns a 100% interest in ACF and ACT and a ____ %
interest in POSM, in each case free and clear of any liens, encumbrances or
claims which could produce a Material Adverse Effect.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The Indenture, as amended or supplemented at the date of this
Agreement, has been duly authorized, executed and delivered, has been duly
qualified under the Trust Indenture Act, and constitutes a legal, valid and
binding instrument enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity); and
the Securities have been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture, as amended or supplemented at
the date of this Agreement, and delivered to and paid for by the purchasers
thereof, constitute legal, valid and binding obligations of the Company entitled
to the benefits of the Indenture, as amended or supplemented at the date of this
Agreement.
-4-
<PAGE>
(i) There is no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator involving the
Company, of a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Registration Statement or the Final
Prospectus, and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus, or
to be filed as an exhibit, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus describing any legal
proceedings or material contracts or agreements relating to the Company fairly
summarize such matters.
(j) Neither the issue and sale of the Securities, nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach of, or constitute a default
under the Restated Certificate of Incorporation or By-Laws of the Company or the
terms of any indenture or other agreement or instrument to which the Company is
a party or bound, or any order or regulation applicable to the Company of any
court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company.
(k) The Company is not, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Final Prospectus will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
2. Appointment as Agent.
(a) Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly on its own
behalf, the Company hereby agrees that Notes will be sold exclusively to or
through the Agents. The Company agrees that it will not appoint any other
agents to act on its behalf, or to assist it, in the placement of the Notes.
(b) The Company shall not sell or approve the solicitation of offers for
the purchase of Notes in excess of the amount which shall be authorized by the
Company from time to time or in excess of the aggregate initial offering price
of Notes registered pursuant to the Registration Statement. The Agents shall
have no responsibility for maintaining records with respect to the aggregate
initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statement.
(c) The Agents shall not have any obligation to purchase Notes from the
Company as principal. However, absent an agreement between an Agent and the
Company that such Agent shall be acting solely as an agent for the Company, such
Agent shall be deemed to be acting as principal in connection with any offering
of Notes by the Company through such Agent. Accordingly, the Agents,
individually or in a syndicate, may agree from time to time to purchase Notes
from the Company as principal for resale to investors and other purchasers
determined by such Agents. Any purchase of Notes from the Company by an Agent
as principal shall be made in accordance with Section 3(a) hereof.
(d) If agreed upon between an Agent and the Company, such Agent, acting
solely as an agent for the Company and not as principal, will solicit offers for
the purchase of Notes. Such Agent will communicate to the Company, orally, each
offer for the purchase of Notes solicited by it on an agency basis other than
those offers rejected by such Agent. Such Agent shall have the right, in its
discretion reasonably exercised, to reject any offer for the purchase of Notes,
in whole or in part, and any such rejection shall not be deemed a breach of its
agreement contained herein. The Company may accept or reject any offer for the
purchase of Notes, in whole or in part. Such Agent shall make reasonable
efforts to assist the Company in obtaining performance
-5-
<PAGE>
by each purchaser whose offer for the purchase of Notes has been solicited by it
on an agency basis and accepted by the Company. Such Agent shall not have any
liability to the Company in the event that any such purchase is not consummated
for any reason. If the Company shall default on its obligation to deliver Notes
to a purchaser whose offer has been solicited by such Agent on an agency basis
and accepted by the Company, the Company shall (i) hold such Agent harmless
against any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay to such Agent any commission to which it would
otherwise be entitled absent such default.
(e) The Company and the Agents agree that any Notes purchased from the
Company by one or more Agents as principal shall be purchased, and any Notes the
placement of which an Agent arranges as an agent of the Company shall be placed
by such Agent, in reliance on the representations, warranties, covenants and
agreements of the Company contained herein and on the terms and conditions and
in the manner provided herein.
3. Purchases as Principal; Solicitations as Agent.
(a) Notes purchased from the Company by the Agents, individually or in a
syndicate, as principal shall be made in accordance with terms agreed upon
between such Agent or Agents and the Company (which terms, unless otherwise
agreed, shall, to the extent applicable, include those terms specified in
Exhibit A hereto and shall be agreed upon orally, with written confirmation
prepared by such Agent or Agents and mailed to the Company). An Agent's
commitment to purchase Notes as principal shall be deemed to have been made on
the basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth. Unless the
context otherwise requires, references herein to "this Agreement" shall include
the applicable agreement of one or more Agents to purchase Notes from the
Company as principal. Each purchase of Notes, unless otherwise agreed, shall be
at a discount from the principal amount of each such Note equivalent to the
applicable commission set forth in Schedule I hereto. The Agents may engage the
services of any broker or dealer in connection with the resale of the Notes
purchased by them as principal and may allow all or any portion of the discount
received from the Company in connection with such purchases to such brokers or
dealers. At the time of each purchase of Notes from the Company by one or more
Agents as principal, such Agent or Agents shall specify the requirements for the
officers' certificate, opinion of counsel and comfort letter pursuant to
Sections 4(g), 4(h) and 4(i) hereof.
(b) On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed by the
Company and an Agent, such Agent, as an agent of the Company, will use its
reasonable efforts to solicit offers for the purchase of Notes upon the terms
set forth in the Final Prospectus. The Agents are not authorized to appoint
sub-agents with respect to Notes sold through them as agent. All Notes sold
through an Agent as agent will be sold at 100% of their principal amount unless
otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, such
Agent will suspend solicitation of offers for the purchase of Notes from the
Company until such time as the Company has advised such Agent that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
-6-
<PAGE>
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule I hereto.
(c) The purchase price, interest rate or formula, maturity date and other
terms of the Notes specified in Exhibit A hereto (as applicable) shall be agreed
upon between the Company and the applicable Agent(s) and specified in a pricing
supplement to the Prospectus (each, a "Pricing Supplement") to be prepared by
the Company in connection with each sale of Notes. Except as otherwise
specified in the applicable Pricing Supplement, the Notes will be issued in
denominations of U.S. $1,000 or any larger amount that is an integral multiple
of U.S. $1,000. Administrative procedures with respect to the issuance and sale
of the Notes (the "Procedures") shall be agreed upon from time to time among the
Company, the Agents and the Trustee. The Agents and the Company agree to
perform, and the Company agrees to cause the Trustee to agree to perform, their
respective duties and obligations specifically provided to be performed by them
in the Procedures.
4. Agreements of the Company. The Company agrees with the Agents that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus) to the Basic Prospectus (other
than by periodic or current reports filed under the Exchange Act or by an
amendment or supplement providing solely for a change in the interest rates
on the Securities or a change in the range of maturities of the Securities
or a change in the principal amount of Securities remaining to be sold or
other changes not material to the offer or sale of the Securities) unless
the Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
provide evidence satisfactory to you of such filing. The Company will
promptly advise the Agents (i) when the initial Final Prospectus shall
have been filed with the Commission pursuant to Rule 424(b), (ii) when any
amendment to the Registration Statement shall have been filed or become
effective, (iii) of the receipt of any comments from the Commission, (iv)
of any request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to the Final Prospectus or for any
additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, (vi) of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (vii) of the
happening of any event which makes untrue any statement of a material fact
made in the Registration Statement or the Final Prospectus or which
requires the making of a change in the Registration Statement or the Final
Prospectus in order to make any material statement therein not misleading,
(viii) of any change in the rating assigned by any nationally recognized
statistical rating organization to the program or any debt securities
(including the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of
the Program or any such debt securities, or the withdrawal by any
nationally recognized statistical rating organization of its rating of the
Program or any such debt securities and (ix) upon the filing of any
supplement to the Final Prospectus not reviewed in advance by the Agents
pursuant to the first sentence of this paragraph (a). The Company will use
its
-7-
<PAGE>
best efforts to prevent the issuance of any stop order, as described in
clause (v) of the third sentence of this paragraph (a), and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to
amend or supplement the Registration Statement or the Final Prospectus to
comply with the Act or the Exchange Act or the respective rules thereunder,
the Company promptly will (i) notify you to suspend solicitation of offers
to purchase Securities and to cease using the Final Prospectus, as then
amended or supplemented, (ii) prepare and file with the Commission, subject
to the first sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or will effect
such compliance and (iii) supply any supplemented Final Prospectus to you
in such quantities as you may reasonably request. If such amendment or
supplement, and any documents, certificates and opinions furnished to you
in connection with the preparation or filing of such amendment or
supplement are satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement with the Commission and upon the
effectiveness of an amendment to the Registration Statement, if such an
amendment is required, resume your obligation to solicit offers to purchase
Securities hereunder.
(c) The Company will make generally available to its securityholders
and to the Agents as soon as practicable, but not later than 45 days after
the end of the 12-month period beginning at the end of the current fiscal
quarter of the Company, an earnings statement (which need not be audited)
of the Company and its subsidiaries, covering such 12-month period, which
will satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Agents and their counsel,
without charge upon request, copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the termination of the offering of the Securities,
as many copies of any Preliminary Final Prospectus and the Final Prospectus
and any amendments thereof and supplements thereto as the Agents may
reasonably request. The Company will pay the expenses of printing all
documents relating to the offering.
(e) The Company will use reasonable efforts in cooperating with the
Agents to arrange for the qualification of the Securities for sale under
the laws of such jurisdictions as the Agents may designate, will maintain
such qualifications in effect so long as required for the distribution of
the Securities and will arrange for the determination of the legality of
the Securities for purchase by institutional investors.
(f) Each acceptance by the Company of an offer for the purchase of
Securities shall be deemed to be an affirmation that the representations
and warranties of the Company contained in this Agreement are true and
correct at the time of such acceptance, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to the purchaser or the purchaser's agent of the Securities
relating to such acceptance, as though made at and as of each such time
(except that such representations and warranties shall be deemed to relate
to the Registration Statement as then in effect and the Final Prospectus
then in use).
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(g) Each time the Final Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates on the Securities or a change in the range of maturities
of the Securities or other changes which, in the reasonable judgment of the
Agent, are not material to the offer or sale of the Securities) the Company
shall furnish or cause to be furnished forthwith to the Agents a
certificate in form satisfactory to the Agents in their reasonable judgment
to the effect that the statements contained in the certificate referred to
in Section 5(d) hereof which were last furnished to the Agents are true and
correct at the time of such amendment or supplement as though made at and
as of such time (except that such statements shall be deemed to relate to
the Registration Statement as then in effect and the Final Prospectus then
in use) or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in said Section 5(d) but modified to relate to
the Registration Statement as then in effect and the Final Prospectus then
in use.
(h) Each time the Final Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates on the Securities or a change in the range of maturities
of the Securities or other changes which, in the reasonable judgment of the
Agent, are not material to the offer or sale of the Securities), the
Company shall furnish or cause to be furnished forthwith to the Agents a
written opinion of the General Counsel or an Associate General Counsel of
the Company, dated the date of delivery of such opinion, of the same tenor
as the opinion referred to in Section 5(b) hereof but modified to relate to
the Registration Statement as then in effect and the Final Prospectus then
in use or, in lieu of such opinion, counsel shall furnish the Agents with a
letter to the effect that the Agents may rely on such last furnished
opinion to the same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinion shall be
deemed to relate to the Registration Statement as then in effect and the
Final Prospectus as in use at the time of delivery of such letter
authorizing reliance).
(i) Each time the Final Prospectus shall be amended or supplemented
to set forth amended or supplemental financial information, the Company
shall cause Coopers & Lybrand forthwith to furnish the Agents a letter,
dated the date of filing of such amendment or supplement with the
Commission, in form satisfactory to the Agent, of the same tenor as the
corresponding portions of the letter referred to in Section 5(e) hereof but
modified to relate to the Final Prospectus then in use and with such
changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the Company,
to the extent such financial statements and other information are available
as of a date not more than three calendar days prior to the date of such
letter; provided, however, that, if the Final Prospectus is amended or
supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter, Coopers & Lybrand may limit the
scope of such letter, which shall be satisfactory in form to you, to the
unaudited financial statements, the related "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and any other
information of an accounting, financial or statistical nature included in
such amendment or supplement, unless, in your reasonable judgment, such
letter should cover other information or changes in specified financial
statement line items.
(j) The Company will pay all reasonable costs incident to the
performance of its obligations hereunder including the costs of the
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preparation, printing, delivering and filing of all documents relating to
the offering; the preparation, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
the Notes in book-entry form and the cost of obtaining CUSIP or other
identification numbers for the Notes, to the Underwriters; the fees and
disbursements of the Company's accountants, counsel and other advisors or
agents (including any calculation agent or exchange rate agent) of the
Trustee; the reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred
from time to time in connection with the transactions contemplated hereby;
the fees and expenses incurred in connection with any listing of Notes on a
securities exchange; the costs of any filings, if any, with the National
Association of Securities Dealers, Inc. (the "NASD") relating to the
Securities, the fees paid to rating agencies in connection with the rating
of the Securities and the costs (including filing fees and fees and
disbursements of counsel to the Agents) of qualifying the Securities as
provided in paragraph (e) of this Section 4 and preparing memoranda
relating thereto. The Company will reimburse the Agents for out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Agents in connection with this Agreement and the sale of Securities
hereunder.
(k) The Company will prepare, with respect to any Notes to be sold
to or through one or more Agents pursuant to this Agreement, a Pricing
Supplement with respect to such Notes in a form previously approved by the
Agents. The Company will deliver such Pricing Supplement no later than
11:00 a.m., New York City time, on the business day following the date of
the Company's acceptance of the offer for the purchase of such Notes and
will file such Pricing Supplement pursuant to Rule 424(b)(3) under the Act
not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
(l) The Company will from time to time timely update through the
Closing Date its representations in Section 1(f) hereof to the extent
required by additions to or deletions from its universe of significant
subsidiaries (as defined in Rule 1-02 of Regulation S-X), which updating
shall, for purposes hereof, constitute a revision to the definitions of
"Corporate Subsidiaries" and "Subsidiaries".
5. Conditions to the Obligations of the Agent. The obligations of each
Agent hereunder shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the date hereof, as
of the date of the effectiveness of the Registration Statement and any amendment
to the Registration Statement (including the filing of any document incorporated
by reference therein), when any supplement to the Final Prospectus is filed with
the Commission, and, as of each date of acceptance by the Company of an offer to
purchase Notes and each Closing Date, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened and
the Final Prospectus shall have been filed with the Commission in the
manner and within the time period required by Rule 424(b).
(b) The Company shall have furnished to the Agents the opinion of
the General Counsel or an Associate General Counsel of the Company, dated
the date of this Agreement, to the effect that:
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(i) each of the Company and its Corporate Subsidiaries has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with corporate power and authority to own its properties and
conduct its business as described in the Final Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business or is subject to no material liability or disability
by reason of failure to be so qualified in any such jurisdiction. POSM
and ACT have been duly formed and are validly existing as limited
partnerships under the Uniform Delaware Limited Partnership Act, with
full partnership power and authority to own or lease their properties
and conduct their business and are duly qualified or registered as
foreign limited partnerships for the transaction of business under the
laws of each jurisdiction in which their ownership or lease of property
or the conduct of their business requires such qualifications, except
where the failure to be so qualified or registered would not have a
Material Adverse Effect;
(ii) the Indenture, as amended or supplemented at the date of
this Agreement has been duly authorized, executed and delivered, has
been duly qualified under the Trust Indenture Act, and constitutes a
legal, valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity); and the Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture, as amended or supplemented at the date of
this Agreement, and delivered to and paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture, as amended or
supplemented at the date of this Agreement;
(iii) the information in the Final Prospectus under
"Description of Debt Securities" or any caption purporting to describe
any such Securities, "Certain United States Federal Income Tax
Considerations" in the Annual Report on Form 10-K under "Legal
Proceedings," as updated in Part II, Item 1 of the succeeding Quarterly
Reports on Form 10-Q, and in the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of legal
matters, the Company's Restated Certificate of Incorporation or By-laws
or legal proceedings, or legal conclusions, has been reviewed by such
counsel and is accurate in all material respects;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus; all descriptions in the Registration
Statement of contracts and other documents, to which the Company or its
subsidiaries are a party are accurate in all material respects, and
there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit which is not described or
filed as required; and the statements included or incorporated in the
Final Prospectus
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<PAGE>
describing any legal proceedings or material contracts or agreements
relating to the Company fairly summarize such matters;
(v) the Registration Statement and any amendments thereto
have become effective under the Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b) and to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or threatened, and
the Registration Statement, the Final Prospectus and each amendment
thereof or supplement thereto as of their respective effective or issue
dates (other than the financial statements and other financial
information contained therein as to which such counsel need express no
opinion) complied as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; and such counsel has no reason to believe
that the Registration Statement, or any amendment thereof, as of the
later of the time it became effective or the time of filing by the
Company with the Commission of the latest subsequent amendment thereto
or Annual Report on Form 10-K, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus, as amended or supplemented,
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the solicitation of orders to
purchase the Securities and the distribution of the Securities by the
Agents and such other approvals (specified in such opinion) as have
been obtained;
(viii) the Company is not an "investment company" within the
meaning of the 1940 Act;
(ix) to the best knowledge of such counsel, the Company is not
in violation of its Restated Certificate of Incorporation or By-laws;
(x) neither the issue and sale of the Securities, nor the
consummation of any other of the actions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach
of, or constitute a default under the Restated Certificate of
Incorporation or By-Laws of the Company or the terms of any material
indenture or other agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries is a party or bound, or
any order or regulation known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries.
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In rendering such opinion, such counsel may state that he expresses no opinion
as to the laws of any jurisdiction outside the United States and may rely (A) as
to matters involving the application of laws of any jurisdiction other than the
Federal law of the United States or the General Corporation Law of the State of
Delaware, to the extent deemed proper and specified in such opinion, upon the
opinion of other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Agents or, if satisfactory to counsel for the
Agents, upon his review of the laws of such jurisdictions; and (B) as to matters
of fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
(c) The Agent shall have received from Drinker Biddle & Reath LLP, counsel
for the Agents, such opinion or opinions, dated the date of this Agreement, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Statement, the Final Prospectus and other related matters as the
Agent may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Agents a certificate of the
Company, signed by a financial Senior Vice President or Vice President, the
Treasurer or the Manager of Corporate Finance, dated the date of this Agreement,
to the effect that the signer of such certificate has carefully examined the
Registration Statement, the Final Prospectus and this Agreement and that:
(i) in the case of the certificate described in Section 4(g)
hereof, the representations and warranties of the Company in this Agreement
are true and correct in all material respects on and as of the date thereof
with the same effect as if made on the date thereof and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the date thereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement, as amended, has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Final Prospectus, there has been no Material Adverse Effect, except
as set forth or contemplated in the Final Prospectus.
(e) At the date of this Agreement, Coopers & Lybrand shall have furnished
to the Agents a letter, in form and substance satisfactory to the Agent, dated
as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified information is
given in the Final Prospectus, as of a date not more than three business days
prior to the date of such letter), of the type described in the American
Institute of Certified Public Accountants' Statement on Auditing Standards No.
72.
(f) On or prior to the date of this Agreement, the Company shall have
furnished to the Agents and counsel for the Agents such further information,
certificates, documents and opinions (including tax opinions) as the Agents or
such counsel may reasonably request.
(g) At the Closing Date, the Notes shall have been approved for listing,
subject only to official notices of issuance, if and as specified in the Final
Prospectus.
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If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Agents and their counsel, this Agreement and all
obligations of the Agents hereunder may be canceled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of Drinker Biddle & Reath LLP, counsel for the Agent, at
Philadelphia National Bank Building, 1345 Chestnut Street, Philadelphia,
Pennsylvania 19107-3496, on the date hereof.
6. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless the Agents and each person who controls the Agents within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages, liabilities and expenses, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Securities as originally filed or in any amendment thereof, including the
Rule 430A Information and the Rule 434 Information deemed to be a part thereof,
if applicable, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating, preparing or defending any
such loss, claim, damage, liability or action, and to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, provided
that, subject to Section 6(d) below, any such settlement is effected with the
written consent of the Company and; provided, however, that (i) the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein concerning
the Provided Information or Form T-1 and (ii) such indemnity with respect to the
Basic Prospectus, the Final Prospectus or any Preliminary Final Prospectus shall
not inure to the benefit of you (or any person controlling you) if the person
asserting any such loss, claim, damage, liability or expense purchased the
Securities which are the subject thereof and such person did not receive a copy
of the Final Prospectus (or the Final Prospectus as supplemented), excluding
documents incorporated therein by reference, at or prior to the confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus, the Final Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
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(b) The Agents agree to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Agent, but only with reference to the Provided Information. This indemnity
agreement will be in addition to any liability which the Agents may otherwise
have.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but failure promptly to notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, representing the indemnified parties under paragraph (a) who
are parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that, if
clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).
(d) No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of
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this Section 6 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company on grounds of policy or otherwise,
the Company and the Agents shall contribute to the aggregate losses, claims,
damages, liabilities and expenses (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to which the
Company and the Agents may be subject (i) in such proportion so that the Agents
are responsible for that portion represented by the percentage that the sales
commission received by the Agents in connection with the Securities from which
such losses, claims, damages and liabilities arise (or, in the case of
Securities sold pursuant to a Purchase Agreement (as defined below), the
aggregate commissions that would have been received by you if such commissions
had been payable) bears to the sum of such commission and the purchase price of
the Securities and the Company is responsible for the balance or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and of the Agents, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other equitable considerations; provided, however, that
(y) in no case shall you be responsible for any amount in excess of the
commissions received by you in connection with the Securities from which such
losses, claims, damages and liabilities arise (or, in the case of Securities
sold pursuant to a Purchase Agreement, the aggregate commissions that would have
been received by you if such commissions had been payable) and (z) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The relative fault of the Company, on the
one hand, and the Agents, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Agents and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. For purposes of this Section 6, each person
who controls the Agents within the meaning of the Act shall have the same rights
to contribution as the Agent, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each Officer of the Company
who shall have signed the Registration Statement and each Director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (y) and (z) of this paragraph (e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but
failure promptly to notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have otherwise than under this paragraph (e).
7. Termination.
(a) This Agreement may be terminated at any time by the Agents or by the
Company for any period of time or permanently by written notice to the other
without liability of any party to any other party except as provided in Sections
4(j) (with respect to out-of-pocket expenses of the Agents incurred prior to
such termination), 6 and 7 hereof and except that, if at the time of termination
an offer for the purchase of Securities solicited by the Agents shall have been
accepted by the Company but the time of delivery to the purchaser of the
Securities relating thereto shall not yet have occurred, the Company shall be
obligated to pay the Agents the sales commissions in respect
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of such purchase. Upon receipt of such notice from the Company, the Agents will
forthwith suspend solicitation of offers to purchase Securities from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed.
(b) The applicable Agent(s) may terminate any agreement by such Agent(s) to
purchase Notes from the Company as principal, immediately upon notice to the
Company, at any time prior to the settlement date relating thereto, if (i) there
has been, since the date of such agreement or since the respective dates as of
which information is given in the Final Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if such Notes are denominated and/or payable in, or indexed
to, one or more foreign or composite currencies, in the international financial
markets, or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development or event involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of such
Agent(s), impracticable to market such Notes or enforce contracts for the sale
of such Notes, or (iii) trading in any securities of the Company has been
suspended or limited by the Commission or a national securities exchange, or if
trading generally on the New York Stock Exchange or the American Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by the
relevant authorities in the country or countries of origin of any foreign or
composite currency in which such Notes are denominated and/or payable, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Final Prospectus, at
the time it was required to be delivered to a purchaser of such Notes, included
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time of such delivery, not misleading.
8. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Agents or the Company or any of the officers,
directors or controlling persons referred to in Section 6 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections
4(j) (with respect to out-of-pocket expenses of the Agents incurred prior to the
termination or cancellation of this Agreement) and 6 hereof shall survive the
termination or cancellation of this Agreement.
9. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Agent(s), will be mailed,
delivered or telegraphed and confirmed to such Agent at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at ARCO Chemical Company, 3801 West Chester
Pike, Newtown Square, Pennsylvania 19073-2387, attention of the Treasurer.
-17-
<PAGE>
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 6 hereof, and no
other person will have any right or obligation hereunder. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Agents and the Company and their
respective successors and the officers and directors and controlling persons
referred to in Section 6 hereof and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes shall be
deemed to be a successor by reason merely of such purchase.
11. Applicable Law. This Agreement will be governed by and construed in
accordance,with the laws of the State of New York without regard to the conflict
of laws principles thereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the Agents.
Very truly yours,
ARCO CHEMICAL COMPANY
By:
---------------------------
The foregoing Agreement is hereby confirmed
and accepted as of the date specified in
Schedule I hereto.
By:
--------------------------
-18-
<PAGE>
SCHEDULE I
Registration Statement No. 333-27099
Agent:
Type of Offering: [Delayed Offering/Non-Delayed Offering]
Commissions to Agent:
<TABLE>
<CAPTION>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT(1)
- --------------- ----------------
<S> <C>
From 9 months to less than 1 year . . . . . . .
From 1 year to less than 18 months . . . . . . .
From 18 months to less than 2 years. . . . . . .
From 2 years to less than 3 years. . . . . . . .
From 3 years to less than 4 years. . . . . . . .
From 4 years to less than 5 years. . . . . . . .
From 5 years to less than 6 years. . . . . . . .
From 6 years to less than 7 years. . . . . . . .
From 7 years to less than 10 years . . . . . . .
From 10 years to less than 15 years. . . . . . .
From 15 years to less than 20 years. . . . . . .
From 20 years to 30 years. . . . . . . . . . . .
Greater than 30 years. . . . . . . . . . . . . .
</TABLE>
- ----------------------------
/1/ As agreed to by the Company and the applicable Agent at the time of sale.
<PAGE>
EXHIBIT A
PRICING TERMS
Principal Amount: $ _________
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[_] LIBOR Reuters Page:
[_] LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
[_] Weekly Average
[_] Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 4(g) of the Selling Agency
Agreement.
Legal Opinion pursuant to Section 4(h) of the Selling Agency Agreement.
Comfort Letter pursuant to Section 4(i) of the Selling Agency Agreement.
-20-
<PAGE>
ARCO CHEMICAL COMPANY AND CONSOLIDATED SUBSIDIARIES
Computation of the Ratio of Earnings to Fixed Charges
(Million of Dollars)
<TABLE>
<CAPTION>
Six Months
Years Ended December 31, Ended June 30, 1997
---------------------------------------- ---------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Pretax income from continuing operations $322 $311 $416 $756 $487 $ 126
Add:
Interest expense ................................ 91 105 85 89 86 42
Rental expense factor ........................... 26 20 22 25 27 14
---- ---- ---- ---- ---- ----
Earnings available for fixed charges .................... $439 $436 $523 $870 $600 $ 182
==== ==== ==== ==== ==== ====
Interest expense ........................................ $ 91 $105 $ 85 $ 89 $ 86 $ 42
Add capitalized interest ................................ 37 - 3 1 3 4
Rental expense factor ................................... 26 20 22 25 27 14
---- ---- ---- ---- ---- ----
Fixed charges ........................................... $154 $125 $110 $115 $116 $ 60
==== ==== ==== ==== ==== ====
Ratio of earnings to fixed charges ...................... 2.9 3.5 4.8 7.6 5.2 3.0
==== ==== ==== ==== ==== ====
</TABLE>
EXHIBIT 12
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
ARCO Chemical Company
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated February 12, 1997, on our audits of the
consolidated financial statements of ARCO Chemical Company and Subsidiaries as
of December 31, 1996 and 1995, and for each of the three years in the period
ended December 31, 1996, which report is included in ARCO Chemical Company's
Annual Report on Form 10-K for the year ended December 31, 1996. We also consent
to the reference to our Firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
August 1, 1997
Exhibit 23.2
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
ARCO CHEMICAL COMPANY
(Exact name of obligor as specified in its charter)
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3801 West Chester Pike
Newton Square, Pennsylvania 19073-2387
(Address of principal executive offices) (Zip code)
------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
EXHIBIT 25
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 23rd day of July, 1997.
THE BANK OF NEW YORK
By: /s/ Thomas E. Tabor
------------------------------
Name: Thomas E. Tabor
Title: Assistant Treasurer
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from deposit-
itory institutions:
Noninterest-bearing balances and
currency and coin...................... $ 8,249,820
Interest-bearing balances.............. 1,031,026
Securities:
Held-to-maturity securities............ 1,118,463
Available-for-sale securities.......... 3,005,838
Federal funds sold and Securities pur-
chased under agreements to resell........ 3,100,281
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .....................32,895,077
LESS: Allowance for loan and
lease losses ..................633,877
LESS: Allocated transfer risk
reserve...........................429
Loans and leases, net of unearned
income, allowance, and reserve 32,260,771
Assets held in trading accounts.......... 1,715,214
Premises and fixed assets (including
capitalized leases).................... 684,704
Other real estate owned.................. 21,738
Investments in unconsolidated
subsidiaries and associated
companies.............................. 195,761
Customers' liability to this bank on
acceptances outstanding................ 1,152,899
Intangible assets........................ 683,503
Other assets............................. 1,526,113
-----------
Total assets............................. $54,746,131
===========
LIABILITIES
Deposits:
In domestic offices.................... $25,614,961
Noninterest-bearing .........10,564,652
Interest-bearing ............15,050,309
In foreign offices, Edge and
Agreement subsidiaries, and IBFs....... 15,103,615
Noninterest-bearing ............560,944
Interest-bearing ...........14,542,671
Federal funds purchased and Securities
sold under agreements to repurchase. 2,093,286
Demand notes issued to the U.S.
Treasury............................... 239,354
Trading liabilities...................... 1,399,064
Other borrowed money:
With remaining maturity of one year
or less.............................. 2,075,092
With remaining maturity of more than
one year............................. 20,679
Bank's liability on acceptances exe-
cuted and outstanding.................. 1,160,012
Subordinated notes and debentures........ 1,014,400
Other liabilities........................ 1,840,245
-----------
Total liabilities........................ 50,560,708
-----------
EQUITY CAPITAL
Common stock............................. 942,284
Surplus.................................. 731,319
Undivided profits and capital
reserves............................... 2,544,303
Net unrealized holding gains
(losses) on available-for-sale
securities............................. ( 19,449)
Cumulative foreign currency transla-
tion adjustments....................... ( 13,034)
-----------
Total equity capital..................... 4,185,423
-----------
Total liabilities and equity
capital ............................... $54,746,131
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
)
Alan R. Griffith )
J. Carter Bacot )
Thomas A. Renyi ) Directors
)
- --------------------------------------------------------------------------------
