<PAGE>
As filed with the Securities and Exchange Commission on April 1, 1999
Registration No. 333-60429
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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LYONDELL CHEMICAL COMPANY
LYONDELL TRUST I
LYONDELL TRUST II
LYONDELL TRUST III
(Exact name of each registrant as specified in its charter)
Delaware 95-4160558
Delaware 76-0585767
Delaware 76-6470952
Delaware 76-6470953
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization)
Identification No.)
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(713) 652-7200
(Address, including zip code, and telephone number,
including area code, of each registrant's principal executive offices)
Robert J. Millstone
Vice President and General Counsel
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(713) 652-7200
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each registrant)
----------------
Copies to: Jeffrey Small
Stephen A. Massad Davis Polk & Wardwell
Baker & Botts, L.L.P. 450 Lexington Avenue
New York, NY 10017
One Shell Plaza
(212) 450-4000
910 Louisiana
Houston, Texas 77002
(713) 229-1234
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 to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
<PAGE>
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, 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 effective 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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Amount of
Securities to be Registered Aggregate Offering Price (1), (2), (3) Registration Fee (4)
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<S> <C> <C>
Senior Debt Securities and Subor-
dinated Debt Securities (collec-
tively, "Debt Securities") of
Lyondell Chemical Company........
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Preferred Stock, $.01 par value,
of Lyondell Chemical Company
("Preferred Stock").............
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Common Stock, $1.00 par value, of
Lyondell Chemical Company ("Com-
mon Stock")(5)..................
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Subordinated Debt Securities of
Lyondell Chemical Company for
issuance directly to Lyondell
Trust I, Lyondell Trust II and
Lyondell Trust III ("Debt Trust
Securities")....................
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Preferred Trust Securities of
Lyondell Trust I, Lyondell Trust
II and Lyondell Trust III ("Pre-
ferred Securities").............
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Guarantee of Preferred Securities
of Lyondell Trust I, Lyondell
Trust II and Lyondell Trust III
by Lyondell Chemical Company....
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TOTAL............................ $4,000,000,000.00 $1,180,000.00
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) and exclusive of accrued interest and dividends,
if any. In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement exceed $4,000,000,000 or the equivalent thereof in foreign
currencies, foreign currency units or composite currencies. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) Such indeterminate number or amount of Debt Securities, Debt Trust
Securities, Preferred Stock and Common Stock of Lyondell Chemical Company
and Preferred Securities of Lyondell Trust I, Lyondell Trust II and
Lyondell Trust III as may from time to time be issued at indeterminate
prices. Debt Trust Securities may be issued and sold to Lyondell Trust I,
Lyondell Trust II and Lyondell Trust III, in which event such Debt Trust
Securities may later be distributed to the holders of Preferred Securities
upon a dissolution of the applicable Lyondell Trust and the distribution
of assets thereof.
(3) Lyondell Chemical Company is also registering under this Registration
Statement all other obligations that it may have with respect to Preferred
Securities issued by Lyondell Trust I, Lyondell Trust II and Lyondell
Trust III. No separate consideration will be received for the guarantee of
the Preferred Securities or any other such obligation.
(4) The filing fee of $1,180,000 was paid in connection with the initial
filing of this Registration Statement on July 31, 1998.
(5) Includes the associated rights to purchase common stock.
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
EXPLANATORY NOTE
The Registration Statement contains two forms of prospectuses to be used in
connection with offerings of the following securities:
(1) Debt Securities (consisting of Senior Debt Securities and Subordinated
Debt Securities), Preferred Stock and Common Stock of Lyondell Chemical
Company.
(2) Preferred Securities of Lyondell Trust I, Lyondell Trust II or Lyondell
Trust III, Debt Trust Securities of Lyondell Chemical Company and the
Guarantee by Lyondell Chemical Company of the Preferred Securities issued
by Lyondell Trust I, Lyondell Trust II or Lyondell Trust III.
<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 APRIL 1, 1999
PROSPECTUS $4,000,000,000
[LOGO OF LYONDELL APPEARS HERE]
LYONDELL CHEMICAL COMPANY
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
Lyondell Chemical Company (the "Company" or "Lyondell") may from time to time
offer, together or separately, (i) shares of its common stock, par value $1.00
per share (the "Common Stock"), (ii) shares of its preferred stock, par value
$.01 per share (the "Preferred Stock"), (iii) unsecured senior debt securities
(the "Senior Debt Securities") and (iv) unsecured subordinated debt securities
(the "Subordinated Debt Securities"), in each case in one or more series and in
amounts, at prices and on terms to be determined at or prior to the time of
sale. The Senior Debt Securities and Subordinated Debt Securities are
collectively referred to herein as the "Debt Securities." The Debt Securities,
Common Stock and Preferred Stock are collectively referred to herein as the
"Securities."
SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE 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 Common Stock and Preferred Stock offered pursuant to this Prospectus may
be issued in one or more series or issuances in U.S. dollars or in one or more
foreign currencies, currency units or composite securities to be determined at
or prior to the time of any offering. The Debt Securities offered pursuant to
this Prospectus may consist of debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms to be
determined at or prior to the time of any such offering. As used herein, the
Debt Securities shall include securities denominated in United States dollars
or, at the option of the Company if so specified in an applicable Prospectus
Supplement, in any other currency, currency unit or composite currency, or in
amounts determined by reference to an index or formula. In addition, all or a
portion of the Debt Securities of a series may be issuable in temporary or
permanent global form. The Company's obligations under the Senior Debt
Securities will rank pari passu with all unsecured and unsubordinated debt (as
defined herein) of the Company. The Company's obligations under the
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of all Senior Debt (as defined herein). See "Description
of Debt Securities."
By separate prospectus, the form of which is included in the Registration
Statement of which this Prospectus forms a part, three Delaware statutory
business trusts (the "Lyondell Trusts"), each of which is a wholly owned
subsidiary of the Company, may from time to time severally offer preferred
securities guaranteed by the Company to the extent set forth therein, and the
Company may offer from time to time debt securities either directly or to a
Lyondell Trust. The aggregate public offering price of the securities to be
offered pursuant to this Prospectus and such other prospectus shall not exceed
$4,000,000,000 (or its equivalent in one or more foreign currencies, currency
units or composite currencies).
Specific terms of the Securities in respect of which this Prospectus is being
delivered (the "Offered Securities") will be set forth in a Prospectus
Supplement with respect to such Offered Securities, which Prospectus Supplement
will describe, without limitation and where applicable, the following: (i) in
the case of Common Stock, the specific designation, number of shares, purchase
price and the rights and privileges thereof, together with any qualifications
or restrictions thereon and any listing on a securities exchange; (ii) in the
case of Preferred Stock, the specific designation, number of shares, voting and
other powers, designations, preferences and relative participating, optional or
other special rights, and qualifications, limitations or restrictions
(including dividends, liquidation value, voting rights, terms for the
redemption, conversion or exchange thereof and any other specific terms of the
Preferred Stock) and any listing on a securities exchange; and (iii) in the
case of Debt Securities, the specific designation, aggregate principal amount,
ranking as senior debt or subordinated debt, authorized denomination, maturity,
rate (or method of determining the same) and times of payment of any interest,
any terms for optional or mandatory redemption, which may include redemption at
the option of holders upon the occurrence of certain events or payment of
additional amounts or any sinking fund provisions, any provisions with respect
to conversion or exchangeability, the initial public offering price, the net
proceeds to the Company, any listing on a securities exchange and any other
specific terms in connection with the offering. Unless otherwise indicated in
the Prospectus Supplement, the Company does not intend to list any of the
Securities other than the Common Stock on a national securities exchange.
The Offered Securities may be offered directly, through agents designated
from time to time, through dealers or through underwriters. Such agents or
underwriters may act alone or with other agents or underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters will be set forth in a
Prospectus Supplement. If an agent of the Company, or a dealer or underwriter
is involved in the offering of the Offered Securities, the agent's commission,
dealer's purchase price, underwriter's discount and net proceeds to the
Company, as the case may be, will be set forth in, or may be calculated from,
the Prospectus Supplement. Any underwriters, dealers or agents participating in
the offering may be deemed "underwriters" within the meaning of the Securities
Act of 1933.
The Common Stock is traded on the New York Stock Exchange under the symbol
"LYO." Any Common Stock offered will be traded, subject to notice of issuance,
on the New York Stock Exchange.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is , 1999.
<PAGE>
THE COMPANY
Lyondell Chemical Company ("Lyondell" or the "Company") is a vertically
integrated, global chemical company with leading market positions in all of
its major products and low cost operations. The Company's principal executive
offices are located at 1221 McKinney Street, Houston, Texas 77010 (telephone:
(713) 652-7200).
FORWARD-LOOKING STATEMENTS
Certain of the statements contained or incorporated by reference in this
Prospectus and the accompanying Prospectus Supplement are "forward-looking
statements" within the meaning of the federal securities laws. Although
Lyondell believes the expectations reflected in such forward-looking
statements are reasonable, they do involve certain inherent assumptions, risks
and uncertainties, and Lyondell can give no assurance that such expectations
will prove to have been correct. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of the risk factors set forth below and other factors set forth in or
incorporated by reference in this Prospectus and the accompanying Prospectus
Supplement. These factors include the cyclical and highly competitive nature
of the chemical and refining industries, uncertainties associated with the
United States and worldwide economies, current and potential governmental
regulatory actions in the United States and in other countries, substantial
chemical capacity additions resulting in oversupply and declining prices and
margins, raw material costs or supply arrangements, the Company's ability to
implement cost reductions, and operating interruptions (including leaks,
explosions, fires, mechanical failure, labor difficulties, unscheduled
downtime, transportation interruptions, spills and releases, and other
environmental risks). Many of such factors are beyond Lyondell's or its joint
ventures' ability to control or predict. Management cautions against putting
undue reliance on forward-looking statements or projecting any future results
based on such statements or present or prior earnings levels.
All subsequent written and oral forward-looking statements attributable to
the Company and persons acting on its behalf are qualified in their entirety
by the cautionary statements contained in this section and elsewhere in this
Prospectus.
RISK FACTORS
The following risk factors should be considered carefully with the
information provided elsewhere in this Prospectus and the accompanying
Prospectus Supplement and the documents incorporated by reference herein in
reaching a decision regarding an investment in the Securities offered hereby.
High Leverage and Related Matters
As of December 31, 1998, the Company had outstanding consolidated debt of
approximately $7.0 billion. In addition, the Company remains liable on $713
million of debt for which primary responsibility was assumed by Equistar
Chemicals, LP ("Equistar") in connection with the formation of Equistar. The
Company's consolidated ratio of earnings to fixed charges would have been 1.1
to 1 for 1998 on a pro forma basis if the acquisition of LCW and the related
debt incurrence had occurred on January 1, 1998.
The current amount of debt of the Company significantly exceeds the
Company's historical leverage and significantly increases its debt service
obligations. The Company's historical results and financial condition do not,
accordingly, reflect the potential constraints the increase in leverage may
impose on the Company. The
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Company's significant increase in leverage could have adverse effects on the
Company, including: (i) the leverage may make the Company more vulnerable to
industry cyclicality and may limit its ability to withstand competitive
pressures and adverse changes in environmental and other government
regulation, (ii) a substantial portion of cash flow from operations (as well
as cash generated from asset sales, if any, and financings) must be dedicated
to the payment of principal of and interest on debt and will not be available
for other uses such as capital expenditures or acquisitions, (iii) additional
financing is not available to the Company upon terms as favorable as those
previously available to the Company, which may limit the Company's business
growth, including its ability to effect potential acquisitions and (iv) the
Company may not be able to maintain its current dividend rate.
The Company's credit facilities and other indebtedness contain numerous
financial and other covenants that affect and restrict the Company's business.
The ability of the Company to meet its debt service obligations and capital
expenditure needs, maintain its dividend rate and comply with the covenants
and financial requirements in the credit facilities and other indebtedness
will largely depend on the future performance of the Company and availability
of additional financing to repay and refinance bank debt, both of which will
be subject to prevailing economic, market and competitive conditions and to
other factors beyond the Company's control. The breach of any of the covenants
or financial requirements in the credit facilities or other indebtedness could
result in a default thereunder, which would permit the lenders to declare the
loans immediately payable and to terminate future lending commitments.
As of December 31, 1998, Equistar, LYONDELL-CITGO Refining LP ("LCR") and
Lyondell Methanol Company, L.P. ("Lyondell Methanol") (collectively, the
"Joint Ventures") had, in the aggregate, outstanding debt of approximately
$2.9 billion and owners' equity of $4.6 billion. The ability of the Joint
Ventures to distribute cash to the Company is limited by their respective debt
service obligations. In addition, a default under certain Joint Venture debt
agreements would constitute a cross-default under the Company's credit
facilities. Certain debt instruments that were assumed by Equistar, but as to
which Lyondell remains an obligor as well, contain provisions that generally
provide that holders of such debt may, under certain limited circumstances,
require an obligor to repurchase the debt ("Put Rights"). The Put Rights would
be triggered by a specified decline in public ratings on such debt following
(i) certain events affecting control of Lyondell or Equistar or (ii) the
making by Lyondell or Equistar of certain dividends, distributions or
repurchases in excess of specified amounts. The debt subject to the Put Rights
consists of $150 million aggregate principal amount of notes maturing in June
1999, bearing interest at 10 percent, and $163 million aggregate principal
amount of medium-term notes maturing at various dates through 2005, with a
weighted average interest rate at December 31, 1998 of 9.87 percent. To date,
these Put Rights have not been triggered.
Industry Cyclicality and Overcapacity
The Company's historical operating results reflect the cyclical and volatile
nature of both the chemical and refining industries. The Company experienced
earnings declines in the fourth quarter of 1998 compared to the third quarter
of 1998 primarily because of lower prices in both the chemicals and refining
industries. Both industries are mature and capital intensive, and industry
margins are sensitive to supply and demand balances, which have historically
been cyclical. The chemical industry historically has experienced alternating
periods of tight supply, causing prices and profit margins to increase,
followed by periods of substantial capacity additions, resulting in oversupply
and declining prices and profit margins. Due to the commodity nature of most
of the Company's products, the Company is not necessarily able to protect its
market position by product differentiation or to pass on cost increases to its
customers. Accordingly, increases in raw material and other costs do not
necessarily correlate with changes in product prices, either in the direction
of the price change or in absolute magnitude. Moreover, a number of
participants in various segments of the chemical industry have announced plans
for expansion of plant capacity. There can be no assurance that future growth
in product demand will be sufficient to utilize this additional, or even
current, capacity. Excess industry capacity, to the extent it occurs,
depresses the Company's volumes and margins. As a result, the Company's
earnings are subject to significant fluctuation.
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<PAGE>
External factors beyond the Company's control, such as general economic
conditions, competitor action, international events and circumstances and
governmental regulation in the United States and abroad, can cause volatility
in feedstock prices, as well as fluctuations in demand for the Company's
products, product prices, volumes and margins, and can magnify the impact of
economic cycles on the Company's business. A number of the Company's products
are highly dependent on durable goods markets, such as housing and automotive,
that are particularly cyclical.
Intense Competition
The chemical industry is highly competitive. Many of the Company's
competitors are larger and have greater financial resources than the Company.
Among Lyondell's chemical competitors are some of the world's largest chemical
companies, including The Dow Chemical Company, Shell Chemical, BASF AG, Bayer
AG and Union Carbide Corporation. In the past several years, there have been a
number of mergers, acquisitions and spin-offs in the chemical industry. This
restructuring activity may result in fewer but more competitive producers with
greater financial resources than the Company.
Competition within the chemical industry is affected by a variety of
factors, including product price, reliability of product supply, technical
support, customer service, product quality and availability to the market of
potential substitute materials. Changes in the competitive environment,
including (i) the emergence of new competitors, (ii) the rate of capacity
additions by competitors, (iii) the intensification of price competition in
the Company's markets, (iv) the introduction of new or substitute products by
competitors, (v) technological innovations by competitors and (vi) new
environmental laws and regulatory requirements, could have a material adverse
effect on the business and operations of the Company.
Potential Difficulties in Integrating Recently Acquired and Combined
Operations
The Company acquired Lyondell Chemical Worldwide, Inc. (formerly ARCO
Chemical Company) ("LCW") in July 1998. The Company combined its
petrochemicals and polymers business with that of Millennium Chemicals Inc. to
form Equistar Chemicals, LP in December 1997. Equistar was expanded by the
addition of certain businesses previously held by Occidental Petroleum
Corporation in May 1998. The process of integrating the operations of LCW with
the Company has only recently begun, and the process of integrating the
operations of Equistar is not complete.
As is the case with any integration of major businesses that previously
operated independently, the integration processes for LCW and for Equistar
will require the dedication of significant management and operational
resources. The difficulties of combining operations may be exacerbated by the
necessity of coordinating geographically separate organizations, integrating
personnel with disparate business backgrounds and combining different
transaction processing and financial reporting systems and processes and
corporate cultures. The process of integrating operations could cause an
interruption of, or loss of momentum in, the activities of the combined
enterprise's business. In addition, the Company may suffer a loss of key
employees, customers or suppliers, loss of revenues, increases in costs or
other difficulties, some of which may not have been foreseen. There can be no
assurance that the Company will be able to realize the operating efficiencies,
cost savings and other benefits that are sought from such transactions.
Difficulties encountered in the integration processes could have a material
adverse effect on the business and operations of the Company.
Acquisitions, Dispositions and Joint Ventures
Each of Lyondell and Equistar actively seeks opportunities to maximize
efficiency or value through various transactions. These transactions may
include purchases or sales of assets or contractual arrangements or joint
ventures that are intended to result in the realization of synergies, the
creation of efficiencies or the generation of cash to reduce indebtedness. To
the extent permitted under Lyondell's and Equistar's credit facilities and
other indebtedness, some of these transactions may be financed by additional
borrowings by Lyondell or Equistar or by the issuance of equity securities.
These transactions may often affect the results of operations of Lyondell or
Equistar in the short term because of the costs associated with such
transactions, but they are expected to yield longer-term benefits if the
expected efficiencies and synergies of the transactions are realized. Factors
such as those described in "--Potential Difficulties in Integrating Recently
Acquired and Combined Operations" may make it difficult or impossible to
realize such expected efficiencies and synergies.
4
<PAGE>
Shared Control of Joint Ventures
The Company conducts a substantial amount of its operations through its
Joint Ventures. The Company shares control of these Joint Ventures with
unaffiliated third parties.
The Company's forecasts and plans with respect to these Joint Ventures
assume that its joint venture partners will observe their obligations with
respect to the Joint Ventures. In the event that any of the Company's joint
venture partners do not observe their commitments, it is possible that the
affected Joint Venture would not be able to operate in accordance with its
business plans or that the Company would be required to increase its level of
commitment in order to give effect to such plans.
As with any such joint venture arrangements, differences in views among the
joint venture participants may result in delayed decisions or in failures to
agree on major matters, potentially adversely affecting the business and
operations of the Joint Ventures and in turn the business and operations of
the Company.
Joint Venture Structure
The Company conducts a substantial amount of its operations through its
Joint Ventures. The Company's ability to meet its debt service obligations is
dependent, in part, upon the receipt of distributions from its Joint Ventures.
Subject to the provisions of the applicable debt agreements, future borrowings
by the Company's Joint Ventures may contain restrictions or prohibitions on
the payment of distributions by such Joint Ventures to the Company. Under
applicable state law, the Company's Joint Ventures may be limited in amounts
that they are permitted to pay as distributions on their equity interests.
Importance of Crude Oil Supply Agreement and Related Risks
Substantially all of the crude oil used by LCR as a feedstock for its
refinery is purchased under the Crude Supply Agreement with PDVSA Petroleo y
Gas S.A. ("PDVSA Oil"), which, like CITGO Petroleum Corporation ("CITGO"), is
a subsidiary of Petroleos de Venezuela, S.A., the Venezuelan national oil
company. The Crude Supply Agreement was entered into in 1993 and the Company
experienced the full effects of the Crude Supply Agreement beginning in 1997.
The Crude Supply Agreement incorporates formula prices to be paid by LCR for
the crude oil supplied based on the market value of a slate of refined
products deemed to be produced from each particular crude oil or feedstock,
less (i) certain deemed refining costs adjustable for inflation and energy
costs, (ii) certain actual costs, including crude oil transportation costs,
import duties and taxes and (iii) a deemed margin, which varies according to
the grade of crude oil or other feedstock delivered. Deemed margins and deemed
costs are adjusted periodically based on inflation rates for specific deemed
cost components. Adjustments to margins track, but are less than, inflation
rates. Because deemed operating costs and the slate of refined products deemed
to be produced from a given barrel of crude oil or other feedstock do not
necessarily reflect the actual costs and yields in any period and also because
the market value of the refined products used in the pricing formula does not
necessarily reflect the actual price received for the refined products, the
actual refining margin earned by LCR varies depending on, among other things,
the efficiency with which LCR conducts its operations from time to time.
Although LCR believes that the Crude Supply Agreement reduces the volatility
of its earnings and cash flows, the Crude Supply Agreement also limits LCR's
ability to enjoy higher margins during periods when the market price of crude
oil is low relative to the then current market prices for refined products. In
addition, if the actual yields, costs or volumes of the LCR refinery differ
substantially from those contemplated by the Crude Supply Agreement, the
benefits of this agreement to LCR could be substantially diminished, and could
result in lower earnings and cash flow for LCR. Furthermore, there may be
periods during which LCR's costs for crude oil under the Crude Supply
Agreement may be higher than might otherwise be available to LCR from other
sources.
There are risks associated with enforcing the provisions of contracts with
companies such as PDVSA Oil that are non-United States affiliates of a
sovereign nation. It is impossible to predict how governmental policies may
change under the current or any subsequent Venezuelan government. In addition,
there are risks associated with enforcing judgments of United States courts
against entities whose assets are located outside of the United
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<PAGE>
States and whose management does not reside in the United States. In addition,
all of the crude oil supplied by PDVSA Oil under the Crude Supply Agreement is
produced in Venezuela, a country that has experienced economic difficulties
and attendant social and political unrest in recent years. If the Crude Supply
Agreement is modified or terminated or this source of crude oil is otherwise
interrupted due to production difficulties, OPEC-mandated supply cuts,
political or economic events in Venezuela or other factors, LCR could
experience significantly greater volatility in its earnings and cash flows.
The parties each have the right to transfer their interests in LCR to
unaffiliated third parties in certain circumstances, subject to reciprocal
rights of first refusal. In the event that CITGO were to transfer its interest
in LCR to an unaffiliated third party, PDVSA Oil would have an option to
terminate the Crude Supply Agreement. Depending on then current market
conditions, any breach or termination of the Crude Supply Agreement could
adversely affect LCR, since LCR would have to purchase all of its crude oil
feedstocks in the merchant market, which could subject LCR to significant
price fluctuations. There can be no assurance that alternative crude oil
supplies providing similar margins would be available for purchase by LCR.
In late April 1998, LCR received notification from PDVSA of reduced delivery
of crude oil related to announced OPEC production cuts. In August 1998, LCR
began receiving reduced allocations of crude oil from PDVSA. Following
additional cutbacks announced by OPEC in late March 1999, LCR anticipates
further reductions in its allocation of crude oil under the Crude Supply
Agreement. Historically Venezuela has complied with OPEC-mandated supply cuts
by reducing crude supply. Decreased allocations of PDVSA crude oil tend to
reduce LCR's pretax income and, accordingly, Lyondell's pro rata share of
LCR's income. OPEC-mandated supply cuts are a force majeure event under the
Crude Supply Agreement for which the Company has no contractual remedy. While
to date LCR has been able to obtain alternate supplies of crude oil, the
margin for these crude oils has been less than for the extra heavy Venezuelan
crude oil purchased under the Crude Supply Agreement. There can be no
assurance that PDVSA will not announce further cutbacks in crude oil
production thereby reducing LCR's allocation of extra heavy crude oil or that
LCR will be able to continue to obtain adequate alternative supplies of crude
oil or at what cost Lyondell will be able to obtain such substitute crude oil.
Operating Hazards
The occurrence of material operating problems, including, but not limited
to, the events described below, may have a material adverse effect on the
productivity and profitability of a particular manufacturing facility, or on
the Company as a whole, during and after the period of such operational
difficulties. The Company's revenues are dependent on the continued operation
of its various production facilities (including the ability to complete
construction projects on schedule). The Company's operations are subject to
the usual hazards associated with chemical manufacturing and refining and the
related storage and transportation of feedstocks, products and wastes,
including pipeline leaks and ruptures, explosions, fires, inclement weather
and natural disasters, mechanical failure, unscheduled downtime, labor
difficulties, transportation interruptions, remediation complications,
chemical spills, discharges or releases of toxic or hazardous substances or
gases, storage tank leaks and other environmental risks. These hazards can
cause personal injury and loss of life, severe damage to or destruction of
property and equipment and environmental damage, and may result in suspension
of operations and the imposition of civil or criminal penalties. Furthermore,
the Company is also subject to present and future claims with respect to
workplace exposure, workers' compensation and other matters. The Company
maintains property, business interruption and casualty insurance which it
believes is in accordance with customary industry practices, but it is not
fully insured against all potential hazards incident to its business.
Environmental Considerations
The Company's operations and ownership and use of real property are subject
to extensive environmental, health and safety laws and regulations promulgated
by domestic and foreign governments at both the national and local level. Many
of these laws and regulations impose requirements relating to the clean-up of
contamination, impose liability in the event of damage of natural resources
and provide for substantial fines and
6
<PAGE>
potential criminal sanctions for violations. The nature of the chemical and
refining industries exposes the Company to risks of liability under such laws
and regulations due to the production, refining, storage, transportation and
sale of materials that can cause contamination or personal injury if released
into the environment. In addition, individuals could seek damages for alleged
personal injury or property damage due to exposure to chemicals at the
Company's facilities or to chemicals otherwise owned or controlled by the
Company. Environmental laws may have a significant effect on the nature and
scope of cleanup of contamination at current and former operating facilities,
the costs of transportation and storage of feedstocks and finished products
and the costs of the storage and disposal of wastes. Also, "Superfund"
statutes may impose joint and several liability for the costs of remedial
investigations and actions on the entities that generated waste, arranged for
disposal of the wastes, transported to or selected the disposal sites and the
past and present owners and operators of such sites. All such responsible
parties (or any one of them, including the Company) may be required to bear
all of such costs regardless of fault, legality of the original disposal or
ownership of the disposal site.
The Company expects that the nature of its businesses will continue to
subject the Company to increasingly stringent environmental and health and
safety laws and regulations. It is difficult to predict the future
interpretation and development of such laws and regulations or their impact on
future earnings and operations, but the Company anticipates that these
standards will continue to require increased capital expenditures and
operating costs. In particular, the ultimate effect of the Clean Air Act on
the Company's operations will depend on how the law is interpreted and
implemented pursuant to regulations that are currently being developed and on
additional factors such as the evolution of environmental control
technologies.
The Company's policy is to accrue costs relating to environmental matters
when it is probable that such costs will be required and the related costs can
be reasonably estimated. Estimated costs for future environmental compliance
and remediation or other costs are necessarily imprecise due to such factors
as the continuing evolution of environmental laws and regulatory requirements,
the availability and application of technology, the identification of
presently unknown remediation sites and the allocation of costs among the
responsible parties under applicable statutes. On a quarterly basis, the
Company evaluates the status of all significant existing or potential
environmental issues, develops or revises estimates of costs to satisfy known
remediation requirements (including those relating to "Superfund"
requirements) and adjusts its accruals accordingly; as of December 31, 1998,
the reserve was $48 million. Based upon information presently available, the
Company does not expect that such future costs will have a material adverse
effect on its competitive or financial position or its ongoing results of
operations. However, it is not possible to predict accurately the amount or
timing of costs of any future environmental remediation requirements. Such
costs could be material to future quarterly or annual results of operations.
MTBE
Pending or future legislative initiatives or litigation may materially
adversely affect the Company's MTBE sales or subject the Company to products
liability. The presence of MTBE in some water supplies in California and other
states due to gasoline leaking from underground storage tanks and in surface
water from recreational water craft has led to public concern that MTBE may
contaminate drinking water supplies, and thereby result in a possible health
risk. The Governor of California has announced an intention to eliminate MTBE
from gasoline sold in California by December 31, 2002. There have been claims
that MTBE travels more rapidly through soil, and is more soluble in water,
than most other gasoline components, and is more difficult and more costly to
remediate. Heightened public awareness about MTBE has resulted in certain
state and federal legislative initiatives that have sought either to rescind
the oxygenate requirement for reformulated gasoline sold in California and
other states or restrict the use of MTBE. There is ongoing review of this
issue and the ultimate resolution of the appropriateness of using MTBE could
result in a significant reduction in the Company's MTBE sales.
In addition, the Company has a take-or-pay MTBE sales contract with Atlantic
Richfield Company ("ARCO"), which contributes significant pre-tax margin. If
such legislative initiatives were enacted, ARCO has
7
<PAGE>
indicated that it might attempt to invoke a force majeure provision in the
ARCO contract in order to reduce the quantities of MTBE it purchases under, or
to terminate, the contract. The Company would vigorously dispute such action.
The contract has an initial term expiring December 31, 2002 and provides for
formula-based prices that are currently significantly above spot market prices
for MTBE. A significant reduction in the Company's sales under the ARCO
contract could have a negative impact on the Company's results of operations.
Foreign Operations, Country Risks and Exchange Rate Fluctuations
International operations and exports to foreign markets are subject to a
number of risks, including currency exchange rate fluctuations, trade
barriers, exchange controls, national and regional labor strikes, political
risks and risks of increases in duties and taxes, as well as changes in laws
and policies governing operations of foreign-based companies. Although the
Company uses various types of foreign currency forward, option and swap
contracts to reduce foreign exchange exposures with respect to revenues,
capital commitments and other expenses denominated in foreign currencies,
there can be no assurance that such hedging techniques will protect the
Company's reported results against such risks or that the Company will not
incur material losses on such contracts. In addition, earnings of foreign
subsidiaries and intercompany payments may be subject to foreign income tax
rules that may reduce cash flow available to meet required debt service and
other obligations of the Company.
A number of Asian and Latin American economies have experienced economic
difficulties in recent periods. Prolonged economic difficulties in the Asian
and Latin American markets could significantly impact worldwide demand and
thereby place downward pressure on margins, which, if material, could in turn
have an adverse effect on the business and operations of the Company.
Significant Fluctuations in Quarterly Results
The Company's quarterly results will vary significantly depending on various
factors, most of which are beyond the Company's control, including changes in
product prices, product demand, raw material costs or supply arrangements;
regional business activities, including a lower level of economic activity in
Europe during the summer; adverse developments in foreign markets;
fluctuations in shipments to customers; foreign exchange fluctuations;
unanticipated expenses; changes in interest rates; and the scheduling of plant
turnarounds.
Change of Control Related Provisions
Under the Company's credit facilities, a change in control of the Company is
an event of default, which would permit the lenders to declare the loans
thereunder immediately payable and to terminate future lending commitments.
Under the credit facilities, with certain exceptions, a change in control is
deemed to occur if any person or group acquires 20% or more of the Company's
Common Stock or there has generally been a change in a majority of the
Company's Board of Directors. The Company has adopted a stockholders' rights
plan. In addition, the Delaware General Corporation Law contains provisions
that impose restrictions on business combinations with interested parties and
the Company's By-Laws contain certain advance notice provisions. The
provisions of the credit facilities, the Delaware General Corporation Law, the
Company's stockholders' rights plan and the Company's By-Laws (as well as the
Put Rights described under "--High Leverage and Related Matters" above) may
have the effect of delaying, deferring or preventing a change in control of
the Company, which could prevent the Company's stockholders from receiving a
takeover premium for their Common Stock.
8
<PAGE>
USE OF PROCEEDS
Except as otherwise described in any Prospectus Supplement, the net proceeds
from the sale of the Offered Securities will be used for general corporate
purposes, which may include, but are not limited to, repayment or refinancing
of indebtedness, working capital, capital expenditures, acquisitions and
repurchases or redemptions of debt or equity securities of Lyondell, and may
initially be invested in short-term securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)................. 1.2x 4.6x 2.2x 6.8x 4.8x
Supplemental pro forma ratio of earnings to fixed
charges(b)........................................... 1.1x
</TABLE>
- --------
(a) The ratio of earnings to fixed charges has been calculated including
amounts for Lyondell and its proportionate share of amounts for Equistar
(57 percent through May 15, 1998 and 41 percent thereafter), LCR (58.75
percent for the year ended December 31, 1998, 86 percent for the first
quarter of 1997 and 58.49 percent for the remainder of 1997) and Lyondell
Methanol (75 percent for the year ended December 31, 1998), for the
periods in which Lyondell accounted for its respective investment in each
such Joint Venture using the equity method of accounting. Lyondell remains
liable on approximately $713 million of debt for which primary
responsibility was assumed by Equistar in connection with its formation.
Fixed charges include interest expense plus capitalized interest and the
portion of rental expense that represents an interest factor.
(b) The supplemental pro forma ratio of earnings to fixed charges gives effect
to the acquisition of LCW and the debt issued by the Company pursuant to
the related credit facilities as if such transactions had occurred as of
January 1, 1998.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company currently consists of
250,000,000 shares of Common Stock, par value $1.00 per share, and 80,000,000
shares of preferred stock, par value $.01 per share. The following summary
description of the capital stock of the Company is qualified in its entirety
by reference to the Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), and the Amended and Restated By-Laws of the Company, as
amended (the "By-Laws"), copies of which are filed as exhibits to the
Company's Annual Report on Form 10-K.
Common Stock
The Company is currently authorized to issue 250,000,000 shares of Common
Stock, of which 77,021,797 shares of Common Stock were outstanding at December
31, 1998.
Holders of Common Stock ("Stockholders") are entitled (i) to receive such
dividends as may from time to time be declared by the Board of Directors of
the Company; (ii) to one vote per share on all matters on which the
Stockholders are entitled to vote; (iii) to act by written consent in lieu of
voting at a meeting of Stockholders; and (iv) to share ratably in all assets
of the Company available for distribution to the Stockholders, in the event of
liquidation, dissolution or winding up of the Company. The holders of a
majority of the shares of Common Stock represented at a meeting can elect all
of the directors.
Shares of Common Stock are not liable to further calls or assessments by the
Company for any liabilities of the Company that may be imposed on its
Stockholders under the laws of the State of Delaware, the state of
incorporation of the Company. There are no preemptive rights for the Common
Stock in the Certificate of Incorporation.
9
<PAGE>
The Transfer Agent, Registrar and Dividend Disbursing Agent for the Common
Stock is The Bank of New York.
Preferred Stock
The Company is currently authorized to issue up to 80,000,000 shares of
Preferred Stock, $.01 par value per share. The Board of Directors is able to
specify the precise characteristics of the Preferred Stock to be issued, in
light of current market conditions and the nature of specific transactions,
and is not required to solicit further authorization from Stockholders for any
specific issue of Preferred Stock. The Board of Directors has no present
intention to issue any series of Preferred Stock.
The Board of Directors has adopted a policy providing that no future
issuance of Preferred Stock will be effected without Stockholder approval
unless the Board of Directors (whose decision shall be conclusive) determines
in good faith (i) that such issuance is primarily for the purpose of
facilitating a financing, an acquisition or another proper corporate objective
or transaction, and (ii) that any anti-takeover effects of such issuance are
not the Company's primary purpose for effecting such issuance. The Board of
Directors will not amend or revoke this policy without giving written notice
to the holders of all outstanding shares of the Company's stock; however, no
such amendment or revocation will be effective, without Stockholder approval,
to permit a subsequent issuance of Preferred Stock for the primary purpose of
obstructing a takeover of the Company by any person who has, prior to such
written notice to stockholders, notified the Board of Directors of such
person's desire to pursue a takeover of the Company.
Rights to Purchase Common Stock
On December 8, 1995, the Board of Directors of Lyondell declared a dividend
of one right ("Right") for each outstanding share of the Company's Common
Stock, par value $1.00 per share, to Stockholders of record at the close of
business on December 20, 1995. Each Right entitles the registered holder to
purchase from the Company one share of Common Stock at a purchase price of $80
per share of Common Stock, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated
as of December 8, 1995 as it may from time to time be supplemented or amended
(the "Rights Agreement") between the Company and The Bank of New York, as
Rights Agent.
Initially, the Rights will be attached to all certificates representing
outstanding shares of Common Stock, and no separate certificates for the
Rights ("Rights Certificates") will be distributed. The Rights will separate
from the Common Stock and a "Distribution Date" will occur, with certain
exceptions, upon the earlier of (i) ten days following a public announcement
of the existence of an "Acquiring Person" (the date of the announcement being
the "Stock Acquisition Date"), or (ii) ten business days following the
commencement of a tender offer or exchange offer that would result in a person
becoming an Acquiring Person.
An "Acquiring Person" is any person or group of affiliated or associated
persons that has acquired or obtained the right to acquire beneficial
ownership of 15 percent or more of the outstanding shares of Common Stock,
except that ARCO will not be or become an Acquiring Person unless and until
such time as ARCO or any person affiliated or associated with ARCO acquires or
becomes the beneficial owner of (or ARCO becomes affiliated or associated with
any person who, collectively with ARCO, is the beneficial owner of) more than
the lesser of (i) 1,000,000 shares of Common Stock in addition to those ARCO
beneficially owned as of December 8, 1995 (or in addition to any lesser number
of shares ARCO beneficially owns from time to time thereafter) or (ii) one
share less than 50 percent of the shares of Common Stock outstanding at any
time.
In certain circumstances prior to the time a person has become an Acquiring
Person, the Distribution Date may be deferred by the Board of Directors.
Certain inadvertent acquisitions will not result in a person's becoming an
Acquiring Person if the person promptly divests itself of sufficient Common
Stock. Until the Distribution Date, (a) the Rights will be evidenced by the
Common Stock certificates (together with this Summary of Rights or bearing the
notation referred to below) and will be transferred with and only with such
Common Stock
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certificates, (b) new Common Stock certificates issued after December 20, 1995
will contain a notation incorporating the Rights Agreement by reference and
(c) the surrender for transfer of any certificate for Common Stock (with or
without a copy of this Summary of Rights) will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on December 8, 2005, unless earlier redeemed or
exchanged by the Company as described below.
In the event (a "Flip-In Event") that a person becomes an Acquiring Person
(except pursuant to a tender or exchange offer for all outstanding shares of
Common Stock at a price and on terms that a majority of the independent
directors of the Company determines to be fair to and otherwise in the best
interests of the Company and its stockholders (a "Permitted Offer")), each
holder of a Right will thereafter have the right to receive, upon exercise of
such Right, a number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a Current Market
Price (as defined in the Rights Agreement) equal to two times the exercise
price of the Right. Notwithstanding the foregoing, following the occurrence of
any Flip-In Event, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by or transferred
to such Acquiring Person (or by certain related parties) will be null and void
in the circumstances set forth in the Rights Agreement.
In the event (a "Flip-Over Event") that, at any time from and after the time
an Acquiring Person becomes such, (i) the Company is acquired in a merger or
other business combination transaction (other than certain mergers that follow
a Permitted Offer), or (ii) 50 percent or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
owned by such Acquiring Person or certain related parties) shall thereafter
have the right to receive, upon exercise, a number of shares of common stock
of the acquiring company having a Current Market Price equal to two times the
exercise price of the Right.
At any time until the time a person becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.0005 per
Right, payable, at the option of the Company, in cash, shares of Common Stock
or such other consideration as the Board of Directors may determine. At any
time after the occurrence of a Flip-In Event and prior to the occurrence of a
Flip-Over Event or a person becoming the beneficial owner of 50 percent or
more of the shares of Common Stock then outstanding, the Company may exchange
the Rights (other than Rights owned by an Acquiring Person or an affiliate or
an associate of an Acquiring Person, which will have become void), in whole or
in part, at an exchange ratio of one share of Common Stock, and/or other
equity securities deemed to have the same value as one share of Common Stock,
per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights should not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for the common stock of the acquiring company as set forth above or are
exchanged as provided in the preceding paragraph.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) if holders of the Common Stock are granted certain rights
or warrants to subscribe for Common Stock or securities convertible into
Common Stock at less than the current market price of the Common Stock or
(iii) upon the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
Other than the redemption price, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company as long as
the Rights are redeemable. Thereafter, the provisions of the Rights Agreement
(other than the Redemption Price) may be amended by the Board of Directors in
order to cure any
11
<PAGE>
ambiguity, defect or inconsistency, to make changes that do not materially
adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to lengthen the time
period governing redemption or amendment shall be made at such time as the
Rights are not redeemable.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by its Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors at a time when the Rights are redeemable.
A copy of the Rights Agreement is filed as an exhibit to the Company's
Annual Report on Form 10-K. This summary description of the Rights is
qualified in its entirety by reference thereto.
Voting Rights
Each holder of shares of Common Stock, except where otherwise provided by
law or the Certificate of Incorporation, is entitled to one vote, in person or
by proxy, for each share of Common Stock standing in his, her or its name on
the books of the Company. The Common Stock does not have cumulative voting
rights. Holders of the Preferred Stock, if any, will only be entitled to vote
upon the election of directors or upon any questions affecting the Company if
and to the extent that the holders of any series of Preferred Stock are
granted voting rights fixed for such series by the Board of Directors in the
resolution creating such series.
Delaware Section 203
The Company is a Delaware corporation and is subject to Section 203 of the
General Corporation Law of Delaware ("Delaware Law"). In general, Section 203
prevents an "interested stockholder" (defined generally as a person owning 15%
or more of the Company's outstanding voting stock) from engaging in a
"business combination" (as defined in Section 203) with the Company for three
years following the date that person becomes an interested stockholder unless
(a) before that person became an interested stockholder, the Company's Board
of Directors approved the transaction in which the interested stockholder
became an interested stockholder or approved the business combination, (b)
upon completion of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested stockholder
owns at least 85% of the Company's voting stock outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the Company and by employee stock plans that do not provide employees with
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer) or (c) following the
transaction in which that person became an interested stockholder, the
business combination is approved by the Company's Board of Directors and
authorized at a meeting of stockholders by the affirmative vote of the holders
of at least two-thirds of the outstanding Company voting stock not owned by
the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement
or notification of one of certain extraordinary transactions involving the
Company and a person who was not an interested stockholder during the previous
three years or who became an interested stockholder with the approval of a
majority of the Company's directors, if that extraordinary transaction is
approved or not opposed by a majority of the directors who were directors
before any person became an interested stockholder in the previous three years
or who were recommended for election or elected to succeed such directors by a
majority of such directors then in office.
Limitation on Directors' Liability
Delaware Law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The Certificate of
Incorporation limits the liability of directors of the Company to the Company
or its stockholders to the fullest
12
<PAGE>
extent permitted by Delaware Law. Specifically, directors of the Company will
not be personally liable for monetary damages for breach of a director's
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
The inclusion of this provision in the Certificate of Incorporation may have
the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter stockholders or management from bringing
a lawsuit against directors for breach of their duty of care, even though such
an action, if successful, might otherwise have benefited the Company and its
stockholders.
Provisions of the Company's By-Laws
Certain provisions of the By-Laws establish time periods during which
appropriate stockholder proposals must be delivered to the Company for
consideration at special and annual meetings called by the Company. The By-
Laws provide, among other things, that stockholders making nominations for the
Board of Directors at, or bringing other business before, an annual or special
meeting of stockholders must provide timely written notice to the Company
thereof (timely notice being required to be no later than 90 days in advance
of such meeting; provided, however, that in the event that the date of the
meeting was not publicly announced by a mailing to stockholders, in a press
release reported by the Dow Jones News Services, Associated Press or
comparable national news service or in a filing with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities
Exchange Act of 1934 more than 90 days prior to the meeting, such notice, to
be timely, must be delivered to the Board of Directors not later than the
close of business on the tenth day following the day on which the date of the
meeting was first so publicly announced).
Limitation on Changes in Control
The Rights and Rights Agreement, certain provisions of the Company's By-Laws
and the provisions of Section 203 of Delaware Law could have the effect of
delaying, deferring or preventing a change in control of the Company. This
could be the case, notwithstanding that a majority of the stockholders might
benefit from such a change in control or offer.
MARKET FOR COMMON STOCK AND COMMON STOCK DIVIDENDS
The Common Stock is listed on the New York Stock Exchange under the symbol
"LYO." The reported high and low sale prices of the Common Stock on the New
York Stock Exchange (New York Stock Exchange Composite Tape) for each quarter
from January 1, 1997 through March 30, 1999, inclusive, were as set forth
below.
<TABLE>
<CAPTION>
Period High Low
------ ---- ---
<S> <C> <C>
1997:
First Quarter....................................... 25 1/2 21 5/8
Second Quarter...................................... 23 5/8 18 3/8
Third Quarter....................................... 27 3/8 21 7/8
Fourth Quarter...................................... 27 1/4 23 15/16
1998:
First Quarter....................................... 36 1/8 23 1/4
Second Quarter...................................... 38 1/8 26 1/2
Third Quarter....................................... 30 15/16 19 1/2
Fourth Quarter...................................... 22 7/16 15
1999:
First Quarter (through March 30, 1999).............. 18 1/8 13 1/8
</TABLE>
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<PAGE>
During the last thirteen quarters, Lyondell has declared $.225 per share
quarterly cash dividends (which were paid in the subsequent quarter). The
declaration and payment of dividends is at the discretion of the Board of
Directors. The future declaration and payment of dividends and the amount
thereof will be dependent upon the Company's results of operations, financial
condition, cash position and requirements, investment opportunities, future
prospects and other factors deemed relevant by the Board of Directors. Subject
to these considerations and to the legal considerations discussed in the
following paragraph, the Company currently intends to distribute to its
Stockholders cash dividends on its Common Stock at a quarterly rate of $.225
per share. During 1998, the Company paid $70 million in dividends. During the
first quarter of 1999, the Company paid $17 million in dividends.
Certain debt instruments which were assumed by Equistar, but as to which
Lyondell remains an obligor as well, contain the Put Rights provisions. Among
other things, the Put Rights may be triggered by the making by either of
Lyondell or Equistar of certain unearned distributions to stockholders or
partners, respectively, other than regular dividends, that are followed by a
specified decline in public ratings on such debt. Regular dividends are those
quarterly cash dividends determined in good faith by the Board of Directors
(whose determination is conclusive) to be appropriate in light of the
Company's results of operations and capable of being sustained. Lyondell's
credit facilities also could limit the Company's ability to pay dividends
under certain circumstances.
The operation of certain of the Company's employee benefit plans may result
in the issuance of Common Stock upon the exercise of options granted to
employees of the Company, including its officers. Although the terms of these
plans provide that additional shares may be issued to satisfy the Company's
obligations under the options, the Company generally intends to cause Common
Stock to be repurchased in the market in order to satisfy these obligations.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate (the "Offered Debt Securities"). The particular terms of the
Offered Debt Securities and the extent to which such general provisions may
apply will be described in a Prospectus Supplement relating to such Offered
Debt Securities.
The Debt Securities will be general unsecured obligations of the Company and
will constitute either senior debt securities or subordinated debt securities.
In the case of Debt Securities that will be senior debt securities ("Senior
Debt Securities"), such Debt Securities will be issued under an Indenture (the
"Senior Indenture") between the Company and a trustee under the Senior
Indenture (the "Senior Trustee"), and will rank pari passu with all other
unsecured and unsubordinated debt of the Company. In the case of Debt
Securities that will be subordinated debt securities ("Subordinated Debt
Securities"), such Debt Securities will be issued under an Indenture (the
"Subordinated Indenture") between the Company and a trustee under the
Subordinated Indenture (the "Subordinated Trustee"), and will rank junior to
all Senior Indebtedness (as defined below) of the Company (including any
Senior Debt Securities) that may be outstanding from time to time. The Senior
Indenture and the Subordinated Indenture are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures," and the
Senior Trustee and the Subordinated Trustee are sometimes hereinafter referred
to individually as a "Trustee" and collectively as the "Trustees."
The following description does not purport to be complete. It is qualified
in its entirety by reference to the text of the Form of Senior Indenture and
the Form of Subordinated Indenture, copies of which are filed as exhibits to
this Registration Statement and may be inspected in the same manner as set
forth under "Available Information." Certain defined terms in the Indentures
are capitalized herein.
Provisions Applicable to Both Senior and Subordinated Debt Securities
General
The Indentures do not limit the aggregate principal amount of Debt
Securities that can be issued thereunder and provide that Debt Securities may
be issued from time to time thereunder in one or more series, each in an
aggregate principal amount authorized by the Company prior to issuance. The
Indentures do not limit the amount of other unsecured indebtedness or
securities that may be issued by the Company.
Unless otherwise indicated in a Prospectus Supplement, the Debt Securities
will not benefit from any covenant or other provision that would afford
Holders of such Debt Securities special protection in the event of a highly
leveraged transaction involving the Company or that would give holders of the
Debt Securities the right to require the Company to repurchase their
securities in the event of a decline in the credit rating of the Company's
debt securities resulting from a takeover, recapitalization or similar
restructuring or otherwise.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (i) the title and aggregate principal amount of
the Offered Debt Securities; (ii) whether such Offered Debt Securities will be
issued in the form of one or more global securities and whether such global
securities are to be issuable in temporary global form or permanent global
form, and if so, whether beneficial owners of interests in any such global
security may exchange such interests for physical securities, and the initial
depositary for any global security; (iii) the date or dates on which the
principal of and premium, if any, on the Offered Debt Securities are payable
or the method of determination thereof; (iv) the rate or rates, or the method
of determination thereof, at which the Offered Debt Securities will bear
interest, if any; (v) whether and under what circumstances Additional Amounts
with respect to the Offered Debt Securities will be payable; (vi) the date or
dates from which such interest will accrue; (vii) the interest Payment Dates
on which such interest will be payable and the record date for the interest
payable on any Offered Debt Securities on any Interest Payment Date; (viii)
the Person to whom any interest on the Offered Securities will be payable;
(ix) the place or places where the principal of, premium
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(if any) and interest and any Additional Amounts with respect to the Offered
Debt Securities will be payable; (x) the period or periods within which, the
price or prices at which and the terms and conditions upon which Offered Debt
Securities may be redeemed, in whole or in part, at the option of the Company,
if the Company is to have that option; (xi) the obligation, if any, of the
Company to redeem, purchase or repay Offered Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of a holder thereof and
the period or periods within which, the price or prices (whether denominated
in cash, securities or otherwise) at which and the terms and conditions upon
which Offered Debt Securities will be redeemed, purchased or repaid in whole
or in part pursuant to such obligation; (xii) if other than denominations of
$1,000 and any integral multiple thereof, the denomination in which the
Offered Debt Securities will be issuable; (xiii) the currency or currencies
(including composite currencies), if other than U.S. dollars, in which payment
of principal, premium (if any) and interest on and any Additional Amounts with
respect to the Offered Debt Securities will be payable; (xiv) if such payments
are to be payable, at the election of the Company or a holder thereof, in a
currency or currencies (including composite currencies) other than that in
which the Offered Debt Securities are stated to be payable, the currency or
currencies (including composite currencies) in which such payments as to which
such election is made will be payable, and the periods within which and the
terms and conditions upon which such election is to be made; (xv) if the
amount of such payments may be determined with reference to any commodities,
currencies or indices, values, rates or prices or any other index or formula,
the manner in which such amounts will be determined; (xvi) if other than the
entire principal amount thereof, the portion of the principal amount of
Offered Debt Securities that will be payable upon declaration of acceleration
of the maturity thereof; (xvii) any additional means of satisfaction and
discharge of the applicable Indenture and any additional conditions or
limitations to discharge with respect to the Offered Debt Securities pursuant
to the applicable Indenture or any modifications of or deletions from such
conditions or limitations; (xviii) any deletions or modifications of or
additions to the Events of Default or covenants of the Company pertaining to
the Offered Debt Securities; (xix) any restrictions or other provisions with
respect to the transfer or exchange of Offered Debt Securities; (xx) if the
Offered Debt Securities are to be convertible into or exchangeable for Capital
Stock, other debt securities (including Debt Securities), warrants, other
equity securities or any other securities or property of the Company or any
other Person, at the option of the Company or the holder or upon the
occurrence of any condition or event, the terms and conditions for such
conversion or exchange; and (xxi) any other terms of the Offered Debt
Securities.
The Debt Securities will be issued in registered form. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Substantially all of the Company's operating income and cash flow is
generated by its subsidiaries and joint ventures. As a result, funds necessary
to meet the Company's debt service obligations are provided in part by
distributions or advances from its subsidiaries and joint ventures. Under
certain circumstances, contractual and legal restrictions, as well as the
financial condition and operating requirements of the Company's subsidiaries
and joint ventures, could limit the Company's ability to obtain cash from its
subsidiaries and joint ventures for the purpose of meeting its debt service
obligations, including the payment of principal and interest on Debt
Securities. The claims of creditors of the subsidiaries and joint ventures
will effectively have priority with respect to the assets and earnings of such
companies over the claims of creditors of the Company, including the holders
of Debt Securities.
Offered Debt Securities may be sold at a discount (which may be substantial)
below their stated principal amount bearing no interest or interest at a rate
that at the time of issuance is below market rates. Any material United States
federal income tax consequences and other special considerations applicable
thereto will be described in the Prospectus Supplement relating to any such
Offered Debt Securities.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit (including a composite currency) or if the principal, premium
(if any) or interest on or any Additional Amounts with respect to any of the
Offered Debt Securities is payable in any foreign currency or currency unit,
the restrictions,
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elections, tax consequences, specific terms and other information with respect
to such Offered Debt Securities and such foreign currency or currency unit
will be set forth in the Prospectus Supplement relating thereto.
Consolidation, Merger and Sale of Assets
The Indentures provide that the Company will not, in any transaction or
series of transactions, consolidate with or merge into any Person, or sell,
lease, convey, transfer or otherwise dispose of all or substantially all of
its assets to any Person, unless: (i) either (a) the Company shall be the
continuing corporation or (b) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged, or to which such sale,
lease, conveyance, transfer or other disposition shall be made, is organized
and validly existing under the laws of the United States of America, any
political subdivision thereof or any state thereof or the District of
Columbia, and shall expressly assume, by a supplemental indenture, the due and
punctual payment of the principal of (and premium, if any) and interest on and
Additional Amounts with respect to all the Debt Securities and the performance
of the Company's covenants and obligations under such Indenture and the Debt
Securities; (ii) immediately after giving effect to such transaction or series
of transactions, no default or Event of Default shall have occurred and be
continuing or would result therefrom; (iii) the Company delivers to the
Trustee an officer's certificate and an Opinion of Counsel, each stating that
the transaction and such supplemental indenture comply with the applicable
Indenture and (iv) the Company complies with any provisions provided for with
respect to any series of Debt Securities.
Events of Default
Unless otherwise provided with respect to any series of Debt Securities, the
following are Events of Default under each Indenture with respect to the Debt
Securities of such series issued under such Indenture: (i) default by the
Company for 30 days in payment of any interest or any Additional Amounts with
respect to any Debt Securities of such series; (ii) default by the Company in
the payment of (a) any principal of any Debt Securities of such series at its
maturity or (b) premium (if any) on any Debt Securities of such series when
the same becomes due and payable; (iii) default by the Company for 30 days in
the deposit of any sinking fund payment, when and as due by the terms of a
Debt Security of such series; (iv) default by the Company in compliance with
any of its other covenants or agreements in, or provisions of, the Debt
Securities of such series or the applicable Indenture (other than an
agreement, covenant or provision that has expressly been included in such
Indenture solely for the benefit of one or more series of Debt Securities
other than that series) which shall not have been remedied within 90 days
after written notice by the Trustee or by the holders of at least 25% in
principal amount of the then outstanding Debt Securities affected by such
default; (v) certain events involving bankruptcy, insolvency or reorganization
of the Company; and (vi) any other Event of Default provided with respect to
Debt Securities of that series. The Indentures provide that the Trustee may
withhold notice to the holders of the Debt Securities of any default or Event
of Default (except in payment of principal of, premium (if any) and interest
on any Additional Amounts or any sinking fund installment with respect to Debt
Securities of such series) if the Trustee considers it in the interest of the
holders of such Debt Securities to do so.
Each Indenture provides that if an Event of Default with respect to any Debt
Securities of any series at the time outstanding occurs and is continuing
(other than the event of default pursuant to (v) above), the applicable
Trustee or the holders of at least 25% in principal amount of the then
outstanding Debt Securities of the series affected by such default (or in the
event of a default pursuant to (iv) above, 25% in principal amount of the
securities affected) may declare the principal of and accrued and unpaid
interest on all then outstanding Debt Securities of such series or of all
series affected, as the case may be, to be due and payable. Upon such a
declaration, the amounts due and payable on such Debt Securities will be due
and payable immediately. If an event of default pursuant to (v) above occurs,
then the principal of and accrued and unpaid interest on all then outstanding
Debt Securities shall ipso facto become immediately due and payable without
any declaration, notice or other act on the part of the Trustee or any holder.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding Debt Securities of the series affected by such default or all
series, as the case may be, may rescind any such acceleration and its
consequences.
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Each Indenture provides that no holder of a Debt Security of any series may
pursue any remedy under such Indenture unless (i) the holder gives the
applicable Trustee written notice of a continuing Event of Default with
respect to such series, (ii) the holders of at least 25% in principal amount
of the then outstanding Debt Securities of such series make a written request
to the applicable Trustee to pursue such remedy, (iii) such holder or holders
offer to the applicable Trustee indemnity reasonably satisfactory to such
Trustee, (iv) the Trustee shall have failed to act for a period of 60 days
after receipt of such notice and offer of indemnity and (v) during such 60-day
period, the holders of a majority in principal amount of the Debt Securities
of that series do not give such Trustee a direction inconsistent with the
request; however, such provision does not affect the right of a holder of a
Debt Security to sue for enforcement of any overdue payment thereon.
Each Indenture provides that the holders of a majority in principal amount
of the then outstanding Debt Securities of a series or of all series affected,
as the case may be, may direct the time, method and place of conducting any
proceeding for any remedy available to the applicable Trustee or exercising
any trust or power conferred on it not relating to or arising under an Event
of Default, subject to certain limitations specified in such Indenture. Each
Indenture requires the annual filing by the Company with the applicable
Trustee of a written statement as to compliance with the covenants contained
in such Indenture.
Modification and Waiver
Modifications and amendments of each Indenture or the Debt Securities may be
made by the Company and the applicable Trustee with the consent of the Holders
of a majority in principal amount of the outstanding Debt Securities of all
series affected by such amendment (acting as one class) under the applicable
Indenture; provided, however, that no such modification, amendment, supplement
or waiver may, without the consent of each Holder of any outstanding Debt
Security so affected, (i) reduce the amount of Debt Securities whose holders
must consent to an amendment, supplement or waiver; (ii) reduce the rate of or
change the time for payment of interest, including default interest, on any
Debt Security; (iii) reduce the principal of or premium on, or change the
stated maturity of any Debt Security; (iv) reduce the premium, if any, payable
upon the redemption of any Debt Security or change the time at which any Debt
Security may or shall be redeemed; (v) change any obligation of the Company to
pay Additional Amounts with respect to any Debt Security; (vi) make any Debt
Security payable in money other than that stated in the Debt Security; (vii)
impair the right to institute suit for the enforcement of any payment of
principal of, premium (if any) or interest on or any Additional Amounts with
respect to any Debt Security; (vii) make any change in the percentage of
principal amount of Debt Securities necessary to waive compliance with certain
provisions of the applicable Indenture; or (viii) waive a continuing Default
or Event of Default in the payment of principal of, premium (if any) or
interest on or Additional Amounts with respect to the Debt Securities. In
addition, in the case of the Subordinated Debt Securities, no modification or
amendment may be made to the Subordinated Indenture with respect to the
subordination of any Subordinated Debt Security in a manner adverse to the
Holder thereof without the consent of the Holder of each Subordinated Debt
Security then outstanding affected thereby. The Indentures provide that
amendments and supplements to, or waivers of any provision of, such Indenture
may be made by the Company and the Trustee without the consent of any holders
of Debt Securities in certain circumstances, including, among other things,
(a) to cure any ambiguity, omission, defect or inconsistency, (b) to provide
for the assumption of the obligations of the Company under such Indenture upon
the merger, consolidation or sale or other disposition of all or substantially
all of the assets of the Company, (c) to provide for uncertificated Debt
Securities in addition to or in place of certificated Debt Securities, or to
provide for the issuance of bearer Debt Securities (with or without coupons),
(d) to secure any series of Debt Securities or to add guarantees of any series
of Debt Securities, (e) to comply with any requirement in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act of
1939 or (f) to make any change that does not adversely affect any outstanding
Debt Securities of any series in any material respect.
The Indentures provide that the Holders of a majority in principal amount of
the then outstanding Debt Securities of any series or of all series (acting as
one class) may waive any existing or past default or Event of Default with
respect to such series or all series, as the case may be, except (a) in the
payment of the principal of,
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or premium (if any) or interest on or any Additional Amounts with respect to
any Debt Securities or (b) in respect of a provision that under the proviso to
the prior paragraph cannot be amended or supplemented without the consent of
each Holder affected.
Defeasance
The Indentures provide that the Company may, at its option, elect (a) to
have all of the obligations of the Company discharged with respect to the Debt
Securities (except for certain obligations to register the transfer or
exchange of Debt Securities, replace stolen, lost or mutilated Debt Securities
or maintain paying agencies and hold moneys for payment in trust) ("legal
defeasance") or (b) to have its obligations terminated with respect to certain
restrictive covenants of the Indenture ("covenant defeasance"), in which event
certain Events of Default will no longer constitute Events of Default with
respect to any Debt Securities, upon the deposit with the Trustee, in trust,
of money or U.S. Government Obligations, or a combination thereof, 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 of (and premium, if any, on) and interest on such Debt Securities on
the dates such payments are due in accordance with the terms of the Debt
Securities on their stated maturity or any redemption date. The Company is
required to deliver to the Trustee an Opinion of Counsel to the effect that
the deposit and related defeasance would not cause the Holders of the Debt
Securities to recognize income, gain or loss for federal income tax purposes
and, in the case of a legal defeasance pursuant to clause (a), such opinion
must be based upon a ruling from the United States Internal Revenue Service or
a change in law to that effect.
Governing Law
Each Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of laws to the extent the laws of another
jurisdiction would be required thereby.
Trustees
Each Indenture contains certain limitations on the right of the applicable
Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim, as security or otherwise. Each Trustee is permitted to
engage in other transactions; however, if it acquires any conflicting interest
(as defined), it must eliminate such conflict or resign.
Form, Exchange, Registration and Transfer
Debt Securities of any series will be exchangeable for other Debt Securities
of the same series and of a like aggregate principal amount and tenor of
different authorized denominations in accordance with the applicable
Indenture. Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
applicable Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the Person making the request. The
Company has appointed the Trustee under each Indenture as Security Registrar
for Debt Securities issued thereunder. If a Prospectus Supplement refers to
any transfer agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of Debt Securities, the
Company may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts.
The Company is required to maintain an office or agency (which may be the
office of the Trustee, the Security Registrar or the Paying Agent) in each
Place of Payment for such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
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In the event of any redemption in part, the Company shall not be required to
(i) register the transfer or exchange of any Debt Security of any series
during a period beginning 15 Business Days prior to the mailing of the
relevant notice of redemption and ending on the close of business on the day
of mailing of such notice or (ii) register the transfer of or exchange any
Debt Security called for redemption in whole or in part, except the unredeemed
portion of any Debt Security being redeemed in part.
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal, premium (if any) and interest on and any Additional Amounts with
respect to Debt Securities will be made in dollars at the office of the
applicable Trustee, except that, at the option of the Company, payment of such
amounts may be made by check mailed to the holder's registered address or,
with respect to Global Debt Securities, by wire transfer. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment
of interest (except defaulted interest) on Debt Securities will be made to the
Person in whose name such Debt Security is registered at the close of business
on the record date next preceding the Interest Payment Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will be designated as a Paying Agent for the Company for payments with
respect to Debt Securities issued under the applicable Indenture. The Company
may at any time designate additional Paying Agents or rescind the designation
of any Paying Agent or approve a change in the office through which any Paying
Agent acts.
Subject to the requirements of any applicable abandoned property laws, each
Trustee and Paying Agent shall pay to the Company upon written request any
money held by them for the payment of principal, premium (if any), interest or
any Additional Amounts that remain unclaimed for two years after the date upon
which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another
Person, and all liability of such Trustee or Paying Agent with respect to such
money shall cease.
Book-Entry Debt Securities
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more global Debt Securities that would be deposited with a
depositary or its nominee identified in the applicable Prospectus Supplement.
Global Debt Securities may be issued in either temporary or permanent form.
The specific terms of any depositary arrangement with respect to any portion
of a series of Debt Securities and the rights of, and limitations on, owners
of beneficial interests in any such global Debt Security representing all or a
portion of a series of Debt Securities will be described in the applicable
Prospectus Supplement.
Provisions Applicable Solely to Subordinated Debt Securities
The payment of the principal of, premium, if any, and interest on and any
Additional Amounts with respect to the Subordinated Debt Securities is
expressly subordinated, to the extent and in the manner set forth in the
Subordinated Indenture and described in a Prospectus Supplement relating to
any series of Subordinated Debt Securities, to the prior payment in full of
all Senior Indebtedness of the Company. Unless otherwise indicated in an
applicable Prospectus Supplement relating to any series of Subordinated Debt
Securities, the following is a description of the Subordinated Debt Securities
and the Subordinated Indenture.
Unless otherwise provided with respect to Subordinated Debt Securities of a
series and described in a Prospectus Supplement, the Subordinated Indenture
provides that no payment may be made by or on behalf of the Company on account
of the principal of, premium, if any, or interest on or any Additional Amounts
with respect to the Subordinated Debt Securities, or to acquire any of the
Subordinated Debt Securities (including repurchases of Subordinated Debt
Securities at the option of the Holder thereof) for cash or property (other
than certain junior securities of the Company), or on account of the
redemption provisions of the Subordinated Debt Securities, in the event of (i)
default in the payment of any principal of, premium, if any, or interest on
any Senior Indebtedness of the Company when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has
been cured or waived or otherwise has ceased to exist, or (ii) any other event
of default with respect to any
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Designated Senior Indebtedness permitting the holders of such Designated
Senior Indebtedness (or a trustee or other representative on behalf of the
holders thereof) to declare such Designated Senior Indebtedness due and
payable prior to the date on which it would otherwise have become due and
payable, upon written notice thereof to the Company and the Subordinated
Trustee by any holders of such Designated Senior Indebtedness (or a trustee or
other representative on behalf of the holders thereof) (the "Payment Blockage
Notice"), unless and until such event of default shall have been cured or
waived or otherwise has ceased to exist, provided that such payments may not
be prevented under clause (ii) above for more than 179 days after an
applicable Payment Blockage Notice has been received by the Subordinated
Trustee unless the Designated Senior Indebtedness in respect of which such
event of default exists has been declared due and payable in its entirety, in
which case no such payment may be made until such acceleration has been
rescinded or annulled or such Designated Senior Indebtedness has been paid in
full. In the case of (ii) above, no event of default that existed or was
continuing on the date of any Payment Blockage Notice (whether or not such
event of default is on the same issue of Designated Senior Indebtedness) may
be made the basis for the giving of a second Payment Blockage Notice, and only
one such Payment Blockage Notice may be given in any 360-day period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than certain junior securities of
the Company or from the trust described under "Defeasance") is received by the
Subordinated Trustee or the Holders of Subordinated Debt Securities at a time
when such payment or distribution is prohibited by the foregoing provisions,
then, unless such payment or distribution is no longer prohibited by the
foregoing provisions, such payment or distribution shall be received and held
in trust by the Subordinated Trustee or such Holders or the Paying Agent for
the benefit of the holders of Senior Indebtedness of the Company, and shall be
paid or delivered by the Subordinated Trustee or such Holders or the Paying
Agent, as the case may be, to the holders of the Senior Indebtedness of the
Company remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness of the Company may
have been issued, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Indebtedness of the Company held or represented by
each, for application to the payment of all Senior Indebtedness in full after
giving effect to any concurrent payment or distributions to or for the holders
of such Senior Indebtedness.
Upon any distribution of assets of the Company or upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors, (i) the
holders of all Senior Indebtedness of the Company will first be entitled to
receive payment in full before the Holders of Subordinated Debt Securities are
entitled to receive any payment on account of the principal of, premium, if
any, and interest on or any Additional Amounts with respect to the
Subordinated Debt Securities (other than certain junior securities of the
Company or from the trust described under "Defeasance") and (ii) any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than certain junior securities of the
Company or from the trust described under "Defeasance") to which the Holders
of Subordinated Debt Securities or the Subordinated Trustee on behalf of such
Holders would be entitled, except for the subordination provisions contained
in the Subordinated Indenture, will be paid by the liquidating trustee or
agent or other person making such a payment or distribution directly to the
holders of Senior Indebtedness of the Company or their representative, ratably
according to the respective amounts of Senior Indebtedness held or represented
by each, to the extent necessary to make payment in full of all such Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment
or distributions to the holders of such Senior Indebtedness.
No provision contained in the Subordinated Indenture or the Subordinated
Debt Securities affects the obligation of the Company, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest
on and any Additional Amounts with respect to the Subordinated Debt
Securities. The subordination provisions of the Subordinated Indenture and the
Subordinated Debt Securities do not prevent the occurrence of any default or
Event of Default under the Subordinated Indenture or limit the rights of the
Subordinated Trustee or any Holder of Subordinated Debt Securities, subject to
the two preceding paragraphs, to pursue any other rights or remedies with
respect to the Subordinated Debt Securities.
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As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any of its subsidiaries or joint ventures or a marshaling of assets or
liabilities of the Company and its subsidiaries and joint ventures, Holders of
Subordinated Debt Securities may receive ratably less than other creditors.
The term "Senior Indebtedness" of the Company, unless otherwise provided
with respect to the Subordinated Debt Securities of a series and described in
the Prospectus Supplement relating thereto, is defined in the Subordinated
Indenture as (i) all Indebtedness and other monetary obligations (including
expenses and fees) under the Credit Agreement dated as of July 23, 1998 (the
"Existing Credit Facility") among the Company, the lenders and agents party
thereto, DLJ Capital Funding, Inc., as Syndication Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time, and
(ii) all other Indebtedness, unless, by the terms of the instrument creating
or evidencing such Indebtedness, it is provided that such Indebtedness is not
superior in right of payment to the Subordinated Debt Securities or to other
Indebtedness which is pari passu with or subordinated to the Subordinated Debt
Securities, and (iii) all interest on any Indebtedness referred to in clause
(i) and (ii) accruing during the pendency of any bankruptcy or insolvency
proceeding whether or not allowed or allowable thereunder; provided that in no
event shall "Senior Indebtedness" include (a) Indebtedness of the Company owed
or owing to any subsidiary or joint venture of the Company or any officer,
director or employee of the Company or any subsidiary or joint venture of the
Company, (b) Indebtedness to trade creditors, (c) any debt securities and
guarantees issued to any trust, partnership or other entity affiliated with
the Company which is a financing vehicle of the Company in connection with the
issuance of preferred securities by such financing entity, (d) any
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Code, is without recourse to the Company,
(e) any Indebtedness of the Company, to the extent not permitted to be
incurred by the Indenture or (f) any liability for taxes owed or owing by the
Company.
The term "Designated Senior Indebtedness," unless otherwise provided with
respect to the Subordinated Debt Securities of a series and described in the
Prospectus Supplement relating thereto, is defined in the Subordinated
Indenture to mean (A) Indebtedness and other monetary obligations (including
expenses and fees) under the Existing Credit Facility and (B) any other Senior
Indebtedness of the Company that (i) in the instrument evidencing the same or
the assumption or guarantee thereof (or related documents to which the Company
is a party) is expressly designated as "Designated Senior Indebtedness" for
purposes of the Subordinated Indenture and (ii) satisfies such other
conditions as may be provided with respect to the Subordinated Debt Securities
of such series (provided that such instruments or documents may place
limitations and conditions on the rights of the holders of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness).
The term "Indebtedness," unless otherwise provided with respect to the
Subordinated Debt Securities of a series and described in the Prospectus
Supplement relating thereto, is defined in the Subordinated Indenture to mean,
without duplication, (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto), other than
standby letters of credit, performance bonds and other obligations issued by
or for the account of such Person in the ordinary course of business, to the
extent not drawn or, to the extent drawn, if such drawing is reimbursed not
later than the third Business Day following demand for reimbursement, (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred in
the ordinary course of business, (v) all Capitalized Lease Obligations of such
Person, (vi) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person (provided
that if the obligations so secured have not been assumed in full by such
Person or are not otherwise such Person's legal liability in full, then such
obligations shall be
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deemed to be in an amount equal to the greater of (a) the lesser of (1) the
full amount of such obligations and (2) the fair market value of such assets,
as determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a Board Resolution, and (b) the amount of
obligations as have been assumed by such Person or which are otherwise such
Person's legal liability), and (vii) all Indebtedness of others (other than
endorsements in the ordinary course of business) guaranteed by such Person to
the extent of such guarantee.
If Subordinated Debt Securities are issued under the Subordinated Indenture,
the aggregate principal amount of Senior Indebtedness outstanding as of a
recent date will be set forth in the Prospectus Supplement. The Subordinated
Indenture does not restrict the amount of Senior Indebtedness that the Company
may incur.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in any of three ways (or in any
combination thereof): (i) through underwriters or dealers; (ii) directly to a
limited number of purchasers or to a single purchaser; or (iii) through
agents. The Prospectus Supplement with respect to any Offered Securities will
set forth the terms of the offering of such Offered Securities, including the
name or names of any underwriters, dealers or agents and the respective
amounts of such Offered Securities underwritten or purchased by each of them,
the initial public offering price of such Offered Securities and the proceeds
to the Company from such sale, any discounts, commissions or other items
constituting compensation from the Company and any discounts, commissions or
concessions allowed or reallowed or paid to dealers and any securities
exchanges on which such Offered Securities may be listed. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid
to dealers may be changed from time to time.
If underwriters are used in the sale of any Offered Securities, such Offered
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. Such Offered Securities may be either offered to the
public through underwriting syndicates represented by managing underwriters,
or directly by underwriters. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase such Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all of such Offered Securities if
any are purchased.
Offered 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 Offered Securities in respect of which this 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
underwriters, dealers or agents to solicit offers by certain purchasers to
purchase Offered 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 and/or
any of its affiliates in the ordinary course of business.
In connection with the offering, the underwriters or agents, as the case may
be, may purchase and sell the Offered Securities in the open market. These
transactions may include overallotment and stabilizing transactions and
purchases to cover syndicate short positions created in connection with the
offering. Stabilizing transactions
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<PAGE>
consist of certain bids or purchases for the purpose of preventing or
retarding a decline in the market price of the Offered Securities; and
syndicate short positions involve the sale by the underwriters or agents, as
the case may be, of a greater number of Offered Securities than they are
required to purchase from the Company in the offering. The underwriters may
also impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker-dealers for the Offered Securities sold for their
account may be reclaimed by the syndicate if such Offered Securities are
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Offered Securities, which may be higher than the price that might otherwise
prevail in the open market, and, if commenced, may be discontinued at any
time. These transactions may be effected on the New York Stock Exchange, in
the over-the-counter market or otherwise.
The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for the Securities.
Certain persons participating in any offering of Securities may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Securities offered, including, among others, overallotment, stabilizing and
short-covering transactions in such Securities, and the imposition of a
penalty bid, in connection with any offering of Securities. For a description
of these activities, see "Plan of Distribution" or "Underwriting" in the
relevant Prospectus Supplement.
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Company by Baker & Botts, L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of Lyondell Chemical Company as of
December 31, 1998 and 1997 and for each of the three years in the period ended
December 31, 1998 incorporated in this prospectus by reference to Lyondell
Chemical Company's Annual Report on Form 10-K for the year ended December 31,
1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Equistar Chemicals, LP as of December 31, 1998
and 1997 and for the year ended December 31, 1998 and the period from December
1, 1997 (inception) to December 31, 1997 incorporated in this prospectus by
reference to Lyondell Chemical Company's Annual Report on Form 10-K for the
year ended December 31, 1998 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The financial statements of LYONDELL-CITGO Refining LP as of December 31,
1998 and for the year then ended incorporated in this prospectus by reference
from the Annual Report on Form 10-K of Lyondell Chemical Company for the year
ended December 31, 1998 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
The financial statements of LYONDELL-CITGO Refining LP as of December 31,
1997 and for each of the two years in the period ended December 31, 1997
incorporated in this prospectus by reference to Lyondell Chemical Company's
Annual Report on Form 10-K for the year ended December 31, 1998 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
24
<PAGE>
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"), which can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549;
and at the regional offices of the Commission at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. Information concerning the
operation of the public reference facilities may be obtained by calling 1-800-
SEC-0330. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission (http://www.sec.gov). The Common
Stock is listed on the New York Stock Exchange, and such material also can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
This Prospectus, which constitutes part of a registration statement on Form
S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), omits
certain of the information contained in the Registration Statement. Reference
is hereby made to the Registration Statement and the exhibits thereto, which
may be obtained at the public reference facilities maintained by the
Commission as described in the preceding paragraph, for further information
with respect to the Company and the securities offered hereby. Statements
contained herein concerning the provisions of such documents are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company has filed with the Commission
pursuant to the Exchange Act (File No. 1-10145), are incorporated in this
Prospectus by reference and shall be deemed to be a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) The description of the common stock, par value $1.00 per share, of
the Company contained in the Company's Registration Statement on Form 8-A
dated December 16, 1988, as such Registration Statement may be amended from
time to time for the purpose of updating, changing or modifying such
description; and
(c) The description of the Rights to Purchase Common Stock contained in
the Company's Registration Statement on Form 8-A dated December 12, 1995,
as such Registration Statement may be amended from time to time for the
purpose of updating, changing or modifying such description.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such document. 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 that also is or is deemed to be incorporated by reference herein
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.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, a copy of any or
all documents that have been incorporated herein by reference (not including
exhibits to the documents that have been incorporated herein by reference
unless such exhibits are specifically incorporated by reference in the
documents this Prospectus incorporates). Requests should be directed to
Corporate Secretary, Lyondell Chemical Company, 1221 McKinney, Houston, Texas
77010 (telephone: (713) 652-7200).
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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 APRIL 1, 1999
PROSPECTUS $4,000,000,000
[LOGO OF LYONDELL APPEARS HERE]
Lyondell Chemical Company
Subordinated Debt Securities
Lyondell Trust I
Lyondell Trust II
Lyondell Trust III
Preferred Trust Securities fully and unconditionally guaranteed, as set forth
herein, by
Lyondell Chemical Company
Lyondell Chemical Company (the "Company" or "Lyondell") may from time to time
offer, together or separately, unsecured subordinated debt securities (the
"Subordinated Debt Trust Securities") consisting of debentures, notes or other
evidences of indebtedness in one or more series and in amounts, at prices and
on terms to be determined at or prior to the time of any such offering. The
Subordinated Debt Trust Securities when issued will be unsecured obligations of
the Company. The Company's obligations under the Subordinated Debt Trust
Securities will be subordinate and junior in right of payment with all Senior
Debt (as defined in the Prospectus Supplement) of the Company.
See "Risk Factors" beginning on page 2 for a discussion of certain factors
that should be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Lyondell Trust I, Lyondell Trust II and Lyondell Trust III (collectively, the
"Lyondell Trusts"), each a statutory business trust created under the laws of
the State of Delaware, may offer and sell, from time to time, preferred trust
securities representing undivided beneficial interests in the assets of the
respective Lyondell Trust (the "Preferred Securities" and, together with the
Subordinated Debt Trust Securities, the "Securities"). The Preferred Securities
may be offered in amounts, at prices and on terms to be determined at or prior
to the time of any such offering. The payment of periodic cash distributions
("distributions") with respect to Preferred Securities of each of the Lyondell
Trusts out of moneys held by the Property Trustee (as defined herein) of each
of the Lyondell Trusts, and payments on liquidation of each Lyondell Trust and
on redemption of Preferred Securities of such Lyondell Trust, will be
guaranteed by the Company fully and unconditionally as described herein (each
such guarantee, a "Preferred Securities Guarantee"). See "Description of the
Preferred Securities Guarantees." The Company's obligation under each Preferred
Securities Guarantee is an unsecured obligation of the Company. The ranking of
the Company's obligation under a Preferred Securities Guarantee will be set
forth in the Prospectus Supplement. Subordinated Debt Trust Securities may be
issued and sold from time to time in one or more series by the Company to a
Lyondell Trust in connection with the investment of the proceeds from the
offering of Preferred Securities and Common Securities (as defined herein) of
such Lyondell Trust. The Subordinated Debt Trust Securities purchased by a
Lyondell Trust may be subsequently distributed pro rata to holders of Preferred
Securities and Common Securities in connection with the dissolution of such
Lyondell Trust, at the election of Lyondell or upon the occurrence of certain
events as may be described in the Prospectus Supplement.
Specific terms of the Subordinated Debt Trust Securities and the Preferred
Securities in respect of which this Prospectus is being delivered (the "Offered
Securities") will be set forth in a Prospectus Supplement with respect to such
Offered Securities, which will describe, without limitation and where
applicable, the following: (i) in the case of Subordinated Debt Trust
Securities, the specific designation, aggregate principal amount, authorized
denomination, maturity, premium, if any, exchangeability, redemption,
conversion, prepayment or sinking fund provisions, if any, interest rate (which
may be fixed or variable), if any, method, if any, of calculating interest
payments, and dates for payment thereof, dates on which premium, if any, will
be payable, the right of the Company, if any, to defer payment of interest on
the Subordinated Debt Trust Securities and the maximum length of such deferral
period, the public offering price, any listing on a securities exchange, the
definition of Senior Debt and other specific terms of the offering; and (ii) in
the case of Preferred Securities, the specific designation, number of
securities, liquidation amount per security, initial public offering price, and
any listing on a securities exchange, distribution rate (or method of
calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accumulate, voting rights (if any), terms for
any conversion or exchange into other securities, any redemption or sinking
fund provisions, any other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Securities and the terms upon which the
proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Subordinated Debt Trust Securities. Unless otherwise
indicated in the Prospectus Supplement, the Company does not intend to list any
of the Offered Securities on a national securities exchange.
By separate prospectus, the form of which is included in the Registration
Statement of which this Prospectus is a part, the Company may offer from time
to time debt securities, common stock or preferred stock. The aggregate initial
public offering price of the securities to be offered pursuant to this
Prospectus and such other prospectus shall not exceed $4,000,000,000.
The Offered Securities may be offered directly, through agents designated
from time to time, through dealers or through underwriters. Such agents or
underwriters may act alone or with other agents or underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters will be set forth in
the Prospectus Supplement. If an agent of the Company and/or any Lyondell
Trust, or a dealer or underwriter is involved in the offering of the Offered
Securities, the agent's commission, dealer's purchase price, underwriter's
discount and net proceeds to the Company and/or the applicable Lyondell Trust,
as the case may be, will be set forth in, or may be calculated from, the
Prospectus Supplement. Any underwriters, dealers or agents participating in the
offering may be deemed "underwriters" within the meaning of the Securities Act
of 1933.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is
<PAGE>
THE COMPANY
Lyondell Chemical Company ("Lyondell" or the "Company") is a vertically
integrated, global chemical company with leading market positions in all of
its major products and low cost operations. The Company's principal executive
offices are located at 1221 McKinney Street, Houston, Texas 77010 (telephone
(713) 652-7200).
FORWARD-LOOKING STATEMENTS
Certain of the statements contained or incorporated by reference in this
Prospectus and the accompanying Prospectus Supplement, are "forward-looking
statements" within the meaning of the federal securities laws. Although
Lyondell believes the expectations reflected in such forward-looking
statements are reasonable, they do involve certain inherent assumptions, risks
and uncertainties, and Lyondell can give no assurance that such expectations
will prove to have been correct. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of the risk factors set forth below and other factors set forth in or
incorporated by reference in this Prospectus and the accompanying Prospectus
Supplement. These factors include the cyclical and highly competitive nature
of the chemical and refining industries, uncertainties associated with the
United States and worldwide economies, current and potential governmental
regulatory actions in the United States and in other countries, substantial
chemical capacity additions resulting in oversupply and declining prices and
margins, raw material costs or supply arrangements, the Company's ability to
implement cost reductions, and operating interruptions (including leaks,
explosions, fires, mechanical failure, labor difficulties, unscheduled
downtime, transportation interruptions, spills and releases, and other
environmental risks). Many of such factors are beyond Lyondell's or its joint
ventures' ability to control or predict. Management cautions against putting
undue reliance on forward-looking statements or projecting any future results
based on such statements or present or prior earnings levels.
All subsequent written and oral forward-looking statements attributable to
the Company and persons acting on its behalf are qualified in their entirety
by the cautionary statements contained in this section and elsewhere in this
Prospectus.
RISK FACTORS
The following risk factors should be considered carefully with the
information provided elsewhere in this Prospectus and the accompanying
Prospectus Supplement and the documents incorporated by reference herein in
reaching a decision regarding an investment in the Securities offered hereby.
High Leverage and Related Matters
As of December 31, 1998, the Company had outstanding consolidated debt of
approximately $7.0 billion. In addition, the Company remains liable on $713
million of debt for which primary responsibility was assumed by Equistar
Chemicals, LP ("Equistar") in connection with the formation of Equistar. The
Company's consolidated ratio of earnings to fixed charges would have been 1.1
to 1 for 1998 on a pro forma basis if the acquisition of LCW and the related
debt incurrence had occurred on January 1, 1998.
The current amount of debt of the Company significantly exceeds the
Company's historical leverage and significantly increases its debt service
obligations. The Company's historical results and financial condition do not,
accordingly, reflect the potential constraints the increase in leverage may
impose on the Company. The Company's significant increase in leverage could
have adverse effects on the Company, including: (i) the
2
<PAGE>
leverage may make the Company more vulnerable to industry cyclicality and may
limit its ability to withstand competitive pressures and adverse changes in
environmental and other government regulation, (ii) a substantial portion of
cash flow from operations (as well as cash generated from asset sales, if any,
and financings) must be dedicated to the payment of principal of and interest
on debt and will not be available for other uses such as capital expenditures
or acquisitions, (iii) additional financing is not available to the Company
upon terms as favorable as those previously available to the Company, which
may limit the Company's business growth, including its ability to effect
potential acquisitions and (iv) the Company may not be able to maintain its
current dividend rate.
The Company's credit facilities and other indebtedness contain numerous
financial and other covenants that affect and restrict the Company's business.
The ability of the Company to meet its debt service obligations and capital
expenditure needs, maintain its dividend rate and comply with the covenants
and financial requirements in the credit facilities and other indebtedness
will largely depend on the future performance of the Company and availability
of additional financing to repay and refinance bank debt, both of which will
be subject to prevailing economic, market and competitive conditions and to
other factors beyond the Company's control. The breach of any of the covenants
or financial requirements in the credit facilities or other indebtedness could
result in a default thereunder, which would permit the lenders to declare the
loans immediately payable and to terminate future lending commitments.
As of December 31, 1998, Equistar, LYONDELL-CITGO Refining, LP ("LCR") and
Lyondell Methanol Company, L.P. ("Lyondell Methanol") (the "Joint Ventures")
had, in the aggregate, outstanding debt of approximately $2.9 billion and
owners' equity of $4.6 billion. The ability of the Joint Ventures to
distribute cash to the Company is limited by their respective debt service
obligations. In addition, a default under certain Joint Venture debt
agreements would constitute a cross-default under the Company's credit
facilities. Certain debt instruments that were assumed by Equistar, but as to
which Lyondell remains an obligor as well, contain provisions that generally
provide that holders of such debt may, under certain limited circumstances,
require an obligor to repurchase the debt ("Put Rights"). The Put Rights would
be triggered by a specified decline in public ratings on such debt following
(i) certain events affecting control of Lyondell or Equistar or (ii) the
making by Lyondell or Equistar of certain dividends, distributions or
repurchases in excess of specified amounts. The debt subject to the Put Rights
consists of $150 million aggregate principal amount of notes maturing in June
1999, bearing interest at 10 percent, and $163 million aggregate principal
amount of medium-term notes maturing at various dates through 2005, with a
weighted average interest rate at December 31, 1998 of 9.87 percent. To date,
these Put Rights have not been triggered.
Industry Cyclicality and Overcapacity
The Company's historical operating results reflect the cyclical and volatile
nature of both the chemical and refining industries. The Company experienced
earnings declines in the fourth quarter of 1998 compared to the third quarter
of 1998 primarily because of lower prices in both the chemicals and refining
industries. Both industries are mature and capital intensive, and industry
margins are sensitive to supply and demand balances, which have historically
been cyclical. The chemical industry historically has experienced alternating
periods of tight supply, causing prices and profit margins to increase,
followed by periods of substantial capacity additions, resulting in oversupply
and declining prices and profit margins. Due to the commodity nature of most
of the Company's products, the Company is not necessarily able to protect its
market position by product differentiation or to pass on cost increases to its
customers. Accordingly, increases in raw material and other costs do not
necessarily correlate with changes in product prices, either in the direction
of the price change or in absolute magnitude. Moreover, a number of
participants in various segments of the chemical industry have announced plans
for expansion of plant capacity. There can be no assurance that future growth
in product demand will be sufficient to utilize this additional, or even
current, capacity. Excess industry capacity, to the extent it occurs,
depresses the Company's volumes and margins. As a result, the Company's
earnings are subject to significant fluctuation.
External factors beyond the Company's control, such as general economic
conditions, competitor action, international events and circumstances and
governmental regulation in the United States and abroad, can cause volatility
in feedstock prices, as well as fluctuations in demand for the Company's
products, product prices,
3
<PAGE>
volumes and margins, and can magnify the impact of economic cycles on the
Company's business. A number of the Company's products are highly dependent on
durable goods markets, such as housing and automotive, that are particularly
cyclical.
Intense Competition
The chemical industry is highly competitive. Many of the Company's
competitors are larger and have greater financial resources than the Company.
Among Lyondell's chemical competitors are some of the world's largest chemical
companies, including The Dow Chemical Company, Shell Chemical, BASF AG, Bayer
AG and Union Carbide Corporation. In the past several years, there have been a
number of mergers, acquisitions and
spin-offs in the chemical industry. This restructuring activity may result in
fewer but more competitive producers with greater financial resources than the
Company.
Competition within the chemical industry is affected by a variety of
factors, including product price, reliability of product supply, technical
support, customer service, product quality and availability to the market of
potential substitute materials. Changes in the competitive environment,
including (i) the emergence of new competitors, (ii) the rate of capacity
additions by competitors, (iii) the intensification of price competition in
the Company's markets, (iv) the introduction of new or substitute products by
competitors, (v) technological innovations by competitors and (vi) new
environmental laws and regulatory requirements, could have a material adverse
effect on the business and operations of the Company.
Potential Difficulties in Integrating Recently Acquired and Combined
Operations
The Company acquired Lyondell Chemical Worldwide, Inc. (formerly ARCO
Chemical Company) ("LCW") in July 1998. The Company combined its
petrochemicals and polymers business with that of Millennium Chemicals Inc. to
form Equistar Chemicals, LP in December 1997. Equistar was expanded by the
addition of certain businesses previously held by Occidental Petroleum
Corporation in May 1998. The process of integrating the operations of LCW with
the Company has only recently begun, and the process of integrating the
operations of Equistar is not complete.
As is the case with any integration of major businesses that previously
operated independently, the integration processes for LCW and for Equistar
will require the dedication of significant management and operational
resources. The difficulties of combining operations may be exacerbated by the
necessity of coordinating geographically separate organizations, integrating
personnel with disparate business backgrounds and combining different
transaction processing and financial reporting systems and processes and
corporate cultures. The process of integrating operations could cause an
interruption of, or loss of momentum in, the activities of the combined
enterprise's business. In addition, the Company may suffer a loss of key
employees, customers or suppliers, loss of revenues, increases in costs or
other difficulties, some of which may not have been foreseen. There can be no
assurance that the Company will be able to realize the operating efficiencies,
cost savings and other benefits that are sought from such transactions.
Difficulties encountered in the integration processes could have a material
adverse effect on the business and operations of the Company.
Acquisitions, Dispositions and Joint Ventures
Each of Lyondell and Equistar actively seeks opportunities to maximize
efficiency or value through various transactions. These transactions may
include purchases or sales of assets or contractual arrangements or joint
ventures that are intended to result in the realization of synergies, the
creation of efficiencies or the generation of cash to reduce indebtedness. To
the extent permitted under Lyondell's and Equistar's credit facilities and
other indebtedness, some of these transactions may be financed by additional
borrowings by Lyondell or Equistar or by the issuance of equity securities.
These transactions may often affect the results of operations of Lyondell or
Equistar in the short term because of the costs associated with such
transactions, but they are expected to yield longer-term benefits if the
expected efficiencies and synergies of the transactions are realized. Factors
such as those described in "--Potential Difficulties in Integrating Recently
Acquired and Combined Operations" may make it difficult or impossible to
realize such expected efficiencies and synergies.
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Shared Control of Joint Ventures
The Company conducts a substantial amount of its operations through its
Joint Ventures. The Company shares control of these Joint Ventures with
unaffiliated third parties.
The Company's forecasts and plans with respect to these Joint Ventures
assume that its joint venture partners will observe their obligations with
respect to the Joint Ventures. In the event that any of the Company's joint
venture partners do not observe their commitments, it is possible that the
affected Joint Venture would not be able to operate in accordance with its
business plans or that the Company would be required to increase its level of
commitment in order to give effect to such plans.
Joint Venture Structure
The Company conducts a substantial amount of its operations through its
Joint Ventures. The Company's ability to meet its debt service obligations is
dependent, in part, upon the receipt of distributions from its Joint Ventures.
Subject to the provisions of the applicable debt agreements, future borrowings
by the Company's Joint Ventures may contain restrictions or prohibitions on
the payment of distributions by such Joint Ventures to the Company. Under
applicable state law, the Company's Joint Ventures may be limited in amounts
that they are permitted to pay as distributions on their equity interests.
As with any such joint venture arrangements, differences in views among the
joint venture participants may result in delayed decisions or in failures to
agree on major matters, potentially adversely affecting the business and
operations of the Joint Ventures and in turn the business and operations of
the Company.
Importance of Crude Oil Supply Agreement and Related Risks
Substantially all of the crude oil used by LCR as a feedstock for its
refinery is purchased under the Crude Supply Agreement with PDVSA Petroleo y
Gas S.A. ("PDVSA Oil"), which, like CITGO Petroleum Corporation ("CITGO"), is
a subsidiary of Petroleos de Venezuela, S.A., the Venezuelan national oil
company. The Crude Supply Agreement was entered into in 1993 and the Company
experienced the full effects of the Crude Supply Agreement beginning in 1997.
The Crude Supply Agreement incorporates formula prices to be paid by LCR for
the crude oil supplied based on the market value of a slate of refined
products deemed to be produced from each particular crude oil or feedstock,
less (i) certain deemed refining costs adjustable for inflation, (ii) certain
actual costs, including crude oil transportation costs, import duties and
taxes and (iii) a deemed margin, which varies according to the grade of crude
oil or feedstock delivered. Deemed costs are adjusted periodically based on
inflation rates for specific deemed cost components. Adjustments to margins
track, but are less than, inflation rates. Because deemed operating costs and
the slate of refined products deemed to be produced from a given barrel of
crude oil or other feedstocks do not necessarily reflect the actual costs and
yields in any period and also because the market value of the refined products
used in the pricing formula does not necessarily reflect the actual price
received for the refined products, the actual refining margin earned by LCR
varies depending on, among other things, the efficiency with which LCR
conducts its operations from time to time. Although LCR believes that the
Crude Supply Agreement reduces the volatility of its earnings and cash flows,
the Crude Supply Agreement also limits LCR's ability to enjoy higher margins
during periods when the market price of crude oil is low relative to the then
current market prices for refined products. In addition, if the actual yields,
costs or volumes of the LCR refinery differ substantially from those
contemplated by the Crude Supply Agreement, the benefits of this agreement to
LCR could be substantially diminished, and could result in lower earnings and
cash flow for LCR. Furthermore, there may be periods during which LCR's costs
for crude oil under the Crude Supply Agreement may be higher than might
otherwise be available to LCR from other sources.
There are risks associated with enforcing the provisions of contracts with
companies such as PDVSA Oil that are non-United States affiliates of a
sovereign nation. It is impossible to predict how governmental policies may
change under the current or any subsequent Venezuelan government. In addition,
there are risks associated
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with enforcing judgments of United States courts against entities whose assets
are located outside of the United States and whose management does not reside
in the United States. In addition, all of the crude oil supplied by PDVSA Oil
under the Crude Supply Agreement is produced in Venezuela, a country that has
experienced economic difficulties and attendant social and political unrest in
recent years. If the Crude Supply Agreement is modified or terminated or this
source of crude oil is otherwise interrupted due to production difficulties,
OPEC-mandated supply cuts, political or economic events in Venezuela or other
factors, LCR could experience significantly greater volatility in its earnings
and cash flows. The parties each have the right to transfer their interests in
LCR to unaffiliated third parties in certain circumstances, subject to
reciprocal rights of first refusal. In the event that CITGO were to transfer
its interest in LCR to an unaffiliated third party, PDVSA Oil would have an
option to terminate the Crude Supply Agreement. Depending on then current
market conditions, any breach or termination of the Crude Supply Agreement
could adversely affect LCR, since LCR would have to purchase all of its crude
oil feedstocks in the merchant market, which could subject LCR to significant
price fluctuations. There can be no assurance that alternative crude oil
supplies providing similar margins would be available for purchase by LCR.
In late April 1998, LCR received notification from PDVSA of reduced delivery
of crude oil related to announced OPEC production cuts. In August 1998, LCR
began receiving reduced allocations of crude oil from PDVSA. Following
additional cutbacks announced by OPEC in late March 1999, LCR anticipates
further reductions in its allocation of crude oil under the Crude Supply
Agreement. Historically Venezuela has complied with OPEC-mandated supply cuts
by reducing crude supply. Decreased allocations of PDVSA crude oil tend to
reduce LCR's pretax income and, accordingly, Lyondell's pro rata share of
LCR's income. OPEC-mandated supply cuts are a force majeure event under the
Crude Supply Agreement for which the Company has no contractual remedy. While
to date LCR has been able to obtain alternate supplies of crude oil, the
margin for these crude oils has been less than for the extra heavy Venezuelan
crude oil purchased under the Crude Supply Agreement. There can be no
assurance that PDVSA will not announce further cutbacks in crude oil
production thereby reducing LCR's allocation of extra heavy crude oil or that
LCR will be able to continue to obtain adequate alternative supplies of crude
oil or at what cost Lyondell will be able to obtain such substitute crude oil.
Operating Hazards
The occurrence of material operating problems, including but not limited to
the events described below, may have a material adverse effect on the
productivity and profitability of a particular manufacturing facility, or on
the Company as a whole, during and after the period of such operational
difficulties. The Company's revenues are dependent on the continued operation
of its various production facilities (including the ability to complete
construction projects on schedule). The Company's operations are subject to
the usual hazards associated with chemical manufacturing and refining and the
related storage and transportation of feedstocks, products and wastes,
including pipeline leaks and ruptures, explosions, fires, inclement weather
and natural disasters, mechanical failure, unscheduled downtime, labor
difficulties, transportation interruptions, remediation complications,
chemical spills, discharges or releases of toxic or hazardous substances or
gases, storage tank leaks and other environmental risks. These hazards can
cause personal injury and loss of life, severe damage to or destruction of
property and equipment and environmental damage, and may result in suspension
of operations and the imposition of civil or criminal penalties. Furthermore,
the Company is also subject to present and future claims with respect to
workplace exposure, workers' compensation and other matters. The Company
maintains property, business interruption and casualty insurance which it
believes is in accordance with customary industry practices, but it is not
fully insured against all potential hazards incident to its business.
Environmental Considerations
The Company's operations and ownership and use of real property are subject
to extensive environmental, health and safety laws and regulations promulgated
by domestic and foreign governments at both the national and local level. Many
of these laws and regulations impose requirements relating to the clean-up of
contamination, impose liability in the event of damage of natural resources
and provide for substantial fines and
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potential criminal sanctions for violations. The nature of the chemical and
refining industries exposes the Company to risks of liability under such laws
and regulations due to the production, refining, storage, transportation and
sale of materials that can cause contamination or personal injury if released
into the environment. In addition, individuals could seek damages for alleged
personal injury or property damage due to exposure to chemicals at the
Company's facilities or to chemicals otherwise owned or controlled by the
Company. Environmental laws may have a significant effect on the nature and
scope of cleanup of contamination at current and former operating facilities,
the costs of transportation and storage of feedstocks and finished products
and the costs of the storage and disposal of wastes. Also, "Superfund"
statutes may impose joint and several liability for the costs of remedial
investigations and actions on the entities that generated waste, arranged for
disposal of the wastes, transported to or selected the disposal sites and the
past and present owners and operators of such sites. All such responsible
parties (or any one of them, including the Company) may be required to bear
all of such costs regardless of fault, legality of the original disposal or
ownership of the disposal site.
The Company expects that the nature of its businesses will continue to
subject the Company to increasingly stringent environmental and health and
safety laws and regulations. It is difficult to predict the future
interpretation and development of such laws and regulations or their impact on
future earnings and operations, but the Company anticipates that these
standards will continue to require increased capital expenditures and
operating costs. In particular, the ultimate effect of the Clean Air Act on
the Company's operations will depend on how the law is interpreted and
implemented pursuant to regulations that are currently being developed and on
additional factors such as the evolution of environmental control
technologies.
The Company's policy is to accrue costs relating to environmental matters
when it is probable that such costs will be required and the related costs can
be reasonably estimated. Estimated costs for future environmental compliance
and remediation or other costs are necessarily imprecise due to such factors
as the continuing evolution of environmental laws and regulatory requirements,
the availability and application of technology, the identification of
presently unknown remediation sites and the allocation of costs among the
responsible parties under applicable statutes. On a quarterly basis, the
Company evaluates the status of all significant existing or potential
environmental issues, develops or revises estimates of costs to satisfy known
remediation requirements (including those relating to "Superfund"
requirements) and adjusts its accruals accordingly; as of December 31, 1998,
the reserve was $48 million. Based upon information presently available, the
Company does not expect that such future costs will have a material adverse
effect on its competitive or financial position or its ongoing results of
operations. However, it is not possible to predict accurately the amount or
timing of costs of any future environmental remediation requirements. Such
costs could be material to future quarterly or annual results of operations.
MTBE
Pending or future legislative initiatives or litigation may materially
adversely affect the Company's MTBE sales or subject the Company to product
liability. The presence of MTBE in some water supplies in California and other
states due to gasoline leaking from underground storage tanks and in surface
water from recreational water craft has led to public concern that MTBE may
contaminate drinking water supplies, and thereby result in a possible health
risk. The Governor of California has announced an intention to eliminate MTBE
from gasoline sold in California by December 31, 2002. There have been claims
that MTBE travels more rapidly through soil, and is more soluble in water,
than most other gasoline components, and is more difficult and more costly to
remediate. Heightened public awareness about MTBE has resulted in certain
state and federal legislative initiatives that have sought either to rescind
the oxygenate requirement for reformulated gasoline sold in California and
other states or restrict the use of MTBE. There is ongoing review of this
issue and the ultimate resolution of the appropriateness of using MTBE could
result in a significant reduction in the Company's MTBE sales.
In addition, the Company has a take-or-pay MTBE sales contract with Atlantic
Richfield Company ("ARCO"), which contributes significant pre-tax margin. If
such legislative initiatives were enacted, ARCO has
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indicated that it might attempt to invoke a force majeure provision in the
ARCO contract in order to reduce the quantities of MTBE it purchases under, or
to terminate, the contract. The Company would vigorously dispute such action.
The contract has an initial term expiring December 31, 2002 and provides for
formula-based prices that are currently significantly above spot market prices
for MTBE. A significant reduction in the Company's sales under the ARCO
contract could have a negative impact on the Company's results of operations.
Foreign Operations, Country Risks and Exchange Rate Fluctuations
International operations and exports to foreign markets are subject to a
number of risks, including currency exchange rate fluctuations, trade
barriers, exchange controls, national and regional labor strikes, political
risks and risks of increases in duties and taxes, as well as changes in laws
and policies governing operations of foreign-based companies. Although the
Company uses various types of foreign currency forward, option and swap
contracts to reduce foreign exchange exposures with respect to revenues,
capital commitments and other expenses denominated in foreign currencies,
there can be no assurance that such hedging techniques will protect the
Company's reported results against such risks or that the Company will not
incur material losses on such contracts. In addition, earnings of foreign
subsidiaries and intercompany payments may be subject to foreign income tax
rules that may reduce cash flow available to meet required debt service and
other obligations of the Company.
A number of Asian and Latin American economies have experienced economic
difficulties in recent periods. Prolonged economic difficulties in the Asian
and Latin American markets could significantly impact worldwide demand and
thereby place downward pressure on margins, which, if material, could in turn
have an adverse effect on the business and operations of the Company.
Significant Fluctuations in Quarterly Results
The Company's quarterly results will vary significantly depending on various
factors, most of which are beyond the Company's control, including changes in
product prices, product demand, raw material costs or supply arrangements;
regional business activities, including a lower level of economic activity in
Europe during the summer; adverse developments in foreign markets;
fluctuations in shipments to customers; foreign exchange fluctuations;
unanticipated expenses; changes in interest rates; and the scheduling of plant
turnarounds.
Change of Control Related Provisions
Under the Company's credit facilities, a change in control of the Company is
an event of default, which would permit the lenders to declare the loans
thereunder immediately payable and to terminate future lending commitments.
Under the credit facilities, with certain exceptions, a change in control is
deemed to occur if any person or group acquires 20% or more of the Company's
common stock or there has generally been a change in a majority of the
Company's Board of Directors. The Company has adopted a stockholders' rights
plan. In addition, the Delaware General Corporation Law contains provisions
that impose restrictions on business combinations with interested parties and
the Company's By-Laws contain certain advance notice provisions. The
provisions of the credit facilities, the Delaware General Corporation Law, the
Company's stockholders' rights plan and the Company's By-Laws (as well as the
Put Rights described under "--High Leverage and Related Matters" above) may
have the effect of delaying, deferring or preventing a change in control of
the Company, which could prevent the Company's stockholders from receiving a
takeover premium for their shares of the Company's common stock.
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USE OF PROCEEDS
Except as otherwise described in any Prospectus Supplement, the net proceeds
from the sale of the Offered Securities will be used for general corporate
purposes, which may include, but are not limited to, repayment or refinancing
of indebtedness, working capital, capital expenditures, acquisitions and
repurchases or redemptions of debt or equity securities of Lyondell, and may
initially be invested in short-term securities.
Each Lyondell Trust will use all proceeds received from the sale of its
Trust Securities (as defined herein) to purchase Subordinated Debt Trust
Securities from the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a)................. 1.2x 4.6x 2.2x 6.8x 4.8x
Supplemental pro forma ratio of earnings to fixed
charges(b)........................................... 1.1x
</TABLE>
- --------
(a) The ratio of earnings to fixed charges has been calculated including
amounts for Lyondell and its proportionate share of amounts for Equistar
(57 percent through May 15, 1998 and 41 percent thereafter), LCR (58.75
percent for the year ended December 31, 1998, 86 percent for the first
quarter of 1997 and 58.49 percent for the remainder of 1997) and Lyondell
Methanol (75 percent for the year ended December 31 1998), for the periods
in which Lyondell accounted for its respective investment in each such
Joint Venture using the equity method of accounting. Lyondell remains
liable on approximately $713 million of debt for which primary
responsibility was assumed by Equistar in connection with its formation.
Fixed charges include interest expense plus capitalized interest and the
portion of rental expense that represents an interest factor.
(b) The supplemental pro forma ratio of earnings to fixed charges gives effect
to the acquisition of LCW and the debt issued by the Company pursuant to
the related credit facilities as if such transactions had occurred as of
January 1, 1998.
THE LYONDELL TRUSTS
Each of Lyondell Trust I, Lyondell Trust II and Lyondell Trust III is a
statutory business trust created on July 29, 1998, November 9, 1998 and
November 9, 1998, respectively, under the Delaware Business Trust Act (the
"Business Trust Act") pursuant to a separate declaration of trust among the
Trustees (as defined herein) of such Lyondell Trust and the Company and the
filing of a certificate of trust with the Secretary of State of the State of
Delaware. Such declaration will be amended and restated in its entirety (as so
amended and restated, the "Declaration") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part,
as of the date the Preferred Securities of such Lyondell Trust are initially
issued. Each Declaration will be qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and is
qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this
Prospectus is a part, and the Trust Indenture Act.
The principal office of each Lyondell Trust is c/o Lyondell Chemical
Company, 1221 McKinney Street, Suite 1600, Houston, Texas 77010. The telephone
number of each Lyondell Trust is (713) 652-7200.
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Preferred Securities
Upon issuance of any Preferred Securities by a Lyondell Trust, the holders
thereof will own all of the issued and outstanding Preferred Securities of
such Lyondell Trust. The Company will, directly or indirectly, acquire common
securities representing common undivided beneficial interests in the assets of
each Lyondell Trust (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") in an amount equal to 3% of the total
capital of such Lyondell Trust and will own, directly or indirectly, all of
the issued and outstanding Common Securities of each Lyondell Trust. The
Preferred Securities and the Common Securities will rank pari passu with each
other and will have equivalent terms; provided that (i) if a Declaration Event
of Default (as defined under "--Events of Default") under the Declaration of a
Lyondell Trust occurs and is continuing, the holders of Preferred Securities
of such Lyondell Trust will have a priority over holders of the Common
Securities of such Lyondell Trust with respect to payments in respect of
distributions and payments upon liquidation, redemption and maturity and (ii)
holders of Common Securities have the exclusive right (subject to the terms of
the applicable Declaration) to appoint, remove or replace the Trustees and to
increase or decrease the number of Trustees. Each Lyondell Trust exists for
the purposes of (a) issuing its Preferred Securities, (b) issuing its Common
Securities to the Company, (c) investing the gross proceeds from the sale of
its Trust Securities in Subordinated Debt Trust Securities of the Company and
(d) engaging in only such other activities as are necessary, convenient or
incidental thereto or are specifically authorized in its Declaration. The
rights of the holders of the Preferred Securities of a Lyondell Trust,
including economic rights, rights to information and voting rights, are set
forth in the applicable Declaration, the Business Trust Act and the Trust
Indenture Act.
Powers and Duties of Trustees
The number of trustees (the "Trustees") of each Lyondell Trust will
initially be five. Three of such Trustees (the "Regular Trustees") are
individuals who are employees or officers of the Company. The fourth such
Trustee will be The First National Bank of Chicago, which is unaffiliated with
the Company and which will serve as the property trustee (the "Property
Trustee") and act as the indenture trustee under the Declaration for purposes
of the Trust Indenture Act. The fifth such Trustee is First Chicago Delaware
Inc. which has its principal place of business in the State of Delaware (the
"Delaware Trustee"). Pursuant to each Declaration, legal title to the
Subordinated Debt Trust Securities purchased by a Lyondell Trust will be owned
by and held of record in the name of the Property Trustee in trust for the
benefit of the holders of the Trust Securities of such Lyondell Trust, and the
Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined under "Description of the
Subordinated Debt Trust Securities") with respect to such Subordinated Debt
Trust Securities. In addition, the Property Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments in respect of the Subordinated Debt Trust
Securities purchased by a Lyondell Trust for the benefit of the holders of its
Trust Securities. The Property Trustee will promptly make distributions to the
holders of the Trust Securities out of funds from the Property Account. The
Preferred Securities Guarantees are separately qualified under the Trust
Indenture Act and will be held by The First National Bank of Chicago (the
"Guarantee Trustee"), acting in its capacity as indenture trustee with respect
thereto, for the benefit of the holders of the applicable Preferred
Securities. As used in this Prospectus and any accompanying Prospectus
Supplement, the term "Property Trustee" with respect to a Lyondell Trust
refers to The First National Bank of Chicago acting either in its capacity as
a Trustee under the related Declaration and the holder of legal title to the
Subordinated Debt Trust Securities purchased by such Lyondell Trust or in its
capacity as the Guarantee Trustee under the applicable Preferred Securities
Guarantee, as the context may require. The Company, as the direct or indirect
owner of all of the Common Securities of each Lyondell Trust, will have the
exclusive right to appoint, remove or replace Trustees and to increase or
decrease the number of Trustees, provided that the number of Trustees shall
be, except under certain circumstances, at least five and the majority of
Trustees shall be Regular Trustees. The term of a Lyondell Trust will be set
forth in the Prospectus Supplement but may dissolve earlier as provided in the
applicable Declaration.
The duties and obligations of the Trustees of a Lyondell Trust will be
governed by the Declaration of such Lyondell Trust, the Business Trust Act and
the Trust Indenture Act. Under its Declaration, each Lyondell Trust will not,
and the Trustees will cause such Lyondell Trust not to, engage in any activity
other than in connection
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with the purposes of such Lyondell Trust or other than as required or
authorized by the related Declaration. In particular, each Lyondell Trust
shall not and the Trustees shall cause each Lyondell Trust not to (a) invest
any proceeds received by such Lyondell Trust from holding the Subordinated
Debt Trust Securities purchased by such Lyondell Trust but shall promptly
distribute from the Property Account all such proceeds to holders of its Trust
Securities pursuant to the terms of the related Declaration and of its Trust
Securities; (b) acquire any assets other than as expressly provided in the
related Declaration; (c) possess property of such Lyondell Trust for other
than a trust purpose; (d) make any loans, other than loans represented by the
Subordinated Debt Trust Securities; (e) possess any power or otherwise act in
such a way as to vary the assets of such Lyondell Trust or the terms of its
Trust Securities in any way whatsoever, except as expressly provided in the
related Declaration; (f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, such Lyondell Trust other than its
Trust Securities; (g) incur any indebtedness for borrowed money; (h) direct
the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee (as defined under "Description of the
Subordinated Debt Trust Securities") or exercising any trust or power
conferred upon the Indenture Trustee with respect to the Subordinated Debt
Trust Securities deposited in such Lyondell Trust as trust assets; (i) waive
any past default that is waivable under the Indenture; (j) exercise any right
to rescind or annul a declaration of acceleration of the maturity of the
principal of all of the Subordinated Debt Trust Securities deposited in such
Lyondell Trust as trust assets, without, in the case of clauses (h), (i) and
(j), obtaining the prior approval of the holders of a majority in liquidation
amount of all outstanding Trust Securities of such Lyondell Trust; (k) consent
to any amendment, modification or termination of the Indenture or the
Subordinated Debt Trust Securities deposited in such Lyondell Trust as trust
assets, unless in the case of this clause (k) the Property Trustee shall have
received an opinion of counsel experienced in such matters to the effect that
such amendment, modification or termination will not cause more than an
insubstantial risk that for United States federal income tax purposes such
Lyondell Trust will not be classified as a grantor trust; (l) take or consent
to any action that would result in the placement of a lien, pledge, charge,
mortgage or other encumbrance on any of the property of such Lyondell Trust;
(m) vary the investment (within the meaning of Treasury Regulation Section
301.7701-4(c)) of such Lyondell Trust or of the holders of its Trust
Securities; (n) after the issuance of its Preferred Securities, enter into any
contract or agreement (other than any depositary agreement or any agreement
with any securities exchange or automated quotation system) that does not
expressly provide that the holders of such Preferred Securities, in their
capacities as such, have limited liability (in accordance with the provisions
of the Business Trust Act) for the liabilities and obligations of such
Lyondell Trust or (o) revoke any action previously authorized or approved by a
vote of the holders of its Preferred Securities except by subsequent vote of
such holders.
Books and Records
The books and records of each Lyondell Trust will be maintained at the
principal office of such Lyondell Trust and will be open for inspection by a
holder of Preferred Securities of such Lyondell Trust or his authorized
representative for any purpose reasonably related to his interest in such
Lyondell Trust during normal business hours.
Voting
Holders of Preferred Securities generally will have limited voting rights,
relating only to the modification of the Preferred Securities and, under
certain circumstances, to the exercise of a Lyondell Trust's rights as holder
of the Subordinated Debt Trust Securities and the Preferred Securities
Guarantee. The holders of the Preferred Securities will not be able to
appoint, remove or replace, or to increase or decrease the number of Trustees,
which rights are vested exclusively in the Common Securities.
The Property Trustee
The Property Trustee, for the benefit of the holders of the Trust Securities
of a Lyondell Trust, is authorized under each Declaration to exercise all
rights under the Indenture with respect to the Subordinated Debt Trust
Securities deposited in such Lyondell Trust as trust assets, including its
rights as the holder of such Subordinated Debt Trust Securities to enforce the
Company's obligations under such Subordinated Debt Trust Securities upon
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<PAGE>
the occurrence of an Indenture Event of Default (as defined herein under
"Description of the Subordinated Debt Trust Securities--Indenture Events of
Default"). The Property Trustee shall also be authorized to enforce the rights
of holders of the Preferred Securities of a Lyondell Trust under the related
Preferred Securities Guarantee. If any Lyondell Trust's failure to make
distributions on the Preferred Securities of such Lyondell Trust is a
consequence of the Company's exercise of any right under the terms of the
Subordinated Debt Trust Securities deposited in such Lyondell Trust as trust
assets to extend the interest payment period for such Subordinated Debt
Trust Securities, the Property Trustee will have no right to enforce the
payment of distributions on such Preferred Securities until a Declaration
Event of Default shall have occurred. If a Declaration Event of Default has
occurred and is continuing, then the holders of at least a majority in
liquidation amount of the Preferred Securities of a Lyondell Trust will have
the right to direct the Property Trustee for such Lyondell Trust with respect
to certain matters under the related Declaration and the related Preferred
Securities Guarantee. If the Property Trustee fails to enforce its rights
under the applicable series of Subordinated Debt Trust Securities, any holder
of Preferred Securities, to the extent permitted by applicable law, may, after
a period of 30 days has elapsed from such Holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding directly
against the Company to enforce such rights. Notwithstanding the foregoing, if
an Event of Default under the applicable Declaration has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal, or premium, if any, on the applicable series of
Subordinated Debt Trust Securities on the date such interest, principal or
premium is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Preferred Securities of such Lyondell Trust may
directly institute a proceeding for enforcement of payment to such holder of
the principal of, or premium, if any, or interest on the applicable series of
Subordinated Debt Trust Securities having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder (a
"Holder Direct Action") on or after the respective due date specified in the
applicable series of Subordinated Debt Trust Securities. In connection with
such Holder Direct Action, the Company will be subrogated to the rights of
such holder of Preferred Securities under the applicable Declaration to the
extent of any payment made by the Company to such holder of Preferred
Securities in such Holder Direct Action. Except as expressly provided in the
preceding sentences or in the applicable Prospectus Supplement, the holders of
Preferred Securities of such Lyondell Trust will not be able to exercise
directly any other remedy available to the holders of the applicable series of
Subordinated Debt Trust Securities.
Distributions
Pursuant to each Declaration, distributions on the Preferred Securities of a
Lyondell Trust must be paid on the dates payable to the extent that the
Property Trustee for such Lyondell Trust has cash on hand in the applicable
Property Account to permit such payment. The funds available for distribution
to the holders of the Preferred Securities of a Lyondell Trust will be limited
to payments received by the Property Trustee in respect of the Subordinated
Debt Trust Securities that are deposited in such Lyondell Trust as trust
assets. If the Company does not make interest payments on the Subordinated
Debt Trust Securities deposited in a Lyondell Trust as trust assets, the
Property Trustee will not make distributions on the Preferred Securities of
such Lyondell Trust. Under each Declaration, if and to the extent the Company
does make interest payments on the Subordinated Debt Trust Securities
deposited in a Lyondell Trust as trust assets, the Property Trustee is
obligated to make distributions on the Trust Securities of such Lyondell Trust
on a Pro Rata Basis (as defined below). The payment of distributions on the
Preferred Securities of a Lyondell Trust is guaranteed by the Company as and
to the extent set forth under "Description of the Preferred Securities
Guarantees." A Preferred Securities Guarantee is a guarantee from the time of
issuance of the Preferred Securities, but the Preferred Securities Guarantee
covers distributions and other payments on the applicable Preferred Securities
only if and to the extent that the Company has made a payment to the Property
Trustee of interest or principal, or premium, if any, on the Subordinated Debt
Trust Securities deposited in a Lyondell Trust as trust assets. As used in
this Prospectus, the term "Pro Rata Basis" shall mean pro rata to each holder
of Trust Securities of a Lyondell Trust according to the aggregate liquidation
amount of the Trust Securities of such Lyondell Trust held by the relevant
holder in relation to the aggregate liquidation amount of all Trust Securities
of such Lyondell Trust outstanding unless, in relation to a payment, a
Declaration Event of Default under the related Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each holder of the Preferred Securities of
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such Lyondell Trust pro rata according to the aggregate liquidation amount of
the Preferred Securities held by the relevant holder in relation to the
aggregate liquidation amount of all the Preferred Securities of such Lyondell
Trust outstanding, and only after satisfaction of all amounts owed to the
holders of such Preferred Securities, to each holder of Common Securities of
such Lyondell Trust pro rata according to the aggregate liquidation amount of
such Common Securities held by the relevant holder in relation to the
aggregate liquidation amount of all Common Securities of such Lyondell Trust
outstanding.
Events of Default
If an Indenture Event of Default occurs and is continuing with respect to
the Subordinated Debt Trust Securities deposited in a Lyondell Trust as trust
assets, an Event of Default under the Declaration (a "Declaration Event of
Default") of such Lyondell Trust will occur and be continuing, with respect to
any outstanding Trust Securities of such Lyondell Trust. In such event, each
Declaration provides that the holders of Common Securities of such Lyondell
Trust will be deemed to have waived any such Declaration Event of Default with
respect to the Common Securities until all Declaration Events of Default with
respect to the Preferred Securities of such Lyondell Trust have been cured or
waived or otherwise eliminated. Until all such Declaration Events of Default
with respect to the Preferred Securities of such Lyondell Trust have been so
cured, waived or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the holders of the Preferred Securities of such
Lyondell Trust and only the holders of such Preferred Securities will have the
right to direct the Property Trustee with respect to certain matters under
such Declaration and consequently under the Indenture. In the event that any
Declaration Event of Default with respect to the Preferred Securities of such
Lyondell Trust is waived by the holders of the Preferred Securities of such
Lyondell Trust as provided in the Declaration, the holders of Common
Securities of such Lyondell Trust pursuant to such Declaration have agreed
that such waiver also constitutes a waiver of such Declaration Event of
Default with respect to such Common Securities for all purposes under the
Declaration without any further act, vote or consent of the holders of such
Common Securities. The Property Trustee shall notify each holder of Preferred
Securities of a Lyondell Trust of any notice of default with respect to the
related Subordinated Debt Trust Securities, unless such default has been cured
before the giving of such notice or the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers (as
that term is defined in the applicable Declaration) of the Property Trustee in
good faith determines that the withholding of such notice is in the interests
of the holders of the Trust Securities of such Lyondell Trust.
Record Holders
Each Declaration provides that the Trustees of such Lyondell Trust may treat
the person in whose name a certificate representing its Preferred Securities
is registered on the books and records of such Lyondell Trust as the sole
holder thereof and of the Preferred Securities represented thereby for
purposes of receiving distributions and for all other purposes and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such certificate or in the Preferred Securities represented
thereby on the part of any person, whether or not the Trustees of such
Lyondell Trust shall have actual or other notice thereof. Preferred Securities
will be issued in fully registered form. Unless otherwise specified in a
Prospectus Supplement, Preferred Securities will be represented by one or more
global certificates registered on the books and records of such Lyondell Trust
in the name of a depositary (the "Depositary") named in an accompanying
Prospectus Supplement or its nominee. Under each Declaration:
(i) such Lyondell Trust and the Trustees thereof shall be entitled to
deal with the Depositary (or any successor depositary) for all purposes,
including the payment of distributions and receiving approvals, votes or
consents under the related Declaration, and except as set forth in the
related Declaration with respect to the issuance of definitive certificates
representing the Preferred Securities, shall have no obligation to persons
owning a beneficial interest in Preferred Securities ("Preferred Security
Beneficial Owners") registered in the name of and held by the Depositary or
its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary (or any successor depositary) and
shall be limited to those established by law and agreements between such
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Preferred Security Beneficial Owners and the Depositary and/or its
participants. With respect to Preferred Securities registered in the name
of and held by the Depositary or its nominee, all notices and other
communications required under each Declaration shall be given to, and all
distributions on such Preferred Securities shall be given or made to, the
Depositary (or its successor).
The specific terms of the depositary arrangement with respect to the
Preferred Securities of a Lyondell Trust will be disclosed in the applicable
Prospectus Supplement.
Debts and Obligations
In each Declaration, the Company has agreed to pay all debts and obligations
(other than with respect to the related Trust Securities) and all costs and
expenses of the applicable Lyondell Trust, including the fees and expenses of
its Trustees and any taxes and all costs and expenses with respect thereto, to
which such Lyondell Trust may become subject, except for United States
withholding taxes. The foregoing obligations of the Company under each
Declaration are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against any Lyondell Trust or any other
person before proceeding against the Company. The Company shall be subrogated
to all rights of a Lyondell Trust in respect of any amounts paid to any
Creditor by the Company. The Company has agreed in each Declaration to execute
such additional agreements as may be necessary or desirable in order to give
full effect to the foregoing.
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DESCRIPTION OF THE PREFERRED SECURITIES
Pursuant to its Declaration, each Lyondell Trust may issue, upon
authorization of its Regular Trustees, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. Each Declaration will be qualified as an indenture under the
Trust Indenture Act. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be
set forth in the related Declaration or made part of such Declaration by the
Trust Indenture Act. Reference is made to the Prospectus Supplement relating
to the Preferred Securities of a Lyondell Trust for specific terms, including
(i) the specific designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such Lyondell Trust, (iii) the annual
distribution rate (or method of calculation thereof) for Preferred Securities
issued by such Lyondell Trust, the date or dates upon which such distributions
shall be payable and the record date or dates for the payment of such
distributions, (iv) whether distributions on the Preferred Securities issued
by such Lyondell Trust shall be cumulative, and, in the case of Preferred
Securities having such cumulative distribution rights, the date or dates or
method of determining the date or dates from which distributions on Preferred
Securities issued by such Lyondell Trust shall be cumulative, (v) the amount
or amounts which shall be paid out of the assets of such Lyondell Trust to the
holders of Preferred Securities of such Lyondell Trust upon voluntary or
involuntary dissolution, winding-up or termination of such Lyondell Trust,
(vi) the obligation or right, if any, of such Lyondell Trust to purchase or
redeem Preferred Securities issued by such Lyondell Trust and the price or
prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities issued by such Lyondell Trust shall
or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right, (vii) the voting rights, if any, of Preferred Securities
issued by such Lyondell Trust in addition to those required by law, including
the number of votes per Preferred Security and any requirement for the
approval by the holders of Preferred Securities or of Preferred Securities
issued by one or more Lyondell Trusts, or of both, as a condition to specified
actions or amendments to the Declaration of such Lyondell Trust, (viii) terms
for any conversion or exchange into other securities, (ix) the rights, if any,
to defer distributions on the Preferred Securities by extending the interest
payment period on the Subordinated Debt Trust Securities and (x) any other
relevant terms, rights, preferences, privileges, limitations or restrictions
of the Preferred Securities issued by such Lyondell Trust consistent with the
Declaration of such Lyondell Trust or with applicable law. All Preferred
Securities offered hereby will be guaranteed by the Company as and to the
extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of the Preferred Securities, each Lyondell
Trust will issue one series of Common Securities. The Declaration of each
Lyondell Trust authorizes the Regular Trustees of such Lyondell Trust to issue
on behalf of such Lyondell Trust one series of Common Securities having such
terms including distribution, redemption, voting or liquidation rights or such
restrictions as shall be set forth therein. The terms of the Common Securities
issued by a Lyondell Trust will be substantially identical to the terms of the
Preferred Securities issued by such Lyondell Trust and the Common Securities
will rank pari passu, and payments will be made thereon on a Pro Rata Basis
with the Preferred Securities except that if a Declaration Event of Default
occurs and is continuing, the rights of the holders of such Common Securities
to payment in respect of distributions and payments upon liquidation,
redemption and maturity will be subordinated to the rights of the holders of
such Preferred Securities. The Common Securities issued by a Lyondell Trust
will also carry the right to vote and to appoint, remove or replace any of the
Trustees of such Lyondell Trust. All of the Common Securities issued by a
Lyondell Trust will be directly or indirectly owned by the Company.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of the Preferred Securities Guarantees that
will be executed and delivered by the Company for the benefit of the holders
from time to time of Preferred Securities. Each Preferred Securities Guarantee
will be separately qualified under the Trust Indenture Act and will be held by
The First National Bank of Chicago, acting in its capacity as indenture
trustee with respect thereto, for the benefit of holders of the Preferred
Securities of the applicable Lyondell Trust. The terms of each Preferred
Securities Guarantee will be those set forth in such Preferred Securities
Guarantee and those made part of such Guarantee by the Trust Indenture Act.
This description summarizes the material terms of the Preferred Securities
Guarantees and is qualified in its entirety by reference to the form of
Preferred Securities Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act.
General
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a Lyondell
Trust, the Guarantee Payments (as defined herein) (without duplication of
amounts theretofore paid by such Lyondell Trust), as and when due, regardless
of any defense, right of set-off or counterclaim that such Lyondell Trust may
have or assert. The following payments or distributions with respect to
Preferred Securities issued by a Lyondell Trust to the extent not paid or made
by or on behalf of such Lyondell Trust will be subject to such Preferred
Securities Guarantee (without duplication): (i) any accumulated and unpaid
distributions on such Preferred Securities, and the redemption price,
including all accumulated and unpaid distributions to, but excluding, the date
of redemption, with respect to such Preferred Securities called for redemption
by such Lyondell Trust but if and only to the extent that in each case the
Company has made a payment to the related Property Trustee of interest or
principal, or premium, if any, on the Subordinated Debt Trust Securities
deposited in such Lyondell Trust as trust assets and (ii) upon a voluntary or
involuntary dissolution, winding-up or termination of such Lyondell Trust
(other than in connection with the distribution of Subordinated Debt Trust
Securities to the holders of such Preferred Securities in exchange for
Preferred Securities or the redemption of all of such Preferred Securities
upon the maturity or redemption of the Subordinated Debt Trust Securities),
the lesser of (a) the aggregate of the liquidation amount and all accumulated
and unpaid distributions on such Preferred Securities to the date of payment,
to the extent such Lyondell Trust has funds on hand legally available
therefor, and (b) the amount of assets of such Lyondell Trust remaining
available for distribution to holders of such Preferred Securities in
liquidation of such Lyondell Trust as required by applicable law (the
"Guarantee Payments"). The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to
the holders of such Preferred Securities or by causing the applicable Lyondell
Trust to pay such amounts to such holders.
The Preferred Securities Guarantee is a guarantee from the time of issuance
of the applicable Preferred Securities, but the Preferred Securities Guarantee
covers distributions and other payments on such Preferred Securities only if
and to the extent that the Company has made a payment to the Property Trustee
of interest or principal, or premium, if any, on the Subordinated Debt Trust
Securities deposited in the applicable Lyondell Trust as trust assets. If the
Company does not make interest or principal, or premium, if any, payments on
the Subordinated Debt Trust Securities deposited in the applicable Lyondell
Trust as trust assets, the Property Trustee will not make distributions on the
Preferred Securities of such Lyondell Trust and the Lyondell Trust will not
have funds available therefor.
The Company's obligations under the Declaration for each Lyondell Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by such Trust, the Subordinated Debt Trust Securities purchased by such
Lyondell Trust and the Indenture, in the aggregate, will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities issued by such Lyondell Trust.
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Certain Covenants of the Company
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the applicable Lyondell Trust
remain outstanding, the Company will not declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock (other than (a)
dividends or distributions in shares of, or options, warrants, rights to
subscribe for or purchase shares of, common stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(c) as a result of a reclassification of the Company's capital stock or the
exchange or the conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (d) the
payment of accrued dividends and the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or (e) purchases of the Company's common stock related to the issuance of the
Company's common stock or rights under any of the Company's benefit plans for
its directors, officers or employees, any of the Company's dividend
reinvestment plans or stock purchase plans, or any of the benefit plans of any
of the Company's affiliates for such affiliates' directors, officers or
employees) or make any guarantee payment with respect thereto, if at such time
(i) the Company shall be in default with respect to its Guarantee Payments or
other payment obligations under such Preferred Securities Guarantee, (ii)
there shall have occurred any Declaration Event of Default under the
applicable Declaration or (iii) the Company shall have given notice of its
election to defer payments of interest on the Subordinated Debt Trust
Securities by extending the interest payment period as provided in the terms
of the Subordinated Debt Trust Securities deposited in such Lyondell Trust as
trust assets and such period, or any extension thereof, is continuing. In
addition, so long as any Preferred Securities of a Lyondell Trust remain
outstanding, the Company has agreed (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities of such Lyondell Trust and
not to cause or permit such Common Securities to be transferred except to the
extent permitted by the applicable Declaration; provided that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of such Common Securities and (ii) to use reasonable efforts to
cause such Lyondell Trust to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Subordinated Debt Trust Securities to the holders of such
Preferred Securities as provided in the applicable Declaration.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities in any material respect (in which case no
consent will be required), each Preferred Securities Guarantee may be amended
only with the prior approval of the Company and the holders of not less than a
majority in liquidation amount of the outstanding Preferred Securities issued
by the applicable Lyondell Trust. The manner of obtaining any such approval of
holders of such Preferred Securities will be set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in a Preferred
Securities Guarantee shall bind the successors, assignees, receivers, trustees
and representatives of the Company and shall inure to the benefit of the
holders of the Preferred Securities of the applicable Lyondell Trust then
outstanding. Except in connection with a consolidation, merger or sale
involving the Company that is permitted under the Indenture, the Company may
not assign its obligations under any Preferred Securities Guarantee.
Termination of the Preferred Securities Guarantee
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable
Lyondell Trust (i) upon full payment of the redemption price of all Preferred
Securities of such Lyondell Trust, (ii) upon distribution of the Subordinated
Debt Trust Securities to the holders of the Trust Securities of such Lyondell
Trust in exchange for all of the Trust Securities issued by such Lyondell
Trust or (iii) upon full payment of the amounts payable in accordance with the
applicable Declaration upon liquidation of such Lyondell Trust.
Notwithstanding the foregoing, each Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities issued by the applicable Lyondell
Trust must restore payment of any sums paid with respect to such Preferred
Securities or under such Preferred Securities Guarantee.
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Status of the Preferred Securities Guarantee
The Company's obligation under each Preferred Securities Guarantee to make
the Guarantee Payments will constitute an unsecured obligation of the Company.
The ranking of the Company's obligation under a Preferred Securities Guarantee
will be set forth in the Prospectus Supplement. The Company's obligations
under each Preferred Securities Guarantee are effectively subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries and Joint Ventures, except to the extent that the Company is a
creditor of the subsidiaries and Joint Ventures and is recognized as such.
Each Declaration provides that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions, if any, and other
terms of the related Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment
and not merely of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under
the guarantee without first instituting a legal proceeding against any other
person or entity). Each Preferred Securities Guarantee will be deposited with
the Guarantee Trustee, as indenture trustee, to be held for the benefit of the
holders of the Preferred Securities issued by the applicable Lyondell Trust.
The Guarantee Trustee will have the right to enforce the Preferred Securities
Guarantee on behalf of the holders of the Preferred Securities issued by the
applicable Lyondell Trust. The holders of not less than a majority in
aggregate liquidation amount of the Preferred Securities issued by the
applicable Lyondell Trust will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the related Preferred Securities Guarantee or exercising
any trust or other power conferred upon the Guarantee Trustee under such
Preferred Securities Guarantee. If the Guarantee Trustee fails to enforce such
Preferred Securities Guarantee as above provided, any holder of Preferred
Securities issued by the applicable Lyondell Trust may institute a legal
proceeding directly against the Company to enforce its rights under such
Preferred Securities Guarantee without first instituting a legal proceeding
against the applicable Lyondell Trust, the Guarantee Trustee or any other
person or entity. Notwithstanding the foregoing, if the Company has failed to
make a Guarantee Payment, a holder of Preferred Securities may directly
institute a proceeding against the Company for enforcement of the applicable
Preferred Securities Guarantee for such payment without first instituting a
legal proceeding against the applicable Lyondell Trust, the Guarantee Trustee
or any other person or entity.
Miscellaneous
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each Preferred Securities Guarantee and as to any default in such
performance. The Company is required to file annually with the Guarantee
Trustee an officers' certificate as to the Company's compliance with all
conditions under each Preferred Securities Guarantee.
The Guarantee Trustee, prior to the occurrence of an event of default under
a Preferred Securities Guarantee and after the curing or waiving of all events
of default that may have occurred, will undertake to perform only such duties
as are specifically set forth in the applicable Preferred Securities
Guarantee, and no implied covenants will be read into such Preferred
Securities Guarantee. After a default with respect to a Preferred Securities
Guarantee has occurred, the Guarantee Trustee shall exercise such of the
rights and powers vested in it by such Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise thereof as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs. Subject to such provision, the Guarantee Trustee is under no
obligation to exercise any of the rights or powers vested in it by a Preferred
Securities Guarantee at the request or direction of any holder of the
applicable Preferred Securities unless it is offered reasonable security and
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
Governing Law
Each Preferred Securities Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
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DESCRIPTION OF THE SUBORDINATED DEBT TRUST SECURITIES
Subordinated Debt Trust Securities may be issued from time to time in one or
more series under an Indenture (the "Indenture") between the Company and The
First National Bank of Chicago, as trustee (the "Indenture Trustee"). The
Indenture will be qualified under the Trust Indenture Act. The form of the
Indenture has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. The following description summarizes the
material terms of the Indenture, and is qualified in its entirety by reference
to the Indenture and the Trust Indenture Act. Whenever particular provisions
or defined terms in the Indenture are referred to herein, such provisions or
defined terms are incorporated by reference herein. Section and article
references used herein are references to provisions of the Indenture.
General
The Subordinated Debt Trust Securities will be unsecured, subordinated
obligations of the Company. The Indenture does not limit the amount of
additional indebtedness the Company or any of its subsidiaries or Joint
Ventures may incur. Since the Company is a holding company, the Company's
rights and the rights of its creditors, including the holders of Subordinated
Debt Trust Securities, to participate in the assets of any subsidiary or Joint
Venture upon the latter's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's or Joint Venture's creditors, except to
the extent that the Company may itself be a creditor with recognized claims
against the subsidiary or Joint Venture.
The Indenture does not limit the aggregate principal amount of indebtedness
that may be issued thereunder and provides that Subordinated Debt Trust
Securities may be issued thereunder from time to time in one or more series.
The Subordinated Debt Trust Securities are issuable in one or more series
pursuant to an indenture supplemental to the Indenture.
In the event Subordinated Debt Trust Securities are issued to a Lyondell
Trust in connection with the issuance of Trust Securities by such Lyondell
Trust, such Subordinated Debt Trust Securities subsequently may be distributed
pro rata to the holders of such Trust Securities in connection with the
dissolution of such Lyondell Trust at the election of Lyondell or upon the
occurrence of certain events described in the Prospectus Supplement relating
to such Trust Securities. Only one series of Subordinated Debt Trust
Securities will be issued to each Lyondell Trust in connection with the
issuance of the Trust Securities by such Lyondell Trust.
Reference is made to the Prospectus Supplement which will accompany this
Prospectus for the following terms of the series of Subordinated Debt Trust
Securities being offered thereby (to the extent such terms are applicable to
the Subordinated Debt Trust Securities of such series): (i) the specific
designation of such Subordinated Debt Trust Securities, aggregate principal
amount, purchase price and premium, if any; (ii) any limit on the aggregate
principal amount of such Subordinated Debt Trust Securities; (iii) the date or
dates on which the principal of such Subordinated Debt Trust Securities is
payable and the right to shorten, extend or defer such date or dates; (iv) the
rate or rates at which such Subordinated Debt Trust Securities will bear
interest or the method of calculating such rate or rates, if any; (v) the date
or dates from which such interest shall accrue, the interest payment dates on
which such interest will be payable or the manner of determination of such
interest payment dates and the record dates for the determination of holders
to whom interest is payable on any such interest payment dates; (vi) the
right, if any, to extend or defer the interest payment periods and the
duration of such extension; (vii) the period or periods within which, the
price or prices at which, and the terms and conditions upon which, such
Subordinated Debt Trust Securities may be redeemed, in whole or in part, at
the option of the Company; (viii) the obligation, if any, of the Company to
redeem or purchase such Subordinated Debt Trust Securities pursuant to any
sinking fund or analogous provisions (including payments made in cash in
anticipation of future sinking fund obligations) or at the option of the
holder thereof and the period or periods for which, the price or prices at
which, the currency or currencies (including currency unit or units) in which
and the terms and conditions upon which, such Subordinated Debt Trust
Securities will be redeemed or purchased, in whole or part, pursuant to such
obligation; (ix) any exchangeability, conversion or prepayment provisions of
the Subordinated Debt Trust Securities; (x) any applicable United States
federal income tax consequences, including
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whether and under what circumstances the Company will pay additional amounts
on the Subordinated Debt Trust Securities held by a person who is not a U.S.
person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to redeem such
Subordinated Debt Trust Securities rather than pay such additional amounts;
(xi) the form of such Subordinated Debt Trust Securities; (xii) if other than
denominations of $25 or any integral multiple thereof, the denominations in
which such Subordinated Debt Trust Securities will be issuable; (xiii) any and
all other terms with respect to such series, including any modification of or
additions to the events of default or covenants provided for with respect to
such series, and any terms which may be required by or advisable under
applicable laws or regulations not inconsistent with the Indenture; (xiv)
whether such Subordinated Debt Trust Securities are issuable as a global
security, and in such case, the identity of the depositary; and (xv) the
definition of Senior Debt with respect to such series of Subordinated Debt
Trust Securities. (Section 2.01)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Subordinated Debt Trust Securities will be issued in United States dollars
in fully registered form without coupons in denominations of $25 or integral
multiples thereof. Subordinated Debt Trust Securities may be presented for
exchange and Subordinated Debt Trust Securities in registered form may be
presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Subordinated Debt Trust Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the Subordinated Debt Trust Securities.
Subordinated Debt Trust Securities may bear interest at a fixed rate or a
floating rate. Subordinated Debt Trust Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States federal income tax considerations applicable to any such
discounted Subordinated Debt Trust Securities or to certain Subordinated Debt
Trust Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes will be described in
the relevant Prospectus Supplement.
Certain Covenants of the Company Applicable to the Subordinated Debt Trust
Securities
If Subordinated Debt Trust Securities are issued to a Lyondell Trust in
connection with the issuance of Trust Securities by such Lyondell Trust, the
Company will covenant in a supplemental indenture that, so long as the
Preferred Securities issued by the applicable Lyondell Trust remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) as a result of a
reclassification of the Company's capital stock or the exchange or the
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (d) the payment of accrued
dividends and the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, or (e) purchases
of the Company's common stock related to the issuance of the Company's common
stock or rights under any of the Company's benefit plans for its directors,
officers, employees, or any of the Company's dividend reinvestment plans or
stock purchase plans, or any of the benefit plans of any of the Company's
affiliates for such affiliates' directors, officers or employees) or make any
guarantee payment with respect thereto, if at such time (i) the Company shall
be in default with respect to its Guarantee Payments or other payment
obligations under the related Preferred Securities Guarantee, (ii) there shall
have occurred any Indenture Event of Default with respect to the Subordinated
Debt Trust Securities deposited in such Lyondell Trust as trust assets or
(iii) the Company shall have given notice of its election to defer payments of
interest on the Subordinated Debt Trust Securities by extending the interest
payment period as provided in the terms of the Subordinated Debt Trust
Securities deposited in such Lyondell Trust as trust assets and such period,
or any extension thereof, is continuing. In addition, if Subordinated Debt
Trust Securities are issued to a Lyondell Trust in connection with the
issuance of Trust
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Securities by such Lyondell Trust, for so long as any Preferred Securities
issued by the applicable Lyondell Trust remain outstanding, the Company has
agreed (i) to remain the sole direct or indirect owner of all of the
outstanding Common Securities issued by the applicable Lyondell Trust and not
to cause or permit such Common Securities to be transferred except to the
extent permitted by the applicable Declaration; provided that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Securities issued by the applicable Lyondell Trust,
(ii) to comply fully with all of its obligations and agreements contained in
the related Declaration and (iii) to use reasonable efforts to cause the
applicable Lyondell Trust to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Subordinated Debt Trust Securities to holders of Preferred
Securities issued by the applicable Lyondell Trust as provided in the related
Declaration.
Subordination
The payment of principal of, premium, if any, and interest on the
Subordinated Debt Trust Securities will, to the extent and in the manner set
forth in the Indenture, be subordinated in right of payment to the prior
payment in full, in cash or cash equivalents, of all Senior Debt of the
Company whether outstanding on the date of this Prospectus or thereafter
incurred.
Upon any payment by the Company or distribution of assets of the Company to
creditors upon any liquidation, dissolution, winding up, receivership,
reorganization, assignment for the benefit of creditors, marshaling of assets
and liabilities or any bankruptcy, insolvency or similar proceedings of the
Company, the holders of all Senior Debt will first be entitled to receive
payment in full of all amounts due or to become due thereon before the holders
of the Subordinated Debt Trust Securities will be entitled to receive any
payment in respect of the principal of, premium, if any, or interest on the
Subordinated Debt Trust Securities.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Debt, or in the event that the maturity of any Senior Debt has been
accelerated because of a default, then, in either case, no payment shall be
made by the Company with respect to the principal (including redemption
payments) of or premium, if any, or interest on the Subordinated Debt Trust
Securities until such default shall have been cured or waived in writing or
shall have ceased to exist or such Senior Debt shall have been discharged or
paid in full.
In the event of the acceleration of the maturity of the Subordinated Debt
Trust Securities, then no payments shall be made by the Company with respect
to the principal (including redemption payments) of or premium, if any, or
interest on the Subordinated Debt Trust Securities until the holders of all
Senior Debt outstanding at the time of such acceleration shall receive payment
in full of such Senior Debt (including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Indenture Trustee or any holder of Subordinated Debt Trust
Securities when such payment is prohibited by the preceding paragraphs, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Debt or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of
such Senior Debt may have been issued, as their respective interests may
appear.
By reason of such subordination, in the event of insolvency of the Company,
funds that would otherwise be payable to holders of Subordinated Debt Trust
Securities will be paid to the holders of Senior Debt of the Company to the
extent necessary to pay such Debt in full, and the Company may be unable to
meet fully its obligations with respect to the Subordinated Debt Trust
Securities.
The definition of "Senior Debt" with respect to a series of Subordinated
Debt Trust Securities will be set forth in the Prospectus Supplement.
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Indenture Events of Default
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Indenture Event
of Default" with respect to each series of Subordinated Debt Trust Securities:
(a) failure for 30 days to pay interest on the Subordinated Debt Trust
Securities of such series when due; provided that a valid extension of the
interest payment period by the Company shall not constitute a default in
the payment of interest for this purpose;
(b) failure to pay principal of or premium, if any, on the Subordinated
Debt Trust Securities of such series when due whether at maturity, upon
redemption, by declaration or otherwise;
(c) failure for 30 days to pay any sinking fund or analogous fund payment
with respect to the Subordinated Debt Trust Securities of such series;
(d) failure duly to observe or perform, in any material respect, any
other covenant or agreement contained in the Indenture with respect to such
series for 90 days after written notice to the Company from the Indenture
Trustee or the holders of at least 25% in principal amount of the
outstanding Subordinated Debt Trust Securities of such series;
(e) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(f) any other Indenture Event of Default applicable to the Subordinated
Debt Trust Securities of such series. (Section 6.01)
In each and every such case, unless the principal of all the Subordinated
Debt Trust Securities of that series shall have already become due and
payable, either the Indenture Trustee or the holders of not less than 25% in
aggregate principal amount of the Subordinated Debt Trust Securities of that
series then outstanding, by notice in writing to the Company (and to the
Indenture Trustee if given by such holders), may declare the principal of all
the Subordinated Debt Trust Securities of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, subject to the subordination provisions of the
Indenture. (Section 6.01)
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debt Trust Securities of that series have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee. (Section 6.06) The Indenture Trustee or the holders
of not less than 25% in aggregate outstanding principal amount of the
Subordinated Debt Trust Securities of that series may declare the principal
due and payable immediately upon an Indenture Event of Default with respect to
such series, but the holders of a majority in aggregate outstanding principal
amount of Subordinated Debt Trust Securities of such series may annul and
rescind such declaration and waive the default if the default has been cured
and a sum sufficient to pay all matured installments of interest and principal
otherwise than by acceleration and any premium has been deposited with the
Indenture Trustee. (Sections 6.01 and 6.06)
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debt Trust Securities of that series may, on behalf of the
holders of all the Subordinated Debt Trust Securities of that series, waive
any past default, except a default in the payment of principal, premium, if
any, or interest (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Indenture Trustee) or
a call for redemption of the Subordinated Debt Trust Securities of that
series. (Section 6.06) The Company is required to file annually with the
Indenture Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants under the Indenture. (Section
5.03)
If Subordinated Debt Trust Securities are issued to a Lyondell Trust in
connection with the issuance of Trust Securities of such Lyondell Trust, then
under the applicable Declaration an Indenture Event of Default with respect to
such series of Subordinated Debt Trust Securities will constitute a
Declaration Event of Default.
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Modification of the Indenture
From time to time the Company and the Indenture Trustee may, without the
consent of the holders of Subordinated Debt Trust Securities, amend the
Indenture or indentures supplemental thereto for one or more of the following
purposes: (a) to evidence the succession of another corporation or other
entity to the Company under the Indenture and the Subordinated Debt Trust
Securities and the assumption by such successor corporation or other entity of
the obligations of the Company thereunder; (b) to add further covenants,
restrictions, conditions or provisions for the protection of the holders of
Subordinated Debt Trust Securities; (c) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent with any other
provision; (d) to add to, change or eliminate any of the provisions of the
Indenture, provided that any such addition, change or elimination shall become
effective only after there are no such Subordinated Debt Trust Securities of
any series entitled to the benefit of such provision outstanding; (e) to
provide for the issuance of Subordinated Debt Trust Securities in coupon form;
(f) to evidence and provide for the acceptance of a successor trustee; (g) to
qualify or maintain the qualification of the Indenture under the Trust
Indenture Act; (h) to establish the form or terms of a series of Subordinated
Debt Trust Securities; and (i) to make any addition, change or elimination of
any provision of the Indenture that does not adversely affect the rights of
any holder of Subordinated Debt Trust Securities in any material respect.
(Section 9.01)
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Subordinated Debt Trust Securities of each
series affected by such modification, to modify the Indenture or any
supplemental indenture affecting the rights of the holders of such
Subordinated Debt Trust Securities; provided that no such modification may,
without the consent of the holder of each outstanding Subordinated Debt Trust
Security affected thereby, (i) extend the fixed maturity of the Subordinated
Debt Trust Securities of any series, reduce the principal amount thereof,
reduce the rate or extend the time of payment of interest thereon, reduce any
premium payable upon the redemption thereof or (ii) reduce the percentage of
Subordinated Debt Trust Securities, the holders of which are required to
consent to any such modification. (Section 9.02)
Book-Entry and Settlement
If any Subordinated Debt Trust Securities of a series are represented by one
or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Subordinated Debt Trust Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of and any premium and interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Subordinated Debt Trust Securities to be represented by a
Global Security will be described in the applicable Prospectus Supplement.
Consolidation, Merger and Sale
The Indenture will provide that the Company may not consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person and may not permit any
person to merge into or consolidate with the Company unless (i) either the
Company will be the resulting or surviving entity or any successor or
purchaser is a corporation, limited liability company, partnership or trust
organized under the laws of the United States of America, any State or the
District of Columbia, and any such successor or purchaser expressly assumes
the Company's obligations under the Subordinated Debt Trust Securities and the
Indenture and (ii) immediately after giving effect to the transaction no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default shall have occurred and be continuing. (Section
10.01)
23
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Defeasance and Discharge
Under the terms of the Indenture, the Company will be discharged from any
and all obligations in respect of a series of the Subordinated Debt Trust
Securities (except in each case for certain obligations to register the
transfer or exchange of such Subordinated Debt Trust Securities, replace
stolen, lost or mutilated Subordinated Debt Trust Securities of such series,
maintain paying agencies and hold moneys for payment in trust) if (i) the
Company irrevocably deposits with the Indenture Trustee cash or U.S.
Government Obligations or a combination thereof, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of, premium, if any, and interest on all outstanding Subordinated
Debt Trust Securities of such series; (ii) such deposit will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; (iii) the
Company delivers to the Indenture Trustee an opinion of counsel to the effect
that the holders of the Subordinated Debt Trust Securities of such series will
not recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance and discharge and that such defeasance
and discharge will not otherwise alter holders' United States federal income
tax treatment of principal, premium and interest payments on such Subordinated
Debt Trust Securities of such series (such opinion must be based on a ruling
of the Internal Revenue Service or a change in United States federal income
tax law occurring after the date of the Indenture, since such a result would
not occur under current tax law); (iv) the Company has delivered to the
Indenture Trustee an officers' certificate and an opinion of counsel, each
stating that all conditions precedent provided for relating to the defeasance
and discharge contemplated by such provision have been complied with; and (v)
no event or condition shall exist that, pursuant to the applicable
subordination provisions, would prevent the Company from making payments of
principal of, premium, if any, and interest on the Subordinated Debt Trust
Securities at the date of the irrevocable deposit referred to above. (Section
11.01)
Governing Law
The Indenture and the Subordinated Debt Trust Securities will be governed by
the laws of the State of New York. (Section 13.05)
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to the occurrence of an Indenture Event of
Default and after the curing of all Indenture Events of Default, undertakes to
perform only such duties as are specifically set forth in the Indenture and,
after an Indenture Event of Default has occurred (which has not been cured or
waived), shall exercise such of the rights and powers vested in it by the
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs. (Section 7.01) Subject to such provision, the
Indenture Trustee is under no obligation to exercise any of the powers vested
in it by the Indenture at the request of any holder of Subordinated Debt Trust
Securities, unless offered reasonable security or indemnity by such holder
against the costs, expenses and liabilities that might be incurred thereby.
(Section 7.02) The Indenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of
its duties or in the exercise of any of its rights or powers if there is
reasonable ground for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of the Indenture or adequate
indemnity against such risk is not reasonably assured to it. (Section 7.01)
The Company and its subsidiaries and Joint Ventures maintain ordinary
banking and trust relationships with the Indenture Trustee and its affiliates.
Miscellaneous
The Company will have the right at all times to assign any of its rights or
obligations under the Indenture to a subsidiary or an affiliate; provided
that, in the event of any such assignment, the Company will remain jointly and
severally liable for all such obligations. Subject to the foregoing, the
Indenture will be binding upon and inure to the benefit of the parties thereto
and their respective successors and assigns. The Indenture provides that it
may not otherwise be assigned by the parties thereto other than by the Company
to a successor or purchaser pursuant to a consolidation, merger, sale or
conveyance permitted by the Indenture. (Section 13.11)
24
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell any series of Subordinated Debt Trust Securities and
each Lyondell Trust may sell its Preferred Securities being offered hereby in
any of three ways (or in any combination thereof): (i) through underwriters or
dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement with respect to
any Offered Securities will set forth the terms of the offering of such
Offered Securities, including the name or names of any underwriters, dealers
or agents and the respective amounts of such Offered Securities underwritten
or purchased by each of them, the initial public offering price of such
Offered Securities and the proceeds to the Company or the applicable Lyondell
Trust, as the case may be, from such sale, any discounts, commissions or other
items constituting compensation from the Company or the applicable Lyondell
Trust, as the case may be, and any discounts, commissions or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
such Offered Securities may be listed. Any public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale of any Offered Securities, such Offered
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. Such Offered Securities may be either offered to the
public through underwriting syndicates represented by managing underwriters,
or directly by underwriters. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase such Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all of such Offered Securities if
any are purchased.
Offered Securities may be sold directly by the Company or a Lyondell Trust,
as the case may be, or through agents designated by the Company or such
Lyondell Trust, as the case may be, from time to time. Any agent involved in
the offer or sale of Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company or the
applicable Lyondell Trust, as the case may be, 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 or the applicable
Lyondell Trust, as the case may be, will authorize underwriters, dealers or
agents to solicit offers by certain purchasers to purchase Offered Securities
from the Company or the applicable Lyondell Trust, as the case may be, 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 and the applicable Lyondell Trust to indemnification by the
Company and the applicable Lyondell Trust 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, the applicable
Lyondell Trust and/or any of their affiliates in the ordinary course of
business.
Certain persons participating in the offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Offered
Securities. In connection with the offering, the underwriters or agents, as
the case may be, may purchase and sell the Offered Securities in the open
market. These transactions may include overallotment and stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of certain bids
or purchases for the purpose of preventing or retarding a decline in the
market price of the Offered Securities; and syndicate short positions involve
the sale by the underwriters or agents, as the case may be, of a greater
number of Offered Securities than they are required to purchase from the
Company or the applicable Lyondell Trust, as the case may be, in the offering.
The
25
<PAGE>
underwriters may also impose a penalty bid, whereby selling concessions
allowed to syndicate members or other broker-dealers for the Offered
Securities sold for their account may be reclaimed by the syndicate if such
Offered Securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Offered Securities, which may be higher than the price
that might otherwise prevail in the open market, and, if commenced, may be
discontinued at any time. These transactions may be effected on the New York
Stock Exchange, in the over-the-counter market or otherwise. For a description
of these activities, see "Plan of Distribution" or "Underwriting" in the
relevant Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, the Company does
not intend to list any of the Offered Securities on a national securities
exchange. No assurances can be given that there will be a market for the
Offered Securities.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the validity of the Preferred Securities,
the enforceability of the applicable Declaration and the formation of the
Lyondell Trusts will be passed upon by Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to the Lyondell Trusts and the
Company. The validity of the applicable Preferred Securities Guarantee and the
Subordinated Debt Trust Securities offered hereby will be passed upon for the
Company by Baker & Botts, L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of Lyondell Chemical Company as of
December 31, 1998 and 1997 and for each of the three years in the period ended
December 31, 1998 incorporated in this prospectus by reference to Lyondell
Chemical Company's Annual Report on Form 10-K for the year ended December 31,
1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Equistar Chemicals, LP as of December 31, 1998
and 1997 and for the year ended December 31, 1998 and the period from December
1, 1997 (inception) to December 31, 1997 incorporated in this prospectus by
reference to Lyondell Chemical Company's Annual Report on Form 10-K for the
year ended December 31, 1998 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The financial statements of LYONDELL-CITGO Refining LP as of December 31,
1998 and for the year then ended incorporated in this prospectus by reference
from the Annual Report on Form 10-K of Lyondell Chemical Company for the year
ended December 31, 1998 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
The financial statements of LYONDELL-CITGO Refining LP as of December 31,
1997 and for each of the two years in the period ended December 31, 1997
incorporated in this prospectus by reference to Lyondell Chemical Company's
Annual Report on Form 10-K for the year ended December 31, 1998 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
26
<PAGE>
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"), which can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549;
and at the regional offices of the Commission at 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 at prescribed rates. Information concerning the
operation of the public reference facilities may be obtained by calling 1-800-
SEC-0330. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission (http://www.sec.gov). The
Company's common stock is listed on the New York Stock Exchange, and such
material also can be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
This Prospectus, which constitutes part of a registration statement on Form
S-3 (the "Registration Statement") filed by the Company and the Lyondell
Trusts with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), omits certain of the information contained in the
Registration Statement. Reference is hereby made to the Registration Statement
and the exhibits thereto, which may be obtained at the public reference
facilities maintained by the Commission as described in the preceding
paragraph, for further information with respect to the Company and the
Securities offered hereby. Statements contained herein concerning the
provisions of such documents are necessarily summaries of such documents, and
each such statement is qualified in its entirety by reference to the copy of
the applicable document filed with the Commission.
No separate financial statements of any Lyondell Trust have been included
herein. The Company and the Lyondell Trusts do not consider that such
financial statements would be material to holders of the Preferred Securities
because each Lyondell Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the
Subordinated Debt Trust Securities and issuing the Trust Securities.
Furthermore, taken together, the Company's obligations under the Subordinated
Debt Trust Securities, the Indenture, the Declarations and the Preferred
Securities Guarantees provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due on
the Preferred Securities. See "The Lyondell Trusts," "Description of the
Preferred Securities," "Description of the Preferred Securities Guarantees"
and "Description of the Subordinated Debt Trust Securities." In addition, the
Company does not expect that the Lyondell Trusts will be filing reports under
the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which the Company has filed with the Commission
pursuant to the Exchange Act (File No. 1-10145), are incorporated in this
Prospectus by reference and shall be deemed to be a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) The description of the common stock, par value $1.00 per share, of
the Company contained in the Company's Registration Statement on Form 8-A
dated December 16, 1988, as such Registration Statement may be amended from
time to time for the purpose of updating, changing or modifying such
description; and
(c) The description of the Rights to Purchase Common Stock contained in
the Company's Registration Statement on Form 8-A dated December 12, 1995,
as such Registration Statement may be amended from time to time for the
purpose of updating, changing or modifying such description.
27
<PAGE>
All documents filed by the Company and/or the Lyondell Trusts with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering made hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such document.
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 that also is or is deemed
to be incorporated by reference herein 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.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, a copy of any or
all documents that have been incorporated herein by reference (not including
exhibits to the documents that have been incorporated herein by reference
unless such exhibits are specifically incorporated by reference in the
documents this Prospectus incorporates). Requests should be directed to
Corporate Secretary, Lyondell Chemical Company, 1221 McKinney, Houston, Texas
77010 (telephone: (713) 652-7200).
28
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses payable by the Company
in connection with the offering described in this Registration Statement.
<TABLE>
<S> <C>
Registration fee.............................................. $1,180,000
Printing expenses............................................. 300,000
Accounting fees and expenses.................................. 500,000
Legal fees and expenses....................................... 500,000
Trustee fees and expenses..................................... 200,000
Rating agency fees............................................ 200,000
Miscellaneous................................................. 120,000
----------
Total..................................................... $3,000,000
==========
</TABLE>
ITEM 15. Indemnification of Directors and Officers
By-Law Provisions.
The Company's By-Laws provide that the Company will indemnify each of its
officers and directors to the fullest extent authorized by Section 145 of the
General Corporation Law of the State of Delaware. Article V of the By-Laws
reads as follows:
(a) Indemnification of Officers and Directors. The Company shall
indemnify the officers and directors of the Company with respect to all
matters to which Section 145 of the General Corporation Law of the State of
Delaware may in any way relate, to the fullest extent permitted or allowed
by the laws of the State of Delaware, whether or not specifically required,
permitted or allowed by said Section 145. 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 that may have previously
arisen hereunder.
(b) 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.
(c) 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.
(d) Indemnity Agreements. The Company may from time to time enter into
indemnity agreements with the persons who are members of its Board of
Directors, its elected officers and with such other persons as the Board
may designate, the form of such indemnity agreements to be approved by a
majority of the Board of Directors then in office.
(e) 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 payment by the Company
of 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 Article V.
II-1
<PAGE>
Delaware General Corporation Law Provisions.
Section 145 of the General Corporation Law of the State of Delaware
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
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 present or former director or officer 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, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person 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 present or former 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, with respect to a person who is a director or
officer at the time of such determination, (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) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) 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 such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers and other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
II-2
<PAGE>
(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 such person's 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 such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not
the corporation would have the power to indemnify such person 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 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 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 such
person 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 an 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 such person 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).
Certificate of Incorporation Provisions.
The Company's Certificate of Incorporation limits the personal liability of
directors to the Company and its stockholders for monetary damages resulting
from certain breaches of the directors' fiduciary duties. Article VII of the
Certificate of Incorporation provides as follows:
To the fullest extent permitted by the General Corporation Law of
Delaware as the same exists or may hereafter be amended, a director of the
Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. If the General
Corporation Law of Delaware is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then
the liability of a director of the Company shall be eliminated or limited
to the fullest extent permitted by the General Corporation Law of Delaware,
as so amended. Any repeal or modification of this Article VII by the
stockholders of the Company shall not adversely affect any right or
protection of a director of the
II-3
<PAGE>
Company existing at the time of such repeal or modification or with respect
to events occurring prior to such time. Notwithstanding anything contained
in this Certificate to the contrary, the affirmative vote of the holders of
not less than 66 2/3 percent of all votes entitled to be cast by the
holders of stock of the Company shall be required to amend or repeal this
Article VII or to adopt any provision inconsistent herewith.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a corporation's Certificate of Incorporation may contain the
following:
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall
not eliminate or limit the liability of a director: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders; (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) under section 174 of this
title; or (iv) for any transaction from which the director derived an
improper personal benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date
when such provision becomes effective. All references in this paragraph to
a director shall also be deemed to refer (x) to a member of the governing
body of a corporation which is not authorized to issue capital stock, and
(y) to such other person or persons, if any, who, pursuant to a provision
of the certificate of incorporation in accordance with section 141(a) of
this title, exercise or perform any of the powers or duties otherwise
conferred or imposed upon the board of directors by this title.
ITEM 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- -------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement (Debt Securities)
*1.2 Form of Underwriting Agreement (Common Stock and Preferred Stock)
*1.3 Form of Underwriting Agreement (Preferred Securities)
4.1 Form of Senior Debt Securities Indenture of the Company
4.2 Form of Subordinated Debt Securities Indenture of the Company
4.3 Form of Subordinated Debt Trust Securities Indenture between the
Company and The First National Bank of Chicago
**4.4.1 Declaration of Trust of Lyondell Trust I
4.4.2 Declaration of Trust of Lyondell Trust II
4.4.3 Declaration of Trust of Lyondell Trust III
4.5.1 Form of Amended and Restated Declaration of Trust of Lyondell Trust
I
4.5.2 Form of Amended and Restated Declaration of Trust of Lyondell Trust
II
4.5.3 Form of Amended and Restated Declaration of Trust of Lyondell Trust
III
**4.6.1 Certificate of Trust of Lyondell Trust I
4.6.2 Certificate of Trust of Lyondell Trust II
4.6.3 Certificate of Trust of Lyondell Trust III
4.7 Form of Preferred Security (included in Exhibits 4.5.1, 4.5.2 and
4.5.3)
*4.8 Form of Supplemental Indenture to Subordinated Debt Trust
Securities Indenture to be used in connection with the issuance of
Subordinated Debt Trust Securities relating to Preferred Securities
*4.9 Form of Subordinated Debt Trust Security (included in Exhibit 4.8)
4.10 Form of Preferred Securities Guarantee with respect to Preferred
Securities
*4.11 Form of Senior Debt Security
*4.12 Form of Subordinated Debt Security
***4.14 Amended and Restated Certificate of Incorporation of the Company
(filed as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 and incorporated herein by
reference)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- -------------------------------------------------------------------
<C> <S>
***4.15 Amended and Restated By-Laws of the Company (filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997 and incorporated herein by reference)
5.1 Opinion of Baker & Botts, L.L.P.
5.2.1 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust I
5.2.2 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust II
5.2.3 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust III
*8 Opinion of counsel to the Company as to certain tax matters
relative to the Securities offered hereby
**12.1 Statement re Computation of Ratios
23.1.1 Consent of PricewaterhouseCoopers LLP
23.1.2 Consent of Deloitte & Touche LLP
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibits
5.2.1, 5.2.2 and 5.2.3)
**24.1 Powers of Attorney for the Company
**24.2.1 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust I (included in
Exhibit 4.4.1)
24.2.2 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust II (included in
Exhibit 4.4.2)
24.2.3 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust III (included in
Exhibit 4.4.3)
*25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Senior Trustee under the Senior Debt Securities
Indenture
*25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Subordinated Trustee under the Subordinated Debt
Securities Indenture
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago as Trustee under (i)
the Subordinated Debt Trust Securities Indenture, (ii) the
Preferred Securities Guarantee of the Company with respect to the
Preferred Securities of Lyondell Trust I, (iii) the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of Lyondell Trust II and (iv) the Preferred Securities
Guarantee of the Company with respect to the Preferred Securities
of Lyondell Trust III
25.4.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended
and Restated Declaration of Trust of Lyondell Trust I
25.4.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended
and Restated Declaration of Trust of Lyondell Trust II
25.4.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended
and Restated Declaration of Trust of Lyondell Trust III
</TABLE>
- --------
* The Company will file as an exhibit to a Current Report on Form 8-K (i) any
underwriting agreement relating to Securities offered hereby, (ii) the
instruments setting forth the terms of any Debt Securities, (iii) any
required opinion of counsel to the Company as to certain tax matters
relative to Securities offered hereby or (iv) any Statement of Eligibility
and Qualification under the Trust Indenture Act of 1939 of the applicable
trustee.
** Previously filed.
*** Incorporated by reference.
II-5
<PAGE>
ITEM 17. Undertakings
(a) The undersigned registrants hereby undertake:
(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;
(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) of the Securities Act 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;
(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 (a)(1)(i) and (a)(1)(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 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 registrants will, unless
in the opinion of its 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 Act
and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
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 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, the State of Texas, on
March 31, 1999.
LYONDELL CHEMICAL COMPANY
/s/ Dan F. Smith
By: _________________________________
Dan F. Smith
President and Chief Executive
Officer
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AND ON MARCH 31, 1999.
Signature Title
William T. Butler* Chairman of the Board
- -----------------------------------
(William T. Butler)
President, Chief Executive
/s/ Dan F. Smith Officer and Director
- -----------------------------------
(Dan F. Smith, Principal Executive
Officer)
Travis Engen* Director
- -----------------------------------
(Travis Engen)
Stephen F. Hinchliffe, Jr.* Director
- -----------------------------------
(Stephen F. Hinchliffe, Jr.)
Dudley C. Mecum II* Director
- -----------------------------------
(Dudley C. Mecum II)
Paul R. Staley* Director
- -----------------------------------
(Paul R. Staley)
Vice President,
/s/ Edward W. Rich Finance and
- ----------------------------------- Treasurer
(Edward W. Rich, Principal
Financial Officer)
Vice President and
/s/ Van Billet Controller
- -----------------------------------
(Van Billet, Principal Accounting
Officer)
/s/ Jeffrey R. Pendergraft
*By: ______________________________
Jeffrey R. Pendergraft
as Attorney-in-fact
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell Trust I
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 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on March
31, 1999.
LYONDELL TRUST I
By: Lyondell Chemical Company, as
Sponsor
/s/ Jeffrey R. Pendergraft
By:_____________________________
Name: Jeffrey R. Pendergraft
Title:Executive Vice President and
Chief
Administrative Officer
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell Trust
II 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 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on March
31, 1999.
LYONDELL TRUST II
By: Lyondell Chemical Company, as
Sponsor
/s/ Jeffrey R. Pendergraft
By:_____________________________
Name: Jeffrey R. Pendergraft
Title:Executive Vice President and
Chief
Administrative Officer
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell Trust
III 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 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on March
31, 1999.
LYONDELL TRUST III
By: Lyondell Chemical Company, as
Sponsor
/s/ Jeffrey R. Pendergraft
By:_____________________________
Name: Jeffrey R. Pendergraft
Title:Executive Vice President and
Chief
Administrative Officer
II-10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- -------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement (Debt Securities)
*1.2 Form of Underwriting Agreement (Common Stock and Preferred Stock)
*1.3 Form of Underwriting Agreement (Preferred Securities)
4.1 Form of Senior Debt Securities Indenture of the Company
4.2 Form of Subordinated Debt Securities Indenture of the Company
4.3 Form of Subordinated Debt Trust Securities Indenture between the
Company and The First National Bank of Chicago
**4.4.1 Declaration of Trust of Lyondell Trust I
4.4.2 Declaration of Trust of Lyondell Trust II
4.4.3 Declaration of Trust of Lyondell Trust III
4.5.1 Form of Amended and Restated Declaration of Trust of Lyondell Trust
I
4.5.2 Form of Amended and Restated Declaration of Trust of Lyondell Trust
II
4.5.3 Form of Amended and Restated Declaration of Trust of Lyondell Trust
III
**4.6.1 Certificate of Trust of Lyondell Trust I
4.6.2 Certificate of Trust of Lyondell Trust II
4.6.3 Certificate of Trust of Lyondell Trust III
4.7 Form of Preferred Security (included in Exhibits 4.5.1, 4.5.2 and
4.5.3)
*4.8 Form of Supplemental Indenture to Subordinated Debt Trust
Securities Indenture to be used in connection with the issuance of
Subordinated Debt Trust Securities relating to Preferred Securities
*4.9 Form of Subordinated Debt Trust Security (included in Exhibit 4.8)
4.10 Form of Preferred Securities Guarantee with respect to Preferred
Securities
*4.11 Form of Senior Debt Security
*4.12 Form of Subordinated Debt Security
***4.14 Amended and Restated Certificate of Incorporation of the Company
(filed as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 and incorporated herein by
reference)
***4.15 Amended and Restated By-Laws of the Company (filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997 and incorporated herein by reference)
5.1 Opinion of Baker & Botts, L.L.P.
5.2.1 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust I
5.2.2 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust II
5.2.3 Opinion of Richards, Layton & Finger, P.A. relating to Lyondell
Trust III
*8 Opinion of counsel to the Company as to certain tax matters
relative to the Securities offered hereby
**12.1 Statement re Computation of Ratios
23.1.1 Consent of PricewaterhouseCoopers LLP
23.1.2 Consent of Deloitte & Touche LLP
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in Exhibits
5.2.1, 5.2.2 and 5.2.3)
**24.1 Powers of Attorney for the Company
**24.2.1 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust I (included in
Exhibit 4.4.1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- --------------------------------------------------------------------
<C> <S>
24.2.2 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust II (included in
Exhibit 4.4.2)
24.2.3 Powers of Attorney for the Company as sponsor, to sign the
Registration Statement on behalf of Lyondell Trust III (included in
Exhibit 4.4.3)
*25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Senior Trustee under the Senior Debt Securities
Indenture
*25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Subordinated Trustee under the Subordinated Debt
Securities Indenture
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago as Trustee under (i)
the Subordinated Debt Trust Securities Indenture, (ii) the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of Lyondell Trust I, (iii) the Preferred Securities
Guarantee of the Company with respect to the Preferred Securities of
Lyondell Trust II and (iv) the Preferred Securities Guarantee of the
Company with respect to the Preferred Securities of Lyondell Trust
III
25.4.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended and
Restated Declaration of Trust of Lyondell Trust I
25.4.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended and
Restated Declaration of Trust of Lyondell Trust II
25.4.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago under the Amended and
Restated Declaration of Trust of Lyondell Trust III
</TABLE>
- --------
* The Company will file as an exhibit to a Current Report on Form 8-K (i) any
underwriting agreement relating to Securities offered hereby, (ii) the
instruments setting forth the terms of any Debt Securities, (iii) any
required opinion of counsel to the Company as to certain tax matters
relative to Securities offered hereby or (iv) any Statement of Eligibility
and Qualification under the Trust Indenture Act of 1939 of the applicable
trustee.
** Previously filed.
*** Incorporated by reference.
<PAGE>
Exhibit 4.1
[FORM OF SENIOR DEBT INDENTURE]
================================================================================
LYONDELL CHEMICAL COMPANY
as Issuer
and
[NAME OF TRUSTEE]
as Trustee
--------------------
Indenture
Dated as of ___________ __, ____
--------------------
Debt Securities
================================================================================
<PAGE>
LYONDELL CHEMICAL COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ___________ __, ____
--------------------
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
- --------------- --------------
(S) 310 (a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(a)(5)................................................ 7.10
(b)................................................... 7.08, 7.10
(S) 311 (a)................................................... 7.11
(b)................................................... 7.11
(c)................................................... Not Applicable
(S) 312 (a)................................................... 2.07
(b)................................................... 10.03
(c)................................................... 10.03
(S) 313 (a)................................................... 7.06
(b)................................................... 7.06
(c)................................................... 7.06
(d)................................................... 7.06
(S) 314 (a)................................................... 4.03, 4.04
(b)................................................... Not Applicable
(c)(1)................................................ 10.04
(c)(2)................................................ 10.04
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 10.05
(S) 315 (a)................................................... 7.01(b)
(b)................................................... 7.05
(c)................................................... 7.01(a)
(d)................................................... 7.01(c)
(d)(1)................................................ 7.01(c)(1)
(d)(2)................................................ 7.01(c)(2)
(d)(3)................................................ 7.01(c)(3)
(e)................................................... 6.11
(S) 316 (a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(a)(2)................................................ Not Applicable
(a)(last sentence).................................... 2.11
(b)................................................... 6.07
(S) 317 (a)(1)................................................ 6.08
(a)(2)................................................ 6.09
(b)................................................... 2.06
(S) 318 (a)................................................... 10.01
____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions............................................. 1
SECTION 1.02 Other Definitions....................................... 5
SECTION 1.03 Incorporation by Reference of Trust Indenture Act....... 5
SECTION 1.04 Rules of Construction................................... 6
ARTICLE II THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.................... 6
SECTION 2.02 Denominations........................................... 9
SECTION 2.03 Forms Generally......................................... 9
SECTION 2.04 Execution, Authentication, Delivery and Dating..........10
SECTION 2.05 Registrar and Paying Agent..............................11
SECTION 2.06 Paying Agent to Hold Money in Trust.....................12
SECTION 2.07 Holder Lists............................................12
SECTION 2.08 Transfer and Exchange...................................12
SECTION 2.09 Replacement Securities..................................13
SECTION 2.10 Outstanding Securities..................................13
SECTION 2.11 Original Issue Discount, Foreign-Denominated
and Treasury Securities.................................14
SECTION 2.12 Temporary Securities....................................14
SECTION 2.13 Cancellation............................................14
SECTION 2.14 Payments; Defaulted Interest............................15
SECTION 2.15 Persons Deemed Owners...................................15
SECTION 2.16 Computation of Interest.................................15
SECTION 2.17 Global Securities; Book-Entry Provisions................16
ARTICLE III REDEMPTION
SECTION 3.01 Applicability of Article................................18
SECTION 3.02 Notice to the Trustee...................................18
SECTION 3.03 Selection of Securities To Be Redeemed..................18
SECTION 3.04 Notice of Redemption....................................18
SECTION 3.05 Effect of Notice of Redemption..........................19
SECTION 3.06 Deposit of Redemption Price.............................19
SECTION 3.07 Securities Redeemed or Purchased in Part................20
SECTION 3.08 Purchase of Securities..................................20
SECTION 3.09 Mandatory and Optional Sinking Funds....................20
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities...21
SECTION 3.11 Redemption of Securities for Sinking Fund...............21
ARTICLE IV COVENANTS
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SECTION 4.01 Payment of Securities...................................22
SECTION 4.02 Maintenance of Office or Agency.........................22
SECTION 4.03 SEC Reports; Financial Statements.......................23
SECTION 4.04 Compliance Certificate..................................23
SECTION 4.05 Corporate Existence.....................................23
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.................24
SECTION 4.07 Additional Amounts......................................24
ARTICLE V SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations...............25
SECTION 5.02 Successor Person Substituted............................25
ARTICLE VI DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.......................................26
SECTION 6.02 Acceleration............................................28
SECTION 6.03 Other Remedies..........................................28
SECTION 6.04 Waiver of Existing Defaults.............................28
SECTION 6.05 Control by Majority.....................................29
SECTION 6.06 Limitations on Suits....................................29
SECTION 6.07 Rights of Holders to Receive Payment....................30
SECTION 6.08 Collection Suit by Trustee..............................30
SECTION 6.09 Trustee May File Proofs of Claim........................30
SECTION 6.10 Priorities..............................................31
SECTION 6.11 Undertaking for Costs...................................31
ARTICLE VII TRUSTEE
SECTION 7.01 Duties of Trustee.......................................32
SECTION 7.02 Rights of Trustee.......................................33
SECTION 7.03 May Hold Securities.....................................33
SECTION 7.04 Trustee's Disclaimer....................................33
SECTION 7.05 Notice of Defaults......................................34
SECTION 7.06 Reports by Trustee to Holders...........................34
SECTION 7.07 Compensation and Indemnity..............................34
SECTION 7.08 Replacement of Trustee..................................35
SECTION 7.09 Successor Trustee by Merger, etc........................37
SECTION 7.10 Eligibility; Disqualification...........................37
SECTION 7.11 Preferential Collection of Claims Against Company.......37
ARTICLE VIII DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations....................37
SECTION 8.02 Application of Trust Money..............................41
SECTION 8.03 Repayment to Company....................................41
SECTION 8.04 Reinstatement...........................................42
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ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders..............................42
SECTION 9.02 With Consent of Holders.................................43
SECTION 9.03 Compliance with Trust Indenture Act.....................45
SECTION 9.04 Revocation and Effect of Consents.......................45
SECTION 9.05 Notation on or Exchange of Securities...................46
SECTION 9.06 Trustee to Sign Amendments, etc.........................46
ARTICLE X MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls............................47
SECTION 10.02 Notices.................................................47
SECTION 10.03 Communication by Holders with Other Holders.............48
SECTION 10.04 Certificate and Opinion as to Conditions Precedent......48
SECTION 10.05 Statements Required in Certificate or Opinion...........48
SECTION 10.06 Rules by Trustee and Agents.............................49
SECTION 10.07 Legal Holidays..........................................49
SECTION 10.08 No Recourse Against Others..............................49
SECTION 10.09 Governing Law...........................................49
SECTION 10.10 No Adverse Interpretation of Other Agreements...........49
SECTION 10.11 Successors..............................................50
SECTION 10.12 Severability............................................50
SECTION 10.13 Counterpart Originals...................................50
SECTION 10.14 Table of Contents, Headings, etc........................50
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INDENTURE dated as of ________ __, ____ between Lyondell Chemical
Company, a Delaware corporation (the "Company"), and __________, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's unsecured
debentures, notes or other evidences of indebtedness (the "Securities") to be
issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the
express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the Company
with respect to certain taxes, assessments or other governmental charges imposed
on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized, with respect to any particular matter, to
act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
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"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation; provided, however, that for
purposes of any provision contained herein which is required by the TIA,
"Company" shall also mean each other obligor (if any) on the Securities of a
series.
"Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers of the
Company, and delivered to the Trustee.
"Corporate Trust Office" of the Trustee means the office of the
Trustee located at ______________________________________________, and as may be
located at such other address as the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified
pursuant to Section 2.01 hereof as the initial Depositary with respect to the
Securities of such series, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include such successor.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global form in
the name of the Depositary with respect thereto or its nominee.
"Government Obligations" means, with respect to a series of
Securities, direct obligations of the government that issues the currency in
which
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the Securities of the series are payable for the payment of which the full faith
and credit of such government is pledged, or obligations of a person controlled
or supervised by and acting as an agency or instrumentality of such government,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government.
"Holder" means a Person in whose name a Security is registered.
"Indenture" means this Indenture as amended or supplemented from time
to time, and includes the terms of a particular series of Securities established
as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount Security
that by its terms bears interest only after Maturity, interest payable after
Maturity.
"Interest Payment Date," when used with respect to any Security,
shall have the meaning assigned to such term in the Security as contemplated by
Section 2.01.
"Issue Date" means, with respect to Securities of a series, the date
on which the Securities of such series are originally issued under this
Indenture.
"Joint Venture" means (1) with respect to properties located in the
United States, any partnership, corporation or other entity, in which up to and
including 50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more subsidiaries, and (2) with respect to properties located outside the United
States, any partnership, corporation or other entity, in which up to and
including 60% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more Subsidiaries. A Joint Venture shall not be a Subsidiary.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York, __________, Houston,
Texas or a Place of Payment are authorized or obligated by law, regulation or
executive order to remain closed.
" Maturity" means, with respect to any Security, the date on which the
principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the stated maturity thereof,
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the chief financial officer, the
3
<PAGE>
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of
a Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Company or the Trustee.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of, premium (if any) on and
interest on the Securities of that series are payable as specified in accordance
with Section 2.01 subject to the provisions of Section 4.02.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Redemption Date" means, with respect to any Security to be redeemed,
the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture.
"Rule 144A Securities" means Securities of a series designated
pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
4
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"Security Custodian" means, with respect to Securities of a series,
the Trustee for Securities of such series, as custodian with respect to the
Securities of such series issued in global form, or any successor entity
thereto.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency. A Joint Venture shall not be a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
(S)(S) 77aaa-77bbbb), as in effect on the date hereof.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person, not in its individual capacity but solely
as Trustee, named as such above until a successor replaces it in accordance with
the applicable provisions of this Indenture, and thereafter "Trustee" means each
Person who is then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
means the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions," which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" means Government Obligations with
respect to Securities payable in Dollars.
5
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SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Bankruptcy Custodian"......................................... 6.01
"covenant defeasance".......................................... 8.01
"Conversion Event"............................................. 6.01
"Event of Default"............................................. 6.01
"Exchange Rate"................................................ 2.11
"Judgment Currency"............................................ 6.10
"legal defeasance"............................................. 8.01
"mandatory sinking fund payment"............................... 3.09
"optional sinking fund payment"................................ 3.09
"Paying Agent"................................................. 2.05
"Registrar".................................................... 2.05
"Required Currency"............................................ 6.10
"Successor".................................................... 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule under the TIA
have the meanings so assigned to them.
6
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SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this Agreement to Articles and Sections are
references to the corresponding Articles and Sections in and of
this Indenture.
ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from the Securities of all other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.12, 3.07 or 9.05);
(3) whether any Securities of the series are to be issuable initially
in temporary global form and whether any Securities of the series are to be
7
<PAGE>
issuable in permanent global form, as Global Securities or otherwise, and,
if so, whether beneficial owners of interests in any such Global Security
may exchange such interests for Securities of such series and of like tenor
of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in
Section 2.17, and the initial Depositary for any Global Security or
Securities of such series;
(4) the manner in which any interest payable on a temporary Global
Security on any Interest Payment Date will be paid if other than in the
manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to such Securities
shall be payable, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable and the
record date for the interest payable on any Securities on any Interest
Payment Date, or if other than provided herein, the Person to whom any
interest on Securities of the series shall be payable;
(7) the place or places where, subject to the provisions of
Section 4.02, the principal, premium (if any), interest and any Additional
Amounts with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option,
if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions upon which Securities
of the series shall be redeemed, purchased or repaid in whole or in part
pursuant to such obligation;
8
<PAGE>
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which any Securities of that series shall be
issuable;
(11) if other than Dollars, the currency or currencies (including
composite currencies) or the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or
property of the Company or any other Person, in which payment of the
principal, premium (if any), interest and any Additional Amounts with
respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies (including composite currencies) other than that in which the
Securities are stated to be payable, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to Securities of such
series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be
made;
(13) if the amount of payments of principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series may be determined with reference to any commodities, currencies or
indices, values, rates or prices or any other index or formula, the manner
in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to
Section 6.02;
(15) any additional means of satisfaction and discharge of this
Indenture and any additional conditions or limitations to discharge with
respect to Securities of the series pursuant to Article VIII or any
modifications of or deletions from such conditions or limitations;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.01 or covenants of the Company set forth in
Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer
or exchange of Securities of the series, which may amend, supplement,
modify or supersede those contained in this Article II;
9
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(18) if the Securities of the series are to be convertible into or
exchangeable for capital stock, other debt securities (including
Securities), warrants, other equity securities or any other securities or
property of the Company or any other Person, at the option of the Company
or the Holder or upon the occurrence of any condition or event, the terms
and conditions for such conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit
of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be
prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 2.03) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be set forth in an Officers'
Certificate or certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 2.01. In the absence of any
such provisions with respect to the Securities of any series, the Securities of
such series denominated in Dollars shall be issuable in denominations of $1,000
and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in
substantially such form or forms (including temporary or permanent global form)
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto. The Securities may have notations, legends or endorsements
required by law, securities exchange rule, the Company's certificate of
incorporation, bylaws or other similar governing documents, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). A copy of the
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Board Resolution establishing the form or forms of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of such
Securities.
The definitive Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
__________, as Trustee
By: _____________________________________
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on behalf of the
Company by manual or facsimile signature. The Company's seal, if any, shall be
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer of the Company whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized signatory of the Trustee, which signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company delivers such Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement (which need not
comply with Section 10.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
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The Trustee shall authenticate and deliver Securities of a series for
original issue upon a Company Order for the authentication and delivery of such
Securities or pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by Company Order. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated, the name or names of the initial
Holder or Holders and any other terms of the Securities of such series not
otherwise determined. If provided for in such procedures, such Company Order
may authorize (1) authentication and delivery of Securities of such series for
original issue from time to time, with certain terms (including, without
limitation, the Maturity dates or dates, original issue date or dates and
interest rate or rates) that differ from Security to Security and (2) may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Company or its duly authorized agent, which instructions
shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 10.04), and (subject to
Section 7.01) shall be fully protected in relying upon,
(a) an Officers' Certificate setting forth the Board Resolution and,
if applicable, an appropriate record of any action taken pursuant thereto,
as contemplated by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of such Securities has been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such form has been established in conformity with the provisions of
this Indenture;
(ii) if the terms of such Securities have been established by
or pursuant to Board Resolution, as is permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(iii) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company, enforceable
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against the Company in accordance with their terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws in effect from time to time affecting the rights of
creditors generally, and the application of general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
The Trustee shall not be required to authenticate such Securities if the
issuance of such Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of
Securities where Securities of such series may be presented for registration of
transfer or exchange ("Registrar") and an office or agency where Securities of
such series may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities of such series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
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SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on or any Additional Amounts with
respect to Securities and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds disbursed.
Upon payment over to the Trustee and upon accounting for any funds disbursed,
the Paying Agent (if other than the Company or a Subsidiary of the Company)
shall have no further liability for the money. If the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
Each Paying Agent shall otherwise comply with TIA (S) 317(b).
SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar with respect to a series of Securities, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date
with respect to such series of Securities, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders of such
series, and the Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to
Section 2.01:
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When Securities of any series are presented to the Registrar with the
request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met; provided, however, that the Securities presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instruction of transfer in form reasonably satisfactory
to the Registrar duly executed by the Holder thereof or by his attorney, duly
authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's written
request and submission of the Securities or Global Securities. No service
charge shall be made to a Holder for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in accordance with the
provisions of Section 2.04. Notwithstanding any other provisions of this
Indenture to the contrary, the Company shall not be required to register the
transfer or exchange of (a) any Security selected for redemption in whole or in
part pursuant to Article III, except the unredeemed portion of any Security
being redeemed in part or (b) any Security during the period beginning 15
Business Days before the mailing of notice of any offer to repurchase Securities
of the series required pursuant to the terms thereof or of redemption of
Securities of a series to be redeemed and ending at the close of business on the
date of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been destroyed, lost or stolen
and the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of such Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security. If
required by the Trustee or the Company, such Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge a Holder for their expenses in replacing a Security.
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Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Denominated and
Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal amount of an Original Issue Discount Security shall
be the principal amount thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof pursuant to
Section 6.02, (b) the principal amount of a Security denominated in a foreign
currency shall be the Dollar equivalent, as determined by the Company by
reference to the noon buying rate in The City of New York for cable transfers
for such currency, as such rate is certified for customs purposes by the Federal
Reserve Bank of New York (the "Exchange Rate") on the date of original issuance
of such Security, of the principal amount (or, in the case of an Original Issue
Discount Security, the Dollar equivalent, as determined by the Company by
reference to the Exchange Rate on the date of original issuance of such
Security, of the amount determined as provided in (a) above), of such Security
and (c) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded,
except that, for the purpose of determining whether the Trustee shall be
protected in relying upon any such direction, amendment, supplement, waiver or
consent, only Securities that the Trustee actually knows are so owned shall be
so disregarded.
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SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment or redemption or for credit against any sinking fund payment. The
Trustee shall cancel all Securities surrendered for registration of transfer,
exchange, payment, redemption, replacement or cancellation or for credit against
any sinking fund. Unless the Company shall direct in writing that canceled
Securities be returned to it, after written notice to the Company all canceled
Securities held by the Trustee shall be disposed of in accordance with the usual
disposal procedures of the Trustee, and the Trustee shall maintain a record of
their disposal. The Company may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the record date next preceding the Interest Payment Date, even if
such Securities are canceled after such record date and on or before such
Interest Payment Date. The Holder must surrender this Security to a Paying
Agent to collect principal payments. Unless otherwise provided with respect to
the Securities of any series, the Company will pay the principal of, premium (if
any) and interest on and Additional Amounts with respect to the Securities in
Dollars. Such amounts shall be payable at the offices of the Trustee, provided
that at the option of the Company, the Company may, however, pay such amounts
(1) by wire transfer with respect to Global Securities or (2) by check payable
in such money mailed to a Holder's registered address with respect to any
Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest on the defaulted interest, in each case at the rate provided in
the
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Securities and in Section 4.01. The Company may pay the defaulted interest to
the Persons who are Holders on a subsequent special record date. At least 15
days before any special record date selected by the Company, the Company (or the
Trustee, in the name of and at the expense of the Company upon 20 days' prior
written notice from the Company setting forth such record date and the interest
amount to be paid) shall mail to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payments of principal of, premium (if any)
or interest on, or any Additional Amounts with respect to such Security and for
all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
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SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global
Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of
Section 2.01 and the provisions of Section 2.02, any such Global Security shall
represent such of the outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified in such
Security or in a Company Order to be delivered to the Trustee pursuant to
Section 2.04. Subject to the provisions of Section 2.04 and, if applicable,
Section 2.12, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified in such Security or in the applicable Company Order. With respect to
the Securities of any series that are represented by a Global Security, the
Company authorizes the execution and delivery by the Trustee of a letter of
representations or other similar agreement or instrument in the form customarily
provided for by the Depositary appointed with respect to such Global Security.
Any Global Security may be deposited with the Depositary or its nominee, or may
remain in the custody of the Trustee pursuant to a FAST Balance Certificate
Agreement or similar agreement between the Trustee and the Depositary. If a
Company Order has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Security in
global form shall be in writing but need not comply with Section 10.05 and need
not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the
registered holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities and (ii) nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01: Transfers of a Global Security shall be limited to
transfers of such Global Security in whole,
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but not in part, to the Depositary, its successors or their respective nominees.
Interests of beneficial owners in a Global Security may be transferred in
accordance with the rules and procedures of the Depositary. Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Security if, and only if, either (1) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Security and a successor Depositary is not appointed by the Company within 90
days of such notice, (2) an Event of Default has occurred with respect to such
series and is continuing and the Registrar has received a request from the
Depositary to issue Securities in lieu of all or a portion of the Global
Security (in which case the Company shall deliver Securities within 30 days of
such request) or (3) the Company determines not to have the Securities
represented by a Global Security.
In connection with any transfer of a portion of the beneficial
interest in a Global Security to beneficial owners pursuant to this
Section 2.17, the Registrar shall reflect on its books and records the date and
a decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee upon receipt of a
Company Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.
In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section 2.17, the Global Security shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Securities of
authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities by the Depositary, or for maintaining, supervising or reviewing
any records of the Depositary relating to such Securities. Neither the Company
nor the Trustee shall be liable for any delay by the related Global Security
Holder or the Depositary in identifying the beneficial owners, and each such
Person may conclusively rely on, and shall be protected in relying on,
instructions from such Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Global Security together with written instructions (which need not comply with
Section 10.05 and need not be accompanied by an Opinion of Counsel) with regard
to the cancellation or reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
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Notwithstanding the provisions of Sections 2.03 and 2.14, unless
otherwise specified as contemplated by Section 2.01, payment of principal of,
premium (if any) and interest on and any Additional Amounts with respect to any
Global Security shall be made to the Person or Persons specified therein.
ARTICLE 3
REDEMPTION
SECTION 3.1 Applicability of Article.
Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.
SECTION 3.2 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to
this Indenture, it shall notify the Trustee of the Redemption Date and principal
amount of Securities of such series to be redeemed. The Company shall so notify
the Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) by delivering to the Trustee an Officers'
Certificate stating that such redemption will comply with the provisions of this
Indenture and of the Securities of such series. Any such notice may be canceled
at any time prior to the mailing of such notice of such redemption to any Holder
and shall thereupon be void and of no effect.
SECTION 3.3 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities of
such series not previously called for redemption, pro rata, by lot or by such
other method as the Trustee shall deem fair and appropriate and that may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
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For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any of the Securities redeemed or to be redeemed only in part, to the portion of
the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the
principal amount thereof to be redeemed and that on and after the
Redemption Date, upon surrender for cancellation of such Security to the
Paying Agent, a new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such
is the case; and
(7) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
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SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Securities called for redemption shall be
paid at the Redemption Price, but interest installments whose maturity is on or
prior to such Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.
SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions thereof
which are to be redeemed on that date, other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to such
Securities except for the right to receive the Redemption Price upon surrender
of such Securities. If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, premium, if any, any
Additional Amounts, and, to the extent lawful, accrued interest thereon shall,
until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or provided in the Securities or, in the case of
Original Issue Discount Securities, such Securities' yield to maturity.
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SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security without service charge a new Security or
Securities, of the same series and of any authorized denomination as requested
by such Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed.
SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the
Company and any Affiliate of the Company may at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Such acquisition
shall not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery,
the indebtedness represented thereby shall be deemed to be satisfied.
Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.
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SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than
any previously called for redemption) and may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
series of Securities; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver to the Trustee any Securities to be so
delivered. Failure of the Company to timely deliver such Officers' Certificate
and Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute the election of the Company (i) that the mandatory
sinking fund payment for such series due on the next succeeding sinking fund
payment date shall be paid entirely in cash without the option to deliver or
credit Securities of such series in respect thereof and (ii) that the Company
will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of any
particular series, such cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Issuer makes no such request then it shall be
carried over until
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a sum in excess of $100,000 (or the Dollar equivalent thereof as aforesaid) is
available. Not less than 30 days before each such sinking fund payment date, the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.04. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities of each series on
the dates and in the manner provided in the Securities of such series and in
this Indenture. Principal, premium, interest and any Additional Amounts shall
be considered paid on the date due if the Paying Agent, other than the Company
or a Subsidiary of the Company, holds on that date money deposited by the
Company designated for and sufficient to pay all principal, premium, interest
and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium (if
any), at a rate equal to the then applicable interest rate on the Securities to
the extent lawful; and it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and any Additional Amount (without regard to any applicable grace period) at the
same rate to the extent lawful.
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SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities of that series may be presented
for registration of transfer or exchange, where Securities of that series may be
presented for payment and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof, is located at __________. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it
files the same with the SEC, copies of the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company shall also comply with the provisions of TIA (S) 314(a).
(b) If the Company is not subject to the requirements of Section 13
or 15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule
144A Securities and prospective purchasers of Rule 144A Securities designated by
the Holders of Rule 144A Securities, promptly upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) promulgated
under the Securities Act of 1933, as amended.
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SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a statement signed by two Officers
of the Company, which need not constitute an Officers' Certificate, complying
with TIA (S) 314(a)(4) and stating that in the course of performance by the
signing Officers of the Company of their duties as such Officers of the Company
they would normally obtain knowledge of the keeping, observing, performing and
fulfilling by the Company of its obligations under this Indenture, and further
stating, as to each such Officer signing such statement, that to the best of his
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge and what action the
Company is taking or proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.05 Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership and other existence of each of its
Subsidiaries and all rights (charter and statutory) and franchises of the
Company and its Subsidiaries, provided that the Company shall not be required to
preserve the corporate existence of any Subsidiary of the Company or any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole and that the loss thereof
would not have a material adverse effect on the business, prospects, assets or
financial condition of the Company and its Subsidiaries taken as a whole and
would not have any material adverse effect on the payment and performance of the
obligations of the Company under the Securities and this Indenture.
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SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of such
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section 4.07 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Unless otherwise provided pursuant to Section 2.01 with respect to
Securities of any series: If the Securities of a series provide for the payment
of Additional Amounts, at least ten days prior to the first Interest Payment
Date with respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least ten days prior to
each date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the
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Securities of that series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities and the Company will
pay to such Paying Agent the Additional Amounts required by this Section. The
Company covenants to indemnify the Trustee and any Paying Agent for and to hold
them harmless against any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 4.07.
ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.
The Company shall not, in any transaction or series of transactions,
consolidate with or merge into any Person, or sell, lease, convey, transfer or
otherwise dispose of all or substantially all of its assets to any Person,
unless:
(1) either (a) the Company shall be the continuing corporation or (b)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged, or to which such sale, lease, conveyance,
transfer or other disposition shall be made (collectively, the
"Successor"), is organized and validly existing under the laws of the
United States, any political subdivision thereof or any State thereof or
the District of Columbia, and expressly assumes by supplemental indenture
the due and punctual payment of the principal of (and premium, if any) and
interest on and Additional Amounts with respect to all the Securities and
the performance of the Company's covenants and obligations under this
Indenture and the Securities;
(2) immediately after giving effect to such transaction or series of
transactions, no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the transaction and such
supplemental indenture comply with this Indenture.
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SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease,
conveyance, transfer or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01, the Successor formed by
such consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture and the Securities with the same effect as if such
Successor had been named as the Company herein and the predecessor Company, in
the case of a sale, conveyance, transfer or other disposition, shall be released
from all obligations under this Indenture and the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically
deleted or modified in or pursuant to the supplemental indenture or Board
Resolution establishing such series of Securities or in the form of Security for
such series, an "Event of Default," wherever used herein with respect to
Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any
Additional Amounts with respect to any Security of that series when the
same becomes due and payable and such default continues for a period of 30
days;
(2) the Company defaults in the payment of (A) the principal of
any Security of that series at its Maturity or (B) premium (if any) on any
Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund
payment, when and as due by the terms of a Security of that series, and
such default continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants
or agreements in, or provisions of, the Securities of such series or this
Indenture (other than an agreement, covenant or provision that has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series) which shall not have been
remedied within the specified period after written notice, as specified in
the last paragraph of this Section 6.01;
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(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that remains unstayed and in effect for 90 days
and that:
(A) is for relief against the Company as debtor in an
involuntary case,
(B) appoints a Bankruptcy Custodian of the Company or a
Bankruptcy Custodian for all or substantially all of the property of
the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to
Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default
unless a Trust Officer at the Corporate Trust Office of the Trustee receives
written notice at the Corporate Trust Office of the Trustee of such Default with
specific reference to such Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the
principal of, premium or interest on or Additional Amounts with respect to any
Security is payable in a currency or currencies (including a composite currency)
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other than Dollars and such currency or currencies are not available to the
Company for making payment thereof due to the imposition of exchange controls or
other circumstances beyond the control of the Company (a "Conversion Event"),
the Company will be entitled to satisfy its obligations to Holders of the
Securities by making such payment in Dollars in an amount equal to the Dollar
equivalent of the amount payable in such other currency, as determined by the
Company by reference to the Exchange Rate on the date of such payment, or, if
such rate is not then available, on the basis of the most recently available
Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01,
any payment made under such circumstances in Dollars where the required payment
is in a currency other than Dollars will not constitute an Event of Default
under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company shall
give written notice thereof to the Trustee; and the Trustee, promptly after
receipt of such notice, shall give notice thereof in the manner provided in
Section 10.02 to the Holders. Promptly after the making of any payment in
Dollars as a result of a Conversion Event, the Company shall give notice in the
manner provided in Section 10.02 to the Holders, setting forth the applicable
Exchange Rate and describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the then outstanding Securities of the series
affected by such Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by such
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 90 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
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SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at
the time outstanding (other than an Event of Default specified in clause (5) or
(6) of Section 6.01) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by such default (or, in the case
of an Event of Default described in clause (4) of Section 6.01, if outstanding
Securities of other series are affected by such Default, then at least 25% in
principal amount of the then outstanding Securities so affected by notice to the
Company and the Trustee, may declare the principal of (or, if any such
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) and accrued and unpaid
interest on all then outstanding Securities of such series or of all series, as
the case may be, to be due and payable. Upon any such declaration the amounts
due and payable on the Securities shall be due and payable immediately. If an
Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs,
such amounts shall ipso facto become and be immediately due and payable without
any declaration, notice or other act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the then outstanding Securities
of the series affected by such default or all series, as the case may be, by
written notice to the Trustee may rescind an acceleration and its consequences
(other than nonpayment of principal of or premium or interest on or any
Additional Amounts with respect to the Securities) if the rescission would not
conflict with any judgment or decree and if all existing Events of Default with
respect to Securities of that series (or of all series, as the case may be) have
been cured or waived, except nonpayment of principal, premium, interest or any
Additional Amounts that has become due solely because of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, or premium,
if any, or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
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SECTION 6.04 Waiver of Existing Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to such series or all series, as
the case may be, and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or all
series or a solicitation of consents in respect of Securities of such series or
all series, provided that in each case such offer or solicitation is made to all
Holders of then outstanding Securities of such series or all series (but the
terms of such offer or solicitation may vary from series to series)), except (1)
a continuing Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on or any Additional Amounts with respect to any
Security or (2) a continued Default in respect of a provision that under
Section 9.02 cannot be amended or supplemented without the consent of each
Holder affected. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in
principal amount of the then outstanding Securities of such series may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking such action.
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SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series
may pursue a remedy with respect to this Indenture or the Securities of such
series only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities of such series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and premium, if any,
and interest on and any Additional Amounts with respect to the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
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SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
amount of principal, premium (if any), interest and any Additional Amounts
remaining unpaid on the Securities of the series affected by the Event of
Default, and interest on overdue principal and premium, if any, and, to the
extent lawful, interest on overdue interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
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SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in
respect of which or for the benefit of which such money has been collected,
for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium (if any),
interest and any Additional Amounts, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix record
dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining a judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of, premium (if any) or interest
on or Additional Amounts with respect to the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the New York
Business Day next preceding that on which final judgment is given. Neither the
Company nor the Trustee shall be liable for any shortfall nor shall it benefit
from any windfall in payments to Holders of Securities under this Section 6.10
caused by a change in exchange rates between the time the amount of a judgment
against it is calculated as above and the time the Trustee converts the Judgment
Currency into the Required Currency to make payments under this Section to
Holders of Securities, but payment of such judgment shall discharge all amounts
owed by the Company on the claim or claims underlying such judgment.
SECTION 6.11 Undertaking for Costs.
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In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in such exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine such certificates and opinions to determine
whether, on their face, they appear to conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
reasonably satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law. All money received by the Trustee shall,
until applied as herein provided, be held in trust for the payment of the
principal of, premium (if any) and interest on and Additional Amounts with
respect to the Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
instruction, an Officers' Certificate or an Opinion of Counsel or both to be
provided. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such instruction, Officers' Certificate or
Opinion of Counsel. The Trustee may consult at the Company's expense with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any of
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights and duties. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities or any money paid to the Company or upon
the Company's direction under any provision hereof, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee and it shall not be responsible for any statement or recital herein
or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and it is known to the Trustee, the Trustee
shall mail to Holders of Securities of such series a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium (if any) and
interest on and Additional Amounts or any sinking fund installment with respect
to the Securities of such series, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.
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SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of
this Indenture, the Trustee shall mail to Holders of a series and the Company a
brief report dated as of such reporting date that complies with TIA (S) 313(a);
provided, however, that if no event described in TIA (S) 313(a) has occurred
within the twelve months preceding the reporting date with respect to a series,
no report need be transmitted to Holders of such series. The Trustee also shall
comply with TIA (S) 313(b). The Trustee shall also transmit by mail all reports
if and as required by TIA (S)(S) 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a
series of Securities shall be filed by the Company with the SEC and each
securities exchange, if any, on which the Securities of such series are listed.
The Company shall notify the Trustee if and when any series of Securities is
listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred by it.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee against any loss, liability
or expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the payment obligations of the Company in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
premium (if any) and interest on and any Additional Amounts with respect to
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Securities of series. Such lien and the indemnity obligation under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to
the Securities of one or more series by so notifying the Company. The Holders
of a majority in principal amount of the then outstanding Securities of any
series may remove the Trustee with respect to the Securities of such series by
so notifying the Trustee and the Company. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). Within one year after
the successor Trustee with respect to the Securities of any series takes office,
the Holders of a majority in principal amount of the Securities of such series
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee with respect to the Securities of any series
does not take office within 60 days after the retiring Trustee resigns or is
removed, the
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retiring Trustee, the Company or the Holders of at least 10% in principal amount
of the then outstanding Securities of such series may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
If the Trustee with respect to the Securities of a series fails to
comply with Section 7.10, any Holder of Securities of such series may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of such
series.
In case of the appointment of a successor Trustee with respect to all
Securities, each such successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
(but not all) series shall execute and deliver an indenture supplemental hereto
in which each successor Trustee shall accept such appointment and that (1) shall
confer to each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall confirm that all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee.
Nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, and each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee. Upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor Trustee
shall have all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates. On request of the Company or any successor
Trustee, such retiring Trustee shall transfer to such successor Trustee all
property held by such retiring Trustee as Trustee with
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respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Notwithstanding replacement of the Trustee or Trustees pursuant to
this Section 7.08, the obligations of the Company under Section 7.07 shall
continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia and authorized under such laws to
exercise corporate trust power, shall be subject to supervision or examination
by Federal or State (or the District of Columbia) authority and shall have, or
be a Subsidiary of a bank or bank holding company having, a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition.
The Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA (S) 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA (S) 310(b).
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SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions of
TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A
Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to
the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect
to the Securities of a series (except that the Company's obligations under
Section 7.07, the Trustee's and Paying Agent's obligations under Section 8.03
and the rights, powers, protections and privileges accorded the Trustee under
Article VII shall survive), and the Trustee, on demand of the Company, shall
execute proper instruments acknowledging the satisfaction and discharge of this
Indenture with respect to the Securities of such series, when:
(1) either
(A) all outstanding Securities of such series theretofore
authenticated and issued (other than destroyed, lost or stolen
Securities that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore
delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and, in the case of clause (i), (ii) or (iii) above, the Company has
irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i))
in trust for such purpose (x) cash in an amount, or (y) U.S.
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Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash in
an amount or (z) a combination thereof, which will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge the entire indebtedness on the
Securities of such series for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or for principal, premium, if any, and interest to the
Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by
Section 2.01, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable
by it hereunder with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with, together with an Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable
to Securities of a series as contemplated by Section 2.01, the Company may
terminate certain of its obligations under this Indenture ("covenant
defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of such
series, (i) money in the currency in which payment of the Securities of
such series is to be made in an amount, or (ii) Government Obligations with
respect to such series, maturing as to principal and interest at such times
and in such amounts as will insure the availability of money in the
currency in which payment of the Securities of such series is to be made in
an amount or (iii) a combination thereof, that is sufficient, in the
opinion (in the case of (ii) and (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay, without consideration of the reinvestment
of any such amounts and after payment of all taxes or other charges or
assessments in
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respect thereof payable by the Trustee, the principal of and premium (if
any) and interest on all Securities of such series on each date that such
principal, premium (if any) or interest is due and payable and (at the
Stated Maturity thereof or upon redemption as provided in Section 8.01(e))
to pay all other sums payable by it hereunder; provided that the Trustee
shall have been irrevocably instructed to apply such money and/or the
proceeds of such U.S. Government Obligations to the payment of said
principal, premium (if any) and interest with respect to the Securities of
such series as the same shall become due;
(2) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel from a nationally recognized counsel acceptable to the Trustee or a
tax ruling to the effect that the Holders will not recognize income, gain
or loss for Federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.01(b) and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised;
(5) the Company has complied with any additional conditions specified
pursuant to Section 2.01 to be applicable to the discharge of Securities of
such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a
conflicting interest as defined in TIA (S) 310(b).
In such event, this Indenture shall cease to be of further effect
(except as set forth in this paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture. However, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04,
the Trustee's and Paying Agent's obligations in Section 8.03 and the rights,
powers, protections and privileges accorded the Trustee under Article VII shall
survive until all Securities of such series are no longer outstanding.
Thereafter, only the Company's obligations in Section 7.07 and the Trustee's and
Paying Agent's obligations in Section 8.03 shall survive with respect to
Securities of such series.
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After such irrevocable deposit made pursuant to this Section 8.01(b)
and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture with respect to the Securities of such series except for
those surviving obligations specified above.
In order to have money available on a payment date to pay principal of
or premium (if any) or interest on the Securities, the Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money. Government Obligations shall
not be callable at the issuer's option.
(c) If the Company has previously complied or is concurrently
complying with Section 8.01(b) (other than any additional conditions specified
pursuant to Section 2.01 that are expressly applicable only to covenant
defeasance) with respect to Securities of a series, then, unless this Section
8.01(c) is specified as not being applicable to Securities of such series as
contemplated by Section 2.01, the Company may elect to be discharged ("legal
defeasance") from its obligations to make payments with respect to Securities of
such series, if:
(1) no Default or Event of Default under clauses (5) and (6) of
Section 6.01 hereof shall have occurred at any time during the period
ending on the 91st day after the date of deposit contemplated by
Section 8.01(b) (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such
series as contemplated by Section 2.01, the Company has delivered to the
Trustee an Opinion of Counsel from a nationally recognized counsel
acceptable to the Trustee to the effect referred to in Section 8.01(b)(4)
with respect to such legal defeasance, which opinion is based on (i) a
private ruling of the Internal Revenue Service addressed to the Company,
(ii) a published ruling of the Internal Revenue Service or (iii) a change
in the applicable federal income tax law (including regulations) after the
date of this Indenture;
(3) the Company has complied with any other conditions specified
pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of such series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request
requesting such legal defeasance of the Securities of such series and an
Officers' Certificate stating that all conditions precedent to with respect
to
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such legal defeasance of the Securities of such series have been complied
with, together with an Opinion of Counsel to the same effect.
In such event, the Company will be discharged from its obligations
under this Indenture and the Securities of such series to pay principal of,
premium (if any) and interest on, and Additional Amounts with respect to,
Securities of such series, the Company's obligations under Sections 4.01, 4.02
and 5.01 shall terminate with respect to such Securities, and the entire
indebtedness of the Company evidenced by such Securities shall be deemed paid
and discharged.
(d) If and to the extent additional or alternative means of
satisfaction, discharge or defeasance of Securities of a series are specified to
be applicable to such series as contemplated by Section 2.01, the Company may
terminate any or all of its obligations under this Indenture with respect to
Securities of a series and any or all of its obligations under the Securities of
such series if it fulfills such other means of satisfaction and discharge as may
be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of such series.
(e) If Securities of any series subject to subsections (a), (b), (c)
or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the terms of the applicable trust
arrangement shall provide for such redemption, and the Company shall make such
arrangements as are reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium (if any)
and interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made.
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SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or U.S. Government Obligations (or
proceeds therefrom) held by them at any time upon the written request of the
Company.
Subject to the requirements of any applicable abandoned property laws,
the Trustee and the Paying Agent shall pay to the Company upon written request
any money held by them for the payment of principal, premium (if any), interest
or any Additional Amounts that remains unclaimed for two years after the date
upon which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability of the Trustee and the Paying Agent with respect to such money
shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or
U.S. Government Obligations deposited with respect to Securities of any series
in accordance with Section 8.01 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the
Company under this Indenture with respect to the Securities of such series and
under the Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 hereof until such time as the
Trustee or the Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; provided, however, that
if the Company has made any payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities or waive any provision hereof or thereof without the consent of
any Holder:
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(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to provide for the issuance of bearer
Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add
guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), or to surrender any right or power herein conferred upon the
Company;
(7) to add any additional Events of Default with respect to all or
any series of the Securities (and, if such Event of Default is applicable
to less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no outstanding Security of any series created prior to the
execution of such amendment or supplemental indenture that is adversely
affected in any material respect by such change in or elimination of such
provision;
(9) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 8.01; provided,
however, that any such action shall not adversely affect the interest of
the Holders of Securities of such series or any other series of Securities
in any material respect; or
(11) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
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more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 7.08.
Upon the request of the Company, accompanied by a Board Resolution,
and upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities of any one or more series or all series or a solicitation of
consents in respect of Securities of any one or more series or all series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution,
and upon the filing with the Trustee of evidence of the consent of the Holders
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of such
amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities of one or more series or of all series may waive compliance in a
particular instance by the Company with any provision of this Indenture with
respect to Securities of such series (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or a
solicitation of consents in respect of Securities of such series, provided that
in each case such offer or solicitation is made to all Holders of then
outstanding Securities of such series (but the terms of such offer or
solicitation may vary from series to series)).
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However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of or premium on, or change the Stated
Maturity of, any Security;
(4) reduce the premium, if any, payable upon the redemption of any
Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts
with respect to any Security;
(6) change the coin or currency or currencies (including composite
currencies) in which any Security or any premium, interest or Additional
Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of this
Indenture pursuant to Section 6.04 or 6.07 or make any change in this
sentence of Section 9.02; or
(9) waive a continuing Default or Event of Default in the payment of
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities
shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
(which need not comply with Section 316(c) of the TIA) for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver or to take any other action under this Indenture. If a record date is
fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from Holders of the principal amount of Securities required
hereunder for such
55
<PAGE>
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (9) of Section 9.02 hereof. In such case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security at
the request of the Company regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange
for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment or
supplement.
Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplement.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of
Counsel provided at the expense of the Company as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
56
<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of TIA (S) 318(c), the imposed duties shall
control.
SECTION 10.02 Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telex, facsimile or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Kerry A. Galvin, Associate General Counsel
If to the Trustee:
____________________
____________________
____________________
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
57
<PAGE>
Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to
the Trustee or the Company by Holders, shall be in writing, except as otherwise
set forth herein.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
58
<PAGE>
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of
TIA (S) 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of
the Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
59
<PAGE>
SECTION 10.09 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any other Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 10.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 10.12 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the fullest extent permitted by applicable
law, not in any way be affected or impaired thereby.
SECTION 10.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 10.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
60
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
LYONDELL CHEMICAL COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
--------------------------------------------,
as Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
61
<PAGE>
Exhibit 4.2
[FORM OF SUBORDINATED DEBT INDENTURE]
================================================================================
LYONDELL CHEMICAL COMPANY
as Issuer
and
[NAME OF TRUSTEE]
as Trustee
------------------------
Indenture
Dated as of ______________, ____
------------------------
Subordinated Debt Securities
================================================================================
<PAGE>
LYONDELL CHEMICAL COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF _______________
-----------------------
Section of
Trust Indenture Section(s) of
Act of 1939 Indenture
----------- ---------
(S) 310 (a)(1)..................................... 7.10
(a)(2)..................................... 7.10
(a)(3)..................................... Not Applicable
(a)(4)..................................... Not Applicable
(a)(5)..................................... 7.10
(b)........................................ 7.08, 7.10
(S) 311 (a)........................................ 7.11
(b)........................................ 7.11
(c)........................................ Not Applicable
(S) 312 (a)........................................ 2.07
(b)........................................ 11.03
(c)........................................ 11.03
(S) 313 (a)........................................ 7.06
(b)........................................ 7.06
(c)........................................ 7.06
(d)........................................ 7.06
(S) 314 (a)........................................ 4.03, 4.04
(b)........................................ Not Applicable
(c)(1)..................................... 11.04
(c)(2)..................................... 11.04
(c)(3)..................................... Not Applicable
(d)........................................ Not Applicable
(e)........................................ 11.05
(S) 315 (a)........................................ 7.01(b)
(b)........................................ 7.05
(c)........................................ 7.01(a)
(d)........................................ 7.01(c)
(d)(1)..................................... 7.01(c)(1)
(d)(2)..................................... 7.01(c)(2)
(d)(3)..................................... 7.01(c)(3)
(e)........................................ 6.11
(S) 316 (a)(1)(A).................................. 6.05
(a)(1)(B).................................. 6.04
(a)(2)..................................... Not Applicable
(a)(last sentence)......................... 2.11
(b)........................................ 6.07
(S) 317 (a)(1)..................................... 6.08
(a)(2)..................................... 6.09
(b)........................................ 2.06
(S) 318 (a)........................................ 11.01
____________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01 Definitions.......................................................... 1
SECTION 1.02 Other Definitions.................................................... 7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.................... 8
SECTION 1.04 Rules of Construction................................................ 8
ARTICLE II THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series................................. 9
SECTION 2.02 Denominations........................................................ 12
SECTION 2.03 Forms Generally...................................................... 12
SECTION 2.04 Execution, Authentication, Delivery and Dating....................... 13
SECTION 2.05 Registrar and Paying Agent........................................... 15
SECTION 2.06 Paying Agent to Hold Money in Trust.................................. 15
SECTION 2.07 Holder Lists......................................................... 16
SECTION 2.08 Transfer and Exchange................................................ 16
SECTION 2.09 Replacement Securities............................................... 17
SECTION 2.10 Outstanding Securities............................................... 17
SECTION 2.11 Original Issue Discount, Foreign-Denominated and Treasury Securities. 18
SECTION 2.12 Temporary Securities................................................. 18
SECTION 2.13 Cancellation......................................................... 19
SECTION 2.14 Payments; Defaulted Interest......................................... 19
SECTION 2.15 Persons Deemed Owners................................................ 20
SECTION 2.16 Computation of Interest.............................................. 20
SECTION 2.17 Global Securities; Book-Entry Provisions............................. 20
ARTICLE III REDEMPTION
SECTION 3.01 Applicability of Article............................................. 22
SECTION 3.02 Notice to the Trustee................................................ 23
SECTION 3.03 Selection of Securities To Be Redeemed............................... 23
SECTION 3.04 Notice of Redemption................................................. 23
SECTION 3.05 Effect of Notice of Redemption....................................... 24
SECTION 3.06 Deposit of Redemption Price.......................................... 25
SECTION 3.07 Securities Redeemed or Purchased in Part............................. 25
SECTION 3.08 Purchase of Securities............................................... 26
SECTION 3.09 Mandatory and Optional Sinking Funds................................. 26
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities................ 26
SECTION 3.11 Redemption of Securities for Sinking Fund............................ 27
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV COVENANTS
<S> <C> <C>
SECTION 4.01 Payment of Securities............................................... 28
SECTION 4.02 Maintenance of Office or Agency..................................... 28
SECTION 4.03 SEC Reports; Financial Statements................................... 29
SECTION 4.04 Compliance Certificate.............................................. 29
SECTION 4.05 Corporate Existence................................................. 30
SECTION 4.06 Waiver of Stay, Extension or Usury Laws............................. 30
SECTION 4.07 Additional Amounts.................................................. 31
ARTICLE V SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations........................... 32
SECTION 5.02 Successor Person Substituted........................................ 32
ARTICLE VI DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default................................................... 33
SECTION 6.02 Acceleration........................................................ 36
SECTION 6.03 Other Remedies...................................................... 36
SECTION 6.04 Waiver of Existing Defaults......................................... 37
SECTION 6.05 Control by Majority................................................. 37
SECTION 6.06 Limitations on Suits................................................ 38
SECTION 6.07 Rights of Holders to Receive Payment................................ 38
SECTION 6.08 Collection Suit by Trustee.......................................... 39
SECTION 6.09 Trustee May File Proofs of Claim.................................... 39
SECTION 6.10 Priorities.......................................................... 40
SECTION 6.11 Undertaking for Costs............................................... 41
ARTICLE VII TRUSTEE
SECTION 7.01 Duties of Trustee................................................... 41
SECTION 7.02 Rights of Trustee................................................... 42
SECTION 7.03 May Hold Securities................................................. 43
SECTION 7.04 Trustee's Disclaimer................................................ 43
SECTION 7.05 Notice of Defaults.................................................. 43
SECTION 7.06 Reports by Trustee to Holders....................................... 44
SECTION 7.07 Compensation and Indemnity.......................................... 44
SECTION 7.08 Replacement of Trustee.............................................. 45
SECTION 7.09 Successor Trustee by Merger, etc.................................... 47
SECTION 7.10 Eligibility; Disqualification....................................... 47
SECTION 7.11 Preferential Collection of Claims Against Company................... 48
ARTICLE VIII DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations................................ 48
SECTION 8.02 Application of Trust Money.......................................... 52
SECTION 8.03 Repayment to Company................................................ 53
SECTION 8.04 Reinstatement....................................................... 53
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS
<S> <C> <C>
SECTION 9.01 Without Consent of Holders................................................. 53
SECTION 9.02 With Consent of Holders.................................................... 54
SECTION 9.03 Compliance with Trust Indenture Act........................................ 57
SECTION 9.04 Revocation and Effect of Consents.......................................... 57
SECTION 9.05 Notation on or Exchange of Securities...................................... 58
SECTION 9.06 Trustee to Sign Amendments, etc............................................ 59
ARTICLE X SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness............................. 59
SECTION 10.02 No Payment on Securities in Certain Circumstances.......................... 60
SECTION 10.03 Securities Subordinated to Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation or Reorganization.............................. 61
SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness.................... 62
SECTION 10.05 Obligations of the Company Unconditional................................... 64
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice.... 64
SECTION 10.07 Application by Trustee of Amounts Deposited with It........................ 64
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.................................. 65
SECTION 10.09 Trustee to Effectuate Subordination of Securities.......................... 65
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness............................... 66
SECTION 10.11 Article X Not to Prevent Events of Default................................. 66
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness............. 66
SECTION 10.13 Article Applicable to Paying Agent......................................... 67
ARTICLE XI MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.............................................. 67
SECTION 11.02 Notices................................................................... 67
SECTION 11.03 Communication by Holders with Other Holders............................... 68
SECTION 11.04 Certificate and Opinion as to Conditions Precedent........................ 69
SECTION 11.05 Statements Required in Certificate or Opinion............................. 69
SECTION 11.06 Rules by Trustee and Agents............................................... 69
SECTION 11.07 Legal Holidays............................................................ 70
SECTION 11.08 No Recourse Against Others................................................ 70
SECTION 11.09 Governing Law............................................................. 70
SECTION 11.10 No Adverse Interpretation of Other Agreements............................. 70
SECTION 11.11 Successors................................................................ 70
SECTION 11.12 Severability.............................................................. 70
SECTION 11.13 Counterpart Originals..................................................... 71
SECTION 11.14 Table of Contents, Headings, etc.......................................... 71
</TABLE>
iii
<PAGE>
INDENTURE dated as of _______________ between Lyondell Chemical
Company, a Delaware corporation (the "Company"), and ____________________, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's unsecured
debentures, notes or other evidences of indebtedness (the "Securities") to be
issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts required by the
express terms of a Security or by or pursuant to a Board Resolution, under
circumstances specified therein or pursuant thereto, to be paid by the Company
with respect to certain taxes, assessments or other governmental charges imposed
on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For purposes of this definition, "control"
of a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Bankruptcy Law" means Title 11 of the United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized, with respect to any particular matter, to
act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
1
<PAGE>
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Capitalized Lease Obligation" of any Person means any obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation; provided, however, that for
purposes of any provision contained herein which is required by the TIA,
"Company" shall also mean each other obligor (if any) on the Securities of a
series.
"Company Order" and "Company Request" mean, respectively, a written
order or request signed in the name of the Company by two Officers of the
Company, and delivered to the Trustee.
"Corporate Trust Office" of the Trustee means the office of the
Trustee located at ____________________, and as may be located at such other
address as the Trustee may give notice to the Company.
"Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person specified
pursuant to Section 2.01 hereof as the initial Depositary with respect to the
Securities of such series, until a successor shall have been appointed and
become such pursuant to the applicable provision of this Indenture, and
thereafter "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness," unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means any
Senior Indebtedness that (i) in the instrument evidencing the same or the
assumption or guarantee thereof (or related documents to which the Company is a
party) is expressly designated as "Designated Senior Indebtedness" for purposes
of this Indenture and (ii) satisfies such other conditions as may be provided
with respect to the Securities of such series; provided that such instruments or
documents may place limitations and conditions on the rights of the holders of
such Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness.
"Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (a) except as set forth in (b), with respect to any
Person, Capital Stock of such Person that,
2
<PAGE>
by its terms or by the terms of any security into which it is convertible,
exercisable or exchangeable, is, or upon the happening of an event or the
passage of time would be, required to be redeemed or repurchased (including at
the option of the holder thereof) by such Person or any Subsidiary of such
Person, in whole or in part, on or prior to the Stated Maturity of the
Securities of such series, and (b) with respect to any Subsidiary of such Person
(including with respect to any Subsidiary of the Company), any Capital Stock
other than any common stock with no preference, privileges, or redemption or
repayment provisions.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Security" means a Security that is issued in global form in
the name of the Depositary with respect thereto or its nominee.
"Government Obligations" means, with respect to a series of
Securities, direct obligations of the government that issues the currency in
which the Securities of the series are payable for the payment of which the full
faith and credit of such government is pledged, or obligations of a person
controlled or supervised by and acting as an agency or instrumentality of such
government, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by such government.
"Holder" means a Person in whose name a Security is registered.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit,
performance bonds and other obligations issued by or for the account of such
Person in the ordinary course of business, to the extent not drawn or, to the
extent drawn, if such drawing is reimbursed not later than the third Business
Day following demand for reimbursement, (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of
3
<PAGE>
property or services, except trade payables and accrued expenses incurred in the
ordinary course of business, (v) all Capitalized Lease Obligations of such
Person, (vi) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person (provided
that if the obligations so secured have not been assumed in full by such Person
or are not otherwise such Person's legal liability in full, then such
obligations shall be deemed to be in an amount equal to the greater of (a) the
lesser of (1) the full amount of such obligations and (2) the fair market value
of such assets, as determined in good faith by the Board of Directors of such
Person, which determination shall be evidenced by a Board Resolution, and (b)
the amount of obligations as have been assumed by such Person or which are
otherwise such Person's legal liability), and (vii) all Indebtedness of others
(other than endorsements in the ordinary course of business) guaranteed by such
Person to the extent of such guarantee.
"Indenture" means this Indenture as amended or supplemented from time
to time, and includes the terms of a particular series of Securities established
as contemplated by Section 2.01.
"interest" means, with respect to an Original Issue Discount Security
that by its terms bears interest only after Maturity, interest payable after
Maturity.
"Interest Payment Date," when used with respect to any Security,
shall have the meaning assigned to such term in the Security as contemplated by
Section 2.01.
"Issue Date" means, with respect to Securities of a series, the date
on which the Securities of such series are originally issued under this
Indenture.
"Joint Venture" means (1) with respect to properties located in the
United States, any partnership, corporation or other entity, in which up to and
including 50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more subsidiaries, and (2) with respect to properties located outside the United
States, any partnership, corporation or other entity, in which up to and
including 60% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more Subsidiaries. A Joint Venture shall not be a Subsidiary.
"Junior Security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of such Person or any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of such series and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities of such series.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in any of The City of New York, New York, _______________, Houston,
Texas or a Place of Payment are authorized or obligated by law, regulation or
executive order to remain closed.
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"Maturity" means, with respect to any Security, the date on which the
principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the stated maturity thereof,
or by declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the chief financial officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of a Person.
"Officers' Certificate" means a certificate signed by two Officers of
a Person.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Company or the Trustee.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of, premium (if any) on and
interest on the Securities of that series are payable as specified in accordance
with Section 2.01 subject to the provisions of Section 4.02.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on the Security.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Redemption Date" means, with respect to any Security to be redeemed,
the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" means, with respect to any Security to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture.
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"Rule 144A Securities" means Securities of a series designated
pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the preamble of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Custodian" means, with respect to Securities of a series,
the Trustee for Securities of such series, as custodian with respect to the
Securities of such series issued in global form, or any successor entity
thereto.
"Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means (i)
all Indebtedness of the Company, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such
Indebtedness, it is provided that such Indebtedness is not superior in right of
payment to the Securities or to other Indebtedness which is pari passu with or
subordinated to the Securities, and (ii) any modifications, refunding,
deferrals, renewals or extensions of any such Indebtedness or securities, notes
or other evidences of Indebtedness issued in exchange for such Indebtedness;
provided that in no event shall "Senior Indebtedness" include (a) Indebtedness
of the Company owed or owing to any Subsidiary or Joint Venture of the Company
or any Officer, director or employee of the Company or any Subsidiary or Joint
Venture of the Company, (b) Indebtedness to trade creditors or (c) any liability
for taxes owed or owing by the Company.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency. A Joint Venture shall not be a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
(S)(S) 77aaa-77bbbb), as in effect on the date hereof.
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"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the Person, not in its individual capacity but solely
as Trustee, named as such above until a successor replaces it in accordance with
the applicable provisions of this Indenture, and thereafter "Trustee" means each
Person who is then a Trustee hereunder, and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
means the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions," which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien or foreign fiduciary of an estate or trust, or a foreign
partnership.
"U.S. Government Obligations" means Government Obligations with
respect to Securities payable in Dollars.
SECTION 1.02 Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Bankruptcy Custodian"..................................... 6.01
"covenant defeasance"...................................... 8.01
"Conversion Event"......................................... 6.01
"Event of Default"......................................... 6.01
"Exchange Rate"............................................ 2.11
"Judgment Currency"........................................ 6.10
"legal defeasance"......................................... 8.01
"mandatory sinking fund payment"........................... 3.09
"optional sinking fund payment"............................ 3.09
"Paying Agent"............................................. 2.05
"Payment Default".......................................... 10.02
"Payment Notice"........................................... 10.02
"Registrar"................................................ 2.05
"Required Currency"........................................ 6.10
"Successor"................................................ 5.01
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SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined
by a TIA reference to another statute or defined by an SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this Agreement to Articles and Sections are
references to the corresponding Articles and Sections in and of
this Indenture.
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ARTICLE II
THE SECURITIES
SECTION 2.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from the Securities all other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.12, 3.07 or 9.05);
(3) whether any Securities of the series are to be issuable initially
in temporary global form and whether any Securities of the series are to be
issuable in permanent global form, as Global Securities or otherwise, and,
if so, whether beneficial owners of interests in any such Global Security
may exchange such interests for Securities of such series and of like tenor
of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in
Section 2.17, and the initial Depositary for any Global Security or
Securities of such series;
(4) the manner in which any interest payable on a temporary Global
Security on any Interest Payment Date will be paid if other than in the
manner provided in Section 2.14;
(5) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether and
under what circumstances Additional Amounts with respect to such Securities
shall be payable, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable
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and the record date for the interest payable on any Securities on any
Interest Payment Date, or if other than provided herein, the Person to whom
any interest on Securities of the series shall be payable;
(7) the place or places where, subject to the provisions of Section
4.02, the principal, premium (if any), interest and any Additional Amounts
with respect to the Securities of the series shall be payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option,
if different from those set forth herein;
(9) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices (whether denominated in cash, securities
or otherwise) at which and the terms and conditions upon which Securities
of the series shall be redeemed, purchased or repaid in whole or in part
pursuant to such obligation;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which any Securities of that series shall be
issuable;
(11) if other than Dollars, the currency or currencies (including
composite currencies) or the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or
property of the Company or any other Person, in which payment of the
principal, premium (if any), interest and any Additional Amounts with
respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies (including composite currencies) other than that in which the
Securities are stated to be payable, the currency or currencies (including
composite currencies) in which payment of the principal, premium (if any),
interest and any Additional Amounts with respect to Securities of such
series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be
made;
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(13) if the amount of payments of principal, premium (if any),
interest and any Additional Amounts with respect to the Securities of the
series may be determined with reference to any commodities, currencies or
indices, values, rates or prices or any other index or formula, the manner
in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
6.02;
(15) any additional means of satisfaction and discharge of this
Indenture and any additional conditions or limitations to discharge with
respect to Securities of the series pursuant to Article VIII or any
modifications of or deletions from such conditions or limitations;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.01 or covenants of the Company set forth in
Article IV pertaining to the Securities of the series;
(17) any restrictions or other provisions with respect to the transfer
or exchange of Securities of the series, which may amend, supplement,
modify or supersede those contained in this Article II;
(18) if the Securities of the series are to be convertible into or
exchangeable for Capital Stock, other debt securities (including
Securities), warrants, other equity securities or any other securities or
property of the Company or any other Person, at the option of the Company
or the Holder or upon the occurrence of any condition or event, the terms
and conditions for such conversion or exchange;
(19) if the Securities of the series are to be entitled to the benefit
of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and
(20) any other terms of the series (which terms shall not be
prohibited by the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 2.03) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
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If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be set forth in an Officers'
Certificate or certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article X.
SECTION 2.02 Denominations.
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 2.01. In the absence of any
such provisions with respect to the Securities of any series, the Securities of
such series denominated in Dollars shall be issuable in denominations of $1,000
and any integral multiples thereof.
SECTION 2.03 Forms Generally.
The Securities of each series shall be in fully registered form and in
substantially such form or forms (including temporary or permanent global form)
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto. The Securities may have notations, legends or endorsements
required by law, securities exchange rule, the Company's certificate of
incorporation, bylaws or other similar governing documents, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). A copy of the
Board Resolution establishing the form or forms of Securities of any series
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.04 for the authentication and delivery of such
Securities.
The definitive Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially
the following form:
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"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_________________________, as Trustee
By: _____________________________________
Authorized Officer".
SECTION 2.04 Execution, Authentication, Delivery and Dating.
Two Officers of the Company shall sign the Securities on behalf of the
Company by manual or facsimile signature. The Company's seal, if any, shall be
impressed, affixed, imprinted or reproduced on the Securities and may be in
facsimile form.
If an Officer of the Company whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until authenticated by the manual
signature of an authorized signatory of the Trustee, which signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security has been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company delivers such Security to the Trustee for cancellation as
provided in Section 2.13 together with a written statement (which need not
comply with Section 11.05 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
The Trustee shall authenticate and deliver Securities of a series for
original issue upon a Company Order for the authentication and delivery of such
Securities or pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by Company Order. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated, the name or names of the initial
Holder or Holders and any other terms of the Securities of such series not
otherwise determined. If provided for in such procedures, such Company Order
may authorize (1) authentication and delivery of Securities of such series for
original issue from time to time, with certain terms (including, without
limitation, the Maturity dates or dates, original issue date or dates and
interest rate or rates) that differ from Security to Security and (2) may
authorize authentication and delivery
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pursuant to oral or electronic instructions from the Company or its duly
authorized agent, which instructions shall be promptly confirmed in writing.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Section 2.01, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in addition to the Company Order referred
to above and the other documents required by Section 11.04), and (subject to
Section 7.01) shall be fully protected in relying upon,
(a) an Officers' Certificate setting forth the Board Resolution and,
if applicable, an appropriate record of any action taken pursuant thereto,
as contemplated by the last paragraph of Section 2.01; and
(b) an Opinion of Counsel to the effect that:
(i) if the form of such Securities has been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such form has been established in conformity with the provisions of
this Indenture;
(ii) if the terms of such Securities have been established by or
pursuant to Board Resolution, as is permitted by Section 2.01, that
such terms have been established in conformity with the provisions of
this Indenture; and
(iii) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws in effect from time to time affecting the rights of creditors
generally, and the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
The Trustee shall not be required to authenticate such Securities if the
issuance of such Securities pursuant to this Indenture would affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
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Each Security shall be dated the date of its authentication.
SECTION 2.05 Registrar and Paying Agent.
The Company shall maintain an office or agency for each series of
Securities where Securities of such series may be presented for registration of
transfer or exchange ("Registrar") and an office or agency where Securities of
such series may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities of such series and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. The Company may change any Paying Agent or Registrar
without notice to any Holder. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
SECTION 2.06 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on or any Additional Amounts with
respect to Securities and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds disbursed.
Upon payment over to the Trustee and upon accounting for any funds disbursed,
the Paying Agent (if other than the Company or a Subsidiary of the Company)
shall have no further liability for the money. If the Company or a Subsidiary
of the Company acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
Each Paying Agent shall otherwise comply with TIA (S) 317(b).
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SECTION 2.07 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar with respect to a series of Securities, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date
with respect to such series of Securities, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders of such
series, and the Company shall otherwise comply with TIA (S) 312(a).
SECTION 2.08 Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to
Section 2.01:
When Securities of any series are presented to the Registrar with the
request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of the same series of
like tenor and of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met; provided, however, that the Securities presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instruction of transfer in form reasonably satisfactory
to the Registrar duly executed by the Holder thereof or by his attorney, duly
authorized in writing, on which instruction the Registrar can rely.
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To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's written
request and submission of the Securities or Global Securities. No service
charge shall be made to a Holder for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in accordance with the
provisions of Section 2.04. Notwithstanding any other provisions of this
Indenture to the contrary, the Company shall not be required to register the
transfer or exchange of (a) any Security selected for redemption in whole or in
part pursuant to Article III, except the unredeemed portion of any Security
being redeemed in part or (b) any Security during the period beginning 15
Business Days before the mailing of notice of any offer to repurchase Securities
of the series required pursuant to the terms thereof or of redemption of
Securities of a series to be redeemed and ending at the close of business on the
date of mailing.
SECTION 2.09 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the
Holder of a Security claims that the Security has been destroyed, lost or stolen
and the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of such Security, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series if the
Trustee's requirements are met. If any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company in
its discretion may, instead of issuing a new Security, pay such Security. If
required by the Trustee or the Company, such Holder must furnish an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge a Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder and those described in this Section 2.10 as
not outstanding.
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If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.11 Original Issue Discount, Foreign-Denominated and Treasury
Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, (a) the principal amount of an Original Issue Discount Security shall
be the principal amount thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof pursuant to Section
6.02, (b) the principal amount of a Security denominated in a foreign currency
shall be the Dollar equivalent, as determined by the Company by reference to the
noon buying rate in The City of New York for cable transfers for such currency,
as such rate is certified for customs purposes by the Federal Reserve Bank of
New York (the "Exchange Rate") on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent, as determined by the Company by reference to
the Exchange Rate on the date of original issuance of such Security, of the
amount determined as provided in (a) above), of such Security and (c) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded, except that, for
the purpose of determining whether the Trustee shall be protected in relying
upon any such direction, amendment, supplement, waiver or consent, only
Securities that the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12 Temporary Securities.
Until definitive Securities of any series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
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SECTION 2.13 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange,
payment or redemption or for credit against any sinking fund payment. The
Trustee shall cancel all Securities surrendered for registration of transfer,
exchange, payment, redemption, replacement or cancellation or for credit against
any sinking fund. Unless the Company shall direct in writing that canceled
Securities be returned to it, after written notice to the Company all canceled
Securities held by the Trustee shall be disposed of in accordance with the usual
disposal procedures of the Trustee, and the Trustee shall maintain a record of
their disposal. The Company may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Trustee for cancellation.
SECTION 2.14 Payments; Defaulted Interest.
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the record date next preceding the Interest Payment Date, even if
such Securities are canceled after such record date and on or before such
Interest Payment Date. The Holder must surrender this Security to a Paying
Agent to collect principal payments. Unless otherwise provided with respect to
the Securities of any series, the Company will pay the principal of, premium (if
any) on, and interest on and any Additional Amounts with respect to the
Securities in Dollars. Such amounts shall be payable at the offices of the
Trustee, provided that at the option of the Company, the Company may, however,
pay such amounts (1) by wire transfer with respect to Global Securities or (2)
by check payable in such money mailed to a Holder's registered address with
respect to any Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest on the defaulted interest, in each case at the rate provided in
the Securities and in Section 4.01. The Company may pay the defaulted interest
to the Persons who are Holders on a subsequent special record date. At least 15
days before any special record date selected by the Company, the Company (or the
Trustee, in the name of and at the expense of the Company upon 20 days' prior
written notice from the Company setting forth such record date and the interest
amount to be paid) shall mail to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
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SECTION 2.15 Persons Deemed Owners.
The Company, the Trustee, any Agent and any authenticating agent may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payments of principal of, premium (if any)
or interest on, or any Additional Amounts with respect to such Security and for
all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16 Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17 Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global
Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of
Section 2.01 and the provisions of Section 2.02, any such Global Security shall
represent such of the outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of outstanding
Securities represented thereby shall be made by the Trustee in such manner and
upon instructions given by such Person or Persons as shall be specified in such
Security or in a Company Order to be delivered to the Trustee pursuant to
Section 2.04. Subject to the provisions of Section 2.04 and, if applicable,
Section 2.12, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified in such Security or in the applicable Company Order. With respect to
the Securities of any series that are represented by a Global Security, the
Company authorizes the execution and delivery by the Trustee of a letter of
representations or other similar agreement or instrument in the form customarily
provided for by the Depositary appointed with respect to such Global Security.
Any Global Security may be deposited with the Depositary or its nominee, or may
remain in the custody of the Trustee pursuant to a FAST Balance Certificate
Agreement or similar agreement between the Trustee and the Depositary. If a
Company Order has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Security in
global form shall be in writing but need not comply with Section 11.05 and need
not be accompanied by an Opinion of Counsel.
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Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the
registered holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under this
Indenture or the Securities and (ii) nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee, from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided
pursuant to Section 2.01: Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in
a Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Security if, and only if,
either (1) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Security and a successor Depositary is not
appointed by the Company within 90 days of such notice, (2) an Event of Default
has occurred with respect to such series and is continuing and the Registrar has
received a request from the Depositary to issue Securities in lieu of all or a
portion of the Global Security (in which case the Company shall deliver
Securities within 30 days of such request) or (3) the Company determines not to
have the Securities represented by a Global Security.
In connection with any transfer of a portion of the beneficial
interest in a Global Security to beneficial owners pursuant to this Section
2.17, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee upon receipt of a
Company Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.
In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section 2.17, the Global Security shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner
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identified by the Depositary in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Securities of
authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities by the Depositary, or for maintaining, supervising or reviewing
any records of the Depositary relating to such Securities. Neither the Company
nor the Trustee shall be liable for any delay by the related Global Security
Holder or the Depositary in identifying the beneficial owners, and each such
Person may conclusively rely on, and shall be protected in relying on,
instructions from such Global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of
Section 2.04 shall apply to any Global Security if such Global Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Global Security together with written instructions (which need not comply with
Section 11.05 and need not be accompanied by an Opinion of Counsel) with regard
to the cancellation or reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless
otherwise specified as contemplated by Section 2.01, payment of principal of,
premium (if any) and interest on and any Additional Amounts with respect to any
Global Security shall be made to the Person or Persons specified therein.
ARTICLE III
REDEMPTION
SECTION 3.01 Applicability of Article.
Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 2.01 for Securities of any
series) in accordance with this Article III.
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SECTION 3.02 Notice to the Trustee.
If the Company elects to redeem Securities of any series pursuant to
this Indenture, it shall notify the Trustee of the Redemption Date and principal
amount of Securities of such series to be redeemed. The Company shall so notify
the Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) by delivering to the Trustee an Officers'
Certificate stating that such redemption will comply with the provisions of this
Indenture and of the Securities of such series. Any such notice may be canceled
at any time prior to the mailing of such notice of such redemption to any Holder
and shall thereupon be void and of no effect.
SECTION 3.03 Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities of
such series not previously called for redemption, pro rata, by lot or by such
other method as the Trustee shall deem fair and appropriate and that may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of global Securities of such series.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any of the Securities redeemed or to be redeemed only in part, to the portion of
the principal amount thereof which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such Holder
appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed
and shall state:
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(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the
principal amount thereof to be redeemed and that on and after the
Redemption Date, upon surrender for cancellation of such Security to the
Paying Agent, a new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be issued without
charge to the Holder;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and the name and address of
the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such is
the case; and
(7) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Securities called for redemption shall be
paid at the Redemption Price, but interest installments whose maturity is on or
prior to such Redemption Date will be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the relevant record
dates specified pursuant to Section 2.01.
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SECTION 3.06 Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.06) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
and any Additional Amounts with respect to, the Securities or portions thereof
which are to be redeemed on that date, other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to such
Securities except for the right to receive the Redemption Price upon surrender
of such Securities. If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, premium, if any, any
Additional Amounts, and, to the extent lawful, accrued interest thereon shall,
until paid, bear interest from the Redemption Date at the rate specified
pursuant to Section 2.01 or provided in the Securities or, in the case of
Original Issue Discount Securities, such Securities' yield to maturity.
SECTION 3.07 Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security without service charge a new Security or
Securities, of the same series and of any authorized denomination as requested
by such Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed.
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SECTION 3.08 Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the
Company and any Affiliate of the Company may at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Such acquisition
shall not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery,
the indebtedness represented thereby shall be deemed to be satisfied. Section
2.13 shall apply to all Securities so delivered.
SECTION 3.09 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.10. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.
SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities.
The Company may deliver outstanding Securities of a series (other than
any previously called for redemption) and may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
series of Securities; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
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SECTION 3.11 Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 3.10 and will also deliver to the Trustee any Securities to be so
delivered. Failure of the Company to timely deliver such Officers' Certificate
and Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute the election of the Company (i) that the mandatory
sinking fund payment for such series due on the next succeeding sinking fund
payment date shall be paid entirely in cash without the option to deliver or
credit Securities of such series in respect thereof and (ii) that the Company
will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $100,000 (or the Dollar equivalent thereof based on the applicable
Exchange Rate on the date of original issue of the applicable Securities) or a
lesser sum if the Company shall so request with respect to the Securities of any
particular series, such cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof
as aforesaid) or less and the Issuer makes no such request then it shall be
carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof
as aforesaid) is available. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.03 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.04. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.05, 3.06 and 3.07.
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ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities of each series on
the dates and in the manner provided in the Securities of such series and in
this Indenture. Principal, premium, interest and any Additional Amounts shall
be considered paid on the date due if the Paying Agent, other than the Company
or a Subsidiary of the Company, holds on that date money deposited by the
Company designated for and sufficient to pay all principal, premium, interest
and any Additional Amounts then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium (if
any), at a rate equal to the then applicable interest rate on the Securities to
the extent lawful; and it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and any Additional Amount (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency (which may be an office of the Trustee, the
Registrar or the Paying Agent) where Securities of that series may be presented
for registration of transfer or exchange, where Securities of that series may be
presented for payment and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof, is located at ____________________. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency
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in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 4.03 SEC Reports; Financial Statements.
(a) The Company shall file with the Trustee, within 15 days after it
files the same with the SEC, copies of the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company shall also comply with the provisions of TIA (S) 314(a).
(b) If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule 144A
Securities and prospective purchasers of Rule 144A Securities designated by the
Holders of Rule 144A Securities, promptly upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) promulgated under the
Securities Act of 1933, as amended.
SECTION 4.04 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company, a statement signed by two Officers
of the Company, which need not constitute an Officers' Certificate, complying
with TIA (S) 314(a)(4) and stating that in the course of performance by the
signing Officers of the Company of their duties as such Officers of the Company
they would normally obtain knowledge of the keeping, observing, performing and
fulfilling by the Company of its obligations under this Indenture, and further
stating, as to each such Officer signing such statement, that to the best of his
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge and what action the
Company is taking or proposes to take with respect thereto).
(b) The Company shall, so long as Securities of any series are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default under this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
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SECTION 4.05 Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership and other existence of each of its
Subsidiaries and all rights (charter and statutory) and franchises of the
Company and its Subsidiaries, provided that the Company shall not be required to
preserve the corporate existence of any Subsidiary of the Company or any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole and that the loss thereof
would not have a material adverse effect on the business, prospects, assets or
financial condition of the Company and its Subsidiaries taken as a whole and
would not have any material adverse effect on the payment and performance of the
obligations of the Company under the Securities and this Indenture.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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SECTION 4.07 Additional Amounts.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of such
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section 4.07 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Unless otherwise provided pursuant to Section 2.01 with respect to
Securities of any series: If the Securities of a series provide for the payment
of Additional Amounts, at least ten days prior to the first Interest Payment
Date with respect to that series of Securities (or if the Securities of that
series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least ten days prior to
each date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
who are United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of that
series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities and the Company will pay to such
Paying Agent the Additional Amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for and to hold them
harmless against any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 4.07.
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ARTICLE V
SUCCESSORS
SECTION 5.01 Limitations on Mergers and Consolidations.
The Company shall not, in any transaction or series of transactions,
consolidate with or merge into any Person, or sell, lease, convey, transfer or
otherwise dispose of all or substantially all of its assets to any Person,
unless:
(1) either (a) the Company shall be the continuing corporation or (b)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged, or to which such sale, lease, conveyance,
transfer or other disposition shall be made (collectively, the
"Successor"), is organized and validly existing under the laws of the
United States, any political subdivision thereof or any State thereof or
the District of Columbia, and expressly assumes by supplemental indenture
the due and punctual payment of the principal of (and premium, if any) and
interest on and Additional Amounts with respect to all the Securities and
the performance of the Company's covenants and obligations under this
Indenture and the Securities;
(2) immediately after giving effect to such transaction or series of
transactions, no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the transaction and such
supplemental indenture comply with this Indenture.
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger of the Company or any sale, lease,
conveyance, transfer or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01, the Successor formed by
such consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture and the Securities with the same effect as if such
Successor had been named as the Company herein and the predecessor Company, in
the case of a sale, conveyance, transfer or other disposition, shall be released
from all obligations under this Indenture and the Securities.
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ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
Unless either inapplicable to a particular series or specifically
deleted or modified in or pursuant to the supplemental indenture or Board
Resolution establishing such series of Securities or in the form of Security for
such series, an "Event of Default," wherever used herein with respect to
Securities of any series, occurs if:
(1) the Company defaults in the payment of interest on or any
Additional Amounts with respect to any Security of that series when the
same becomes due and payable and such default continues for a period of 30
days;
(2) the Company defaults in the payment of (A) the principal of
any Security of that series at its Maturity or (B) premium (if any) on any
Security of that series when the same becomes due and payable;
(3) the Company defaults in the deposit of any sinking fund
payment, when and as due by the terms of a Security of that series, and
such default continues for a period of 30 days;
(4) the Company fails to comply with any of its other covenants
or agreements in, or provisions of, the Securities of such series or this
Indenture (other than an agreement, covenant or provision that has
expressly been included in this Indenture solely for the benefit of one or
more series of Securities other than that series) which shall not have been
remedied within the specified period after written notice, as specified in
the last paragraph of this Section 6.01;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, or
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(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that remains unstayed and in effect for 90 days
and that:
(A) is for relief against the Company as debtor in an involuntary
case,
(B) appoints a Bankruptcy Custodian of the Company or a
Bankruptcy Custodian for all or substantially all of the property of
the Company, or
(C) orders the liquidation of the Company; or
(7) any other Event of Default provided with respect to
Securities of that series occurs.
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Trustee shall not be deemed to know or have notice of a Default
unless a Trust Officer at the Corporate Trust Office of the Trustee receives
written notice at the Corporate Trust Office of the Trustee of such Default with
specific reference to such Default.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the
principal of, premium or interest on or Additional Amounts with respect to any
Security is payable in a currency or currencies (including a composite currency)
other than Dollars and such currency or currencies are not available to the
Company for making payment thereof due to the imposition of exchange controls or
other circumstances beyond the control of the Company (a "Conversion Event"),
the Company will be entitled to satisfy its obligations to Holders of the
Securities by making such payment in Dollars in an amount equal to the Dollar
equivalent of the amount payable in such other currency, as determined by the
Company by reference to the Exchange Rate on the date of such payment, or, if
such rate is not then available, on the basis of the most recently available
Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01,
any payment made under such circumstances in Dollars where the required payment
is in a currency other than Dollars will not constitute an Event of Default
under this Indenture.
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Promptly after the occurrence of a Conversion Event, the Company shall
give written notice thereof to the Trustee; and the Trustee, promptly after
receipt of such notice, shall give notice thereof in the manner provided in
Section 11.02 to the Holders. Promptly after the making of any payment in
Dollars as a result of a Conversion Event, the Company shall give notice in the
manner provided in Section 11.02 to the Holders, setting forth the applicable
Exchange Rate and describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the then outstanding Securities of the series
affected by such Default (or, in the case of a Default under clause (4) of this
Section 6.01, if outstanding Securities of other series are affected by such
Default, then at least 25% in principal amount of the then outstanding
Securities so affected) notify the Company and the Trustee, of the Default, and
the Company fails to cure the Default within 90 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default."
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SECTION 6.02 Acceleration.
If an Event of Default with respect to any Securities of any series at
the time outstanding (other than an Event of Default specified in clause (5) or
(6) of Section 6.01) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by such default (or, in the case
of an Event of Default described in clause (4) of Section 6.01, if outstanding
Securities of other series are affected by such Default, then at least 25% in
principal amount of all of the then outstanding Securities so affected) by
notice to the Company and the Trustee, may declare the principal of (or, if any
such Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) and accrued
and unpaid interest on all then outstanding Securities of such series or of all
series, as the case may be, to be due and payable. Upon any such declaration the
amounts due and payable on the Securities shall be due and payable immediately.
If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof
occurs, such amounts shall ipso facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the then outstanding
Securities of the series affected by such default or all series, as the case may
be, by written notice to the Trustee may rescind an acceleration and its
consequences (other than nonpayment of principal of or premium or interest on or
any Additional Amounts with respect to the Securities) if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
with respect to Securities of that series (or of all series, as the case may be)
have been cured or waived, except nonpayment of principal, premium, interest or
any Additional Amounts that has become due solely because of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, or premium,
if any, or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
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SECTION 6.04 Waiver of Existing Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities of any series or of all
series (acting as one class) by notice to the Trustee may waive an existing or
past Default or Event of Default with respect to such series or all series, as
the case may be, and its consequences (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or all
series or a solicitation of consents in respect of Securities of such series or
all series, provided that in each case such offer or solicitation is made to all
Holders of then outstanding Securities of such series or all series (but the
terms of such offer or solicitation may vary from series to series)), except (1)
a continuing Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on or any Additional Amounts with respect to any
Security or (2) a continued Default in respect of a provision that under Section
9.02 cannot be amended or supplemented without the consent of each Holder
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
With respect to Securities of any series, the Holders of a majority in
principal amount of the then outstanding Securities of such series may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it
relating to or arising under an Event of Default described in clause (1), (2),
(3) or (7) of Section 6.01, and with respect to all Securities, the Holders of a
majority in principal amount of all the then outstanding Securities affected may
direct in writing the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it not relating to or arising under such an Event of Default. However, the
Trustee may refuse to follow any direction that conflicts with applicable law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking such action.
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SECTION 6.06 Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series
may pursue a remedy with respect to this Indenture or the Securities of such
series only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities of such series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities of that series do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of and premium, if any,
and interest on and any Additional Amounts with respect to the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
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SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
amount of principal, premium (if any), and interest on and any Additional
Amounts remaining unpaid on the Securities of the series affected by the Event
of Default, and interest on overdue principal and premium, if any, and, to the
extent lawful, interest on overdue interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents and to take such actions, including participating as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company or its creditors or properties and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties which the Holders of the Securities may
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
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SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, subject
to Article X, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities in
respect of which or for the benefit of which such money has been collected,
for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium (if any),
interest and any Additional Amounts, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix record
dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining a judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of, premium (if any) or interest
on or Additional Amounts with respect to the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the New York
Business Day next preceding that on which final judgment is given. Neither the
Company nor the Trustee shall be liable for any shortfall nor shall it benefit
from any windfall in payments to Holders of Securities under this Section 6.10
caused by a change in exchange rates between the time the amount of a judgment
against it is calculated as above and the time the Trustee converts the Judgment
Currency into the Required Currency to make payments under this Section to
Holders of Securities, but payment of such judgment shall discharge all amounts
owed by the Company on the claim or claims underlying such judgment.
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SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine such certificates and opinions to determine
whether, on their face, they appear to conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to the
provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee may refuse to perform
any duty or exercise any right or power unless it receives indemnity reasonably
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law. All money received by the Trustee shall, until applied
as herein provided, be held in trust for the payment of the principal of,
premium (if any) and interest on and Additional Amounts with respect to the
Securities.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
instruction, an Officers' Certificate or an Opinion of Counsel or both to be
provided. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such instruction, Officers' Certificate or
Opinion of Counsel. The Trustee may consult at the Company's expense with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
SECTION 7.03 May Hold Securities.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any of
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights and duties. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities or any money paid to the Company or upon
the Company's direction under any provision hereof, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee and it shall not be responsible for any statement or recital herein
or any statement in the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any
series occurs and is continuing and it is known to the Trustee, the Trustee
shall mail to Holders of Securities of such series a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium (if any) and
interest on and Additional Amounts or any sinking fund installment with respect
to the Securities of such series, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.
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SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year after the execution of
this Indenture, the Trustee shall mail to Holders of a series and the Company a
brief report dated as of such reporting date that complies with TIA (S) 313(a);
provided, however, that if no event described in TIA (S) 313(a) has occurred
within the twelve months preceding the reporting date with respect to a series,
no report need be transmitted to Holders of such series. The Trustee also shall
comply with TIA (S) 313(b). The Trustee shall also transmit by mail all reports
if and as required by TIA (S)(S) 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a
series of Securities shall be filed by the Company with the SEC and each
securities exchange, if any, on which the Securities of such series are listed.
The Company shall notify the Trustee if and when any series of Securities is
listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee upon
request for all reasonable disbursements, advances and expenses incurred by it.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company hereby indemnifies the Trustee against any loss, liability
or expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company shall not be obligated to reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the payment obligations of the Company in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
premium (if any) and interest on and any Additional Amounts with respect to
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Securities of series. Such lien and the indemnity obligation under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to
the Securities of one or more series by so notifying the Company. The Holders
of a majority in principal amount of the then outstanding Securities of any
series may remove the Trustee with respect to the Securities of such series by
so notifying the Trustee and the Company. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of one or more
series, the Company shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). Within one year after
the successor Trustee with respect to the Securities of any series takes office,
the Holders of a majority in principal amount of the Securities of such series
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee with respect to the Securities of any series
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the then outstanding Securities of such series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
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If the Trustee with respect to the Securities of a series fails to
comply with Section 7.10, any Holder of Securities of such series may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the Securities of such
series.
In case of the appointment of a successor Trustee with respect to all
Securities, each such successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
(but not all) series shall execute and deliver an indenture supplemental hereto
in which each successor Trustee shall accept such appointment and that (1) shall
confer to each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall confirm that all the
rights, powers and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee and (3) shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee.
Nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, and each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee. Upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor Trustee
shall have all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates. On request of the Company or any successor
Trustee, such retiring Trustee shall transfer to such successor Trustee all
property held by such retiring Trustee as Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
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Notwithstanding replacement of the Trustee or Trustees pursuant to
this Section 7.08, the obligations of the Company under Section 7.07 shall
continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09 Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee; provided, however, that in the case of a
transfer of all or substantially all of its corporate trust business to another
corporation, the transferee corporation expressly assumes all of the Trustee's
liabilities hereunder.
In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia and authorized under such laws to
exercise corporate trust power, shall be subject to supervision or examination
by Federal or State (or the District of Columbia) authority and shall have, or
be a Subsidiary of a bank or bank holding company having, a combined capital and
surplus of at least $50 million as set forth in its most recent published annual
report of condition.
The Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is
subject to and shall comply with the provisions of TIA (S) 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA (S) 310(b).
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SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to and shall comply with the provisions of TIA
(S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A
Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to
the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect with respect to
the Securities of a series (except that the Company's obligations under Section
7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the
rights, powers, protections and privileges accorded the Trustee under Article
VII shall survive), and the Trustee, on demand of the Company, shall execute
proper instruments acknowledging the satisfaction and discharge of this
Indenture with respect to the Securities of such series, when:
(1) either
(A) all outstanding Securities of such series theretofore
authenticated and issued (other than destroyed, lost or stolen
Securities that have been replaced or paid) have been delivered to the
Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore
delivered to the Trustee for cancellation:
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity
within one year, or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and, in the case of clause (i), (ii) or (iii) above, the Company has
irrevocably deposited or caused to be deposited with the Trustee as
funds (immediately available to the Holders in the case of clause (i))
in trust for such purpose (x) cash in an amount, or (y) U.S.
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Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash in
an amount or (z) a combination thereof, which will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge the entire indebtedness on the
Securities of such series for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or for principal, premium, if any, and interest to the
Stated Maturity or Redemption Date, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
2.01, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable
by it hereunder with respect to the Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with, together with an Opinion of Counsel to the same effect.
(b) Unless this Section 8.01(b) is specified as not being applicable
to Securities of a series as contemplated by Section 2.01, the Company may
terminate certain of its obligations under this Indenture ("covenant
defeasance") with respect to the Securities of a series if:
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of such
series, (i) money in the currency in which payment of the Securities of
such series is to be made in an amount, or (ii) Government Obligations with
respect to such series, maturing as to principal and interest at such times
and in such amounts as will insure the availability of money in the
currency in which payment of the Securities of such series is to be made in
an amount or (iii) a combination thereof, that is sufficient, in the
opinion (in the case of (ii) and (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay, without consideration of the reinvestment
of any such amounts and after payment of all taxes or other charges or
assessments in respect thereof payable by the Trustee, the principal of and
premium (if any) and interest on all Securities of such series on each date
that such principal, premium (if any) or interest is due and payable and
(at the Stated Maturity thereof or upon redemption as provided in Section
8.01(e)) to pay all other sums payable by it hereunder; provided that the
Trustee shall have been irrevocably instructed to apply such money and/or
the proceeds of such U.S. Government Obligations to the payment of said
principal, premium (if any) and interest with respect to the Securities of
such series as the same shall become due;
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(2) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent to satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit;
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel from a nationally recognized counsel acceptable to the Trustee or a
tax ruling to the effect that the Holders will not recognize income, gain
or loss for Federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.01(b) and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised;
(5) the Company has complied with any additional conditions specified
pursuant to Section 2.01 to be applicable to the discharge of Securities of
such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a
conflicting interest as defined in TIA (S) 310(b).
In such event, this Indenture shall cease to be of further effect
(except as set forth in this paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge under this Indenture. However, the Company's obligations in Sections
2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the
Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers,
protections and privileges accorded the Trustee under Article VII shall survive
until all Securities of such series are no longer outstanding. Thereafter, only
the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive with respect to Securities of such
series.
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After such irrevocable deposit made pursuant to this Section 8.01(b)
and satisfaction of the other conditions set forth herein, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture with respect to the Securities of such series except for
those surviving obligations specified above.
In order to have money available on a payment date to pay principal of
or premium (if any) or interest on the Securities, the Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money. Government Obligations shall
not be callable at the issuer's option.
(c) If the Company has previously complied or is concurrently
complying with Section 8.01(b) (other than any additional conditions specified
pursuant to Section 2.01 that are expressly applicable only to covenant
defeasance) with respect to Securities of a series, then, unless this Section
8.01(c) is specified as not being applicable to Securities of such series as
contemplated by Section 2.01, the Company may elect to be discharged ("legal
defeasance") from its obligations to make payments with respect to Securities of
such series, if:
(1) no Default or Event of Default under clauses (5) and (6) of
Section 6.01 hereof shall have occurred at any time during the period
ending on the 91st day after the date of deposit contemplated by Section
8.01(b) (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such
series as contemplated by Section 2.01, the Company has delivered to the
Trustee an Opinion of Counsel from a nationally recognized counsel
acceptable to the Trustee to the effect referred to in Section 8.01(b)(4)
with respect to such legal defeasance, which opinion is based on (i) a
private ruling of the Internal Revenue Service addressed to the Company,
(ii) a published ruling of the Internal Revenue Service or (iii) a change
in the applicable federal income tax law (including regulations) after the
date of this Indenture;
(3) the Company has complied with any other conditions specified
pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of such series pursuant to this Section 8.01(c); and
(4) the Company has delivered to the Trustee a Company Request
requesting such legal defeasance of the Securities of such series and an
Officers' Certificate stating that all conditions precedent to with respect
to such legal defeasance of the Securities of such series have been
complied with, together with an Opinion of Counsel to the same effect.
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In such event, the Company will be discharged from its obligations
under this Indenture and the Securities of such series to pay principal of,
premium (if any) and interest on, and Additional Amounts with respect to,
Securities of such series, the Company's obligations under Sections 4.01, 4.02
and 5.01 shall terminate with respect to such Securities, and the entire
indebtedness of the Company evidenced by such Securities shall be deemed paid
and discharged.
(d) If and to the extent additional or alternative means of
satisfaction, discharge or defeasance of Securities of a series are specified to
be applicable to such series as contemplated by Section 2.01, the Company may
terminate any or all of its obligations under this Indenture with respect to
Securities of a series and any or all of its obligations under the Securities of
such series if it fulfills such other means of satisfaction and discharge as may
be so specified, as contemplated by Section 2.01, to be applicable to the
Securities of such series.
(e) If Securities of any series subject to subsections (a), (b), (c)
or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the terms of the applicable trust
arrangement shall provide for such redemption, and the Company shall make such
arrangements as are reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
SECTION 8.02 Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and the Company
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 8.01 hereof. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium (if any)
and interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made. Money and securities held in
trust are not subject to Article X.
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SECTION 8.03 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or U.S. Government Obligations (or
proceeds therefrom) held by them at any time upon the written request of the
Company.
Subject to the requirements of any applicable abandoned property laws,
the Trustee and the Paying Agent shall pay to the Company upon written request
any money held by them for the payment of principal, premium (if any), interest
or any Additional Amounts that remains unclaimed for two years after the date
upon which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability of the Trustee and the Paying Agent with respect to such money
shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or
U.S. Government Obligations deposited with respect to Securities of any series
in accordance with Section 8.01 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the
Company under this Indenture with respect to the Securities of such series and
under the Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 hereof until such time as the
Trustee or the Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; provided, however, that
if the Company has made any payment of principal of, premium (if any) or
interest on or any Additional Amounts with respect to any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities or waive any provision hereof or thereof without the consent of
any Holder:
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(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to provide for the issuance of bearer
Securities (with or without coupons);
(4) to provide any security for any series of Securities or to add
guarantees of any series of Securities;
(5) to comply with any requirement in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series), or to surrender any right or power herein conferred upon the
Company;
(7) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(8) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no outstanding Security of any series created prior to the
execution of such amendment or supplemental indenture that is adversely
affected in any material respect by such change in or elimination of such
provision;
(9) to establish the form or terms of Securities of any series as
permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 8.01; provided,
however, that any such action shall not adversely affect the interest of
the Holders of Securities of such series or any other series of Securities
in any material respect; or
(11) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
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more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 7.08.
Upon the request of the Company, accompanied by a Board Resolution,
and upon receipt by the Trustee of the documents described in Section 9.06, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities of any one or more series or all series or a solicitation of
consents in respect of Securities of any one or more series or all series,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).
Upon the request of the Company, accompanied by a Board Resolution,
and upon the filing with the Trustee of evidence of the consent of the Holders
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of such
amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities of one or more series or of all series may waive compliance in a
particular instance by the Company with any provision of this Indenture with
respect to Securities of such series (including waivers obtained in connection
with a tender offer or exchange offer for Securities of such series or a
solicitation of consents in respect of Securities of such series, provided that
in each case such offer or solicitation is made to all Holders of then
outstanding Securities of such series (but the terms of such offer or
solicitation may vary from series to series)).
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However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of or premium on, or change the Stated
Maturity of, any Security;
(4) reduce the premium, if any, payable upon the redemption of any
Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Company to pay Additional Amounts
with respect to any Security;
(6) change the coin or currency or currencies (including composite
currencies) in which any Security or any premium, interest or Additional
Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any
payment of principal of, premium (if any) or interest on or any Additional
Amounts with respect to any Security pursuant to Sections 6.07 and 6.08,
except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of
Securities necessary to waive compliance with certain provisions of this
Indenture pursuant to Section 6.04 or 6.07 or make any change in this
sentence of Section 9.02;
(9) modify the provisions of this Indenture with respect to the
subordination of any Security in a manner adverse to the Holder thereof; or
(10) waive a continuing Default or Event of Default in the payment of
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of an issue of Senior
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Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Security
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities
shall comply in form and substance with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
(which need not comply with Section 316(c) of the TIA) for the purpose of
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determining the Holders entitled to consent to any amendment, supplement or
waiver or to take any other action under this Indenture. If a record date is
fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from Holders of the principal amount of Securities required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (9) of Section 9.02 hereof. In such case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security at
the request of the Company regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange
for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment or
supplement.
Securities of any series authenticated and delivered after the
execution of any amendment or supplement may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplement.
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SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplement, the Trustee shall be entitled to receive, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of
Counsel provided at the expense of the Company as conclusive evidence that such
amendment or supplement is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
ARTICLE X
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness.
The Company and each Holder of a Security, by his acceptance thereof,
agree that (a) the payment of the principal of, premium (if any) and interest on
and any Additional Amounts with respect to each and all the Securities and (b)
any other payment in respect of the Securities, including on account of the
acquisition or redemption of Securities by the Company, is subordinated, to the
extent and in the manner provided in this Article X, to the prior payment in
full of all Senior Indebtedness of the Company, whether outstanding at the date
of this Indenture or thereafter created, incurred, assumed or guaranteed, and
that these subordination provisions are for the benefit of the holders of Senior
Indebtedness.
This Article X shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
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SECTION 10.02 No Payment on Securities in Certain Circumstances.
(a) No payment shall be made by or on behalf of the Company on
account of the principal of, premium (if any) or interest on or any Additional
Amounts with respect to the Securities of any series or to acquire any of such
Securities (including any repurchases of such Securities pursuant to the
provisions thereof at the option of the Holder of such Securities) for cash or
property (other than Junior securities of the Company), or on account of any
redemption provisions of such Securities, in the event of default in payment of
any principal of, premium (if any) or interest on any Senior Indebtedness of the
Company when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise (a "Payment Default"),
unless and until such Payment Default has been cured or waived or otherwise has
ceased to exist.
(b) No payment shall be made by or on behalf of the Company on
account of the principal of, premium (if any) or interest on or any Additional
Amounts with respect to the Securities of any series or to acquire any of such
Securities (including any repurchases of such Securities pursuant to the
provisions thereof at the option of the Holder of such Securities) for cash or
property (other than Junior securities of the Company), or on account of the
redemption provisions of such Securities, in the event of any event of default
(other than a Payment Default) with respect to any Designated Senior
Indebtedness permitting the holders of such Designated Senior Indebtedness (or a
trustee or other representative on behalf of the holders thereof) to declare
such Designated Senior Indebtedness due and payable prior to the date on which
it would otherwise have become due and payable, upon written notice thereof to
the Company and the Trustee by any holders of Designated Senior Indebtedness (or
a trustee or other representative on behalf of the holders thereof) (the
"Payment Notice"), unless and until such event of default shall have been cured
or waived or otherwise has ceased to exist; provided, that such payments may not
be prevented pursuant to this Section 10.02(b) for more than 179 days after an
applicable Payment Notice has been received by the Trustee unless the Designated
Senior Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Indebtedness has been paid in full. No event of default that existed or
was continuing on the date of any Payment Notice (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Notice, and only one such Payment
Notice may be given in any 365-day period.
(c) In furtherance of the provisions of Section 10.01, in the event
that, notwithstanding the foregoing provisions of this Section 10.02, any
payment or distribution of assets of the Company (other than Junior securities
of the Company) shall be received by the Trustee or the Holders of Securities of
any series at a time when such payment or distribution was prohibited by the
provisions of this Section 10.02, then, unless such payment or distribution is
no longer prohibited by this Section 10.02, such payment or distribution
(subject to the provisions of Section 10.07) shall be received and held in trust
by the Trustee or such Holder or Paying Agent for the benefit of the holders of
Senior Indebtedness of the Company, and shall be paid or delivered by the
Trustee or such Holders or such Paying Agent, as the case may be, to the holders
of Senior Indebtedness of the Company remaining unpaid or unprovided for or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably, according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness.
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SECTION 10.03 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or similar proceeding or upon assignment for the benefit of
creditors:
(a) the holders of all Senior Indebtedness of the Company shall first
be entitled to receive payments in full before the Holders of Securities of
any series are entitled to receive any payment on account of the principal
of, premium (if any) or interest on or any Additional Amounts with respect
to such Securities (other than Junior securities of the Company);
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Junior
securities of the Company), to which the Holders of Securities of any
series or the Trustee on behalf of such Holders would be entitled, except
for the provisions of this Article X, shall be paid by the liquidating
trustee or agent or other Person making such a payment or distribution
directly to the holders of such Senior Indebtedness or their
representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full of all such Senior Indebtedness remaining unpaid after
giving effect to all concurrent payments and distributions to the holders
of such Senior Indebtedness; and
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(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior securities of the Company),
shall be received by the Trustee or the Holders of Securities of any series
or any Paying Agent (or, if the Company or any Affiliate of the Company is
acting as its own Paying Agent, money for any such payment or distribution
shall be segregated or held in trust) on account of the principal of,
premium (if any) or interest on or any Additional Amounts with respect to
the Securities of such series before all Senior Indebtedness of the Company
is paid in full, such payment or distribution (subject to the provisions of
Section 10.07) shall be received and held in trust by the Trustee or such
Holder or Paying Agent for the benefit of the holders of such Senior
Indebtedness, or their respective representatives, ratably according to the
respective amounts of such Senior Indebtedness held or represented by each,
to the extent necessary to make payment as provided herein of all such
Senior Indebtedness remaining unpaid after giving effect to all concurrent
payments and distributions and all provisions therefor to or for the
holders of such Senior Indebtedness, but only to the extent that as to any
holder of such Senior Indebtedness, as promptly as practical following
notice from the Trustee to the holders of such Senior Indebtedness that
such prohibited payment has been received by the Trustee, Holder(s) or
Paying Agent (or has been segregated as provided above), such holder (or a
representative therefor) notifies the Trustee of the amounts then due and
owing on such Senior Indebtedness, if any, held by such holder and only the
amounts specified in such notices to the Trustee shall be paid to the
holders of such Senior Indebtedness.
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SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of the Securities shall be subrogated
(to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article) to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full. For the purpose of such
subrogation, no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article X, which otherwise would have been made to such
Holders shall, as between the Company and such Holders, be deemed to be payment
by the Company or on account of such Senior Indebtedness, it being understood
that the provisions of this Article X are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article X
shall have been applied, pursuant to the provisions of this Article X, to the
payment of amounts payable under Senior Indebtedness of the Company, then such
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all amounts payable under
or in respect of such Senior Indebtedness in full.
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SECTION 10.05 Obligations of the Company Unconditional.
Nothing contained in this Article X or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and the
Holders of the Securities of any series, the obligation of the Company, which is
absolute and unconditional, to pay to such Holders the principal of, premium (if
any) and interest on and any Additional Amounts with respect to the Securities
of such series as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of such
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
X, of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Notwithstanding anything to the contrary in this Article X or elsewhere in this
Indenture or in the Securities, upon any distribution of assets of the Company
referred to in this Article X, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or to such Holders for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article X so long as
such court has been apprised of the provisions of, or the order, decree or
certificate makes reference to, the provisions of this Article X.
SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, shall be entitled in all respects conclusively to assume
that no such fact exists.
SECTION 10.07 Application by Trustee of Amounts Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Holders of the
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Securities of series for the benefit of which such amounts were deposited, and,
to the extent allocated for the payment of Securities of such series, shall not
be subject to the subordination provisions of this Article X. Otherwise, any
deposit of assets with the Trustee or the Paying Agent (whether or not in trust)
for the payment of principal of, premium (if any) or interest on or any
Additional Amounts with respect to any Securities shall be subject to the
provisions of Sections 10.01, 10.02, 10.03 and 10.04; provided that if prior to
two Business Days preceding the date on which by the terms of this Indenture any
such assets may become distributable for any purpose (including without
limitation, the payment of either principal of, premium (if any) or interest on
or any Additional Amounts with respect to any Security), the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 10.06, then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such date; and
provided further that nothing contained in this Article X shall prevent the
Company from making, or the Trustee from receiving or applying, any payment in
connection with the redemption of Securities if the first publication of notice
of such redemption (whether by mail or otherwise in accordance with this
Indenture) has been made, and the Trustee has received such payment from the
Company, prior to the occurrence of any of the contingencies specified in
Section 10.02 or 10.03.
SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article X shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders of the Securities.
SECTION 10.09 Trustee to Effectuate Subordination of Securities.
Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article X and to protect the rights of the Holders of the Securities
pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Securities
in the form required in said proceedings and cause said claim to be approved.
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If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness or
their representative is hereby authorized to have the right to file and is
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Indebtedness or their representative to
authorize or consent to or accept or adopt on behalf of any Holder of Securities
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Indebtedness or their representative to vote in respect of
the claim of any Holder of the Securities in any such proceeding.
SECTION 10.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article X in respect of any Senior Indebtedness at any
time held by it to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall be construed to deprive the Trustee of any
of its rights as such holder.
SECTION 10.11 Article X Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium
(if any) or interest on the Securities by reason of any provision of this
Article X shall not be construed as preventing the occurrence of a Default or an
Event of Default under Section 6.01 or in any way prevent the Holders of the
Securities from exercising any right hereunder other than the right to receive
payment on the Securities.
SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of the Securities or the
Company or any other Person, cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article X or
otherwise. Nothing in this Section 10.12 shall affect the obligation of any
other such Person to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their representative.
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SECTION 10.13 Article Applicable to Paying Agent.
In case at any time any Payment Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article X shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Payment Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that this Section 10.13 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of TIA (S) 318(c), the imposed duties shall
control.
SECTION 11.02 Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail (registered or certified, return receipt requested), telex, facsimile or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Kerry A. Galvin, Associate General Counsel
If to the Trustee:
______________________________
______________________________
______________________________
______________________________
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, postage prepaid, to the Holder's address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it, except in the case of notice to the Trustee, it is duly given only
when received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to
the Trustee or the Company by Holders, shall be in writing, except as otherwise
set forth herein.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 11.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
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SECTION 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee at the expense of the Company:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 11.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA
(S) 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or the Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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SECTION 11.07 Legal Holidays.
If a payment date is a Legal Holiday at a Place of Payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 11.08 No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of
the Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
SECTION 11.09 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any other Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.11 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 11.12 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the fullest extent permitted by applicable
law, not in any way be affected or impaired thereby.
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SECTION 11.13 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
71
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
LYONDELL CHEMICAL COMPANY
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
________________________________________________ ,
as Trustee
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
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Exhibit 4.3
================================================================================
LYONDELL CHEMICAL COMPANY
AND
THE FIRST NATIONAL BANK OF CHICAGO
AS TRUSTEE
----------------------
SUBORDINATED INDENTURE
DATED AS OF _______, _____
----------------------
SUBORDINATED DEBENTURES
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions
Section 1.01. Definitions............................................. 2
ARTICLE 2
Issue, Description, Terms, Execution Registration
and Exchange of Debentures
Section 2.01. Designation, Terms, Amount, Authentication and
Delivery of Debentures.................................. 7
Section 2.02. Form of Debenture and Trustee's Certificate............. 10
Section 2.03. Date and Denominations of Debentures and Provisions
for Payment of Principal, Premium and Interest.......... 10
Section 2.04. Execution of Debentures................................. 12
Section 2.05. Exchange of Debentures.................................. 14
Section 2.06. Temporary Debentures.................................... 15
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures......... 15
Section 2.08. Cancellation of Surrendered Debentures.................. 16
Section 2.09. Provisions of Indenture and Debentures for Sole
Benefit of Parties and Debentureholders................. 16
Section 2.10. Appointment of Authenticating Agent..................... 16
Section 2.11. Global Debentures....................................... 17
Section 2.12. CUSIP Numbers........................................... 19
ARTICLE 3
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. Redemption.............................................. 19
Section 3.02. Notice of Redemption.................................... 19
Section 3.03. Payment Upon Redemption................................. 20
Section 3.04. Sinking Funds for Debentures............................ 21
Section 3.05. Satisfaction of Sinking Fund Payments With Debentures... 21
Section 3.06. Redemption of Debentures for Sinking Fund............... 22
ARTICLE 4
Particular Covenants of the Company
Section 4.01. Payment of Principal of (and Premium, if any) and
Interest on Debentures.................................. 22
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Page
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Section 4.02. Maintenance of Office or Agent for Payment of
Debentures, Designation of Office or Agency for
Payment, Registration, Transfer and Exchange of
Debentures.............................................. 22
Section 4.03. Duties of Paying Agent; Company as Payment Agent;
and Holding Sums In Trust............................... 23
Section 4.04. Appointment to Fill Vacancy in Office of Trustee........ 24
ARTICLE 5
Debentureholders Lists and Reports by
the Company and the Trustee
Section 5.01. Company to Furnish Trustee Information as to
Names and Addresses of Debentureholders................. 24
Section 5.02. Trustee to Preserve Information as to Names and
Addresses of Debentureholders........................... 24
Section 5.03. Annual and Other Reports to Be Filed by the
Company With Trustee.................................... 26
Section 5.04. Trustee to Transmit Annual Report to Debentureholders... 27
ARTICLE 6
Remedies of the Trustee and
Debentureholders on Event of Default
Section 6.01. Events of Default Defined............................... 27
Section 6.02. Covenant of Company to Pay to Trustee Whole
Amount Due on Debentures on Default in Payment
of Interest or Principal (and Premiums, if any)......... 30
Section 6.03. Application of Moneys Collected by Trustee.............. 32
Section 6.04. Limitation on Suits by Holders of Debentures............ 32
Section 6.05. Remedies Cumulative; Delay or Omission in
Exercise of Rights Not Waiver of Default................ 33
Section 6.06. Rights of Holders of Majority in Principal Amount
of Debentures to Direct Trustee and to Waive Defaults... 33
Section 6.07. Trustee to Give Notice of Defaults Known To It,
But May Withhold in Certain Circumstances............... 34
Section 6.08. Requirements of an Undertaking to Pay Costs in
Certain Suits Under Indenture or Against Trustee........ 35
ii
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Page
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ARTICLE 7
Concerning the Trustee
Section 7.01. Upon Event of Default Occurring and Continuing,
Trustee Shall Exercise Powers Vested In It, and
Use Same Degree of Care and Skill In Their
Exercise, as Prudent Individual Would Use 35
Section 7.02. Certain Rights of the Trustee 37
Section 7.03. Trustee Not Liable for Recitals In Indenture or In
Debentures 39
Section 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures 39
Section 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest 39
Section 7.06. Trustee Entitled to Compensation, Reimbursement and
Indemnity 39
Section 7.07. Right of Trustee to Rely on Certificate of Officers of
Company Where No Other Evidence Specifically Prescribed 40
Section 7.08. Disqualification; Conflicting Interests 40
Section 7.09. Requirements for Eligibility of Trustee 41
Section 7.10. Resignation of Trustee and Appointment of Successor 41
Section 7.11. Acceptance by Successor to Trustee 43
Section 7.12. Successor to Trustee by Merger, Consolidation or
Succession to Business 44
Section 7.13. Preferential Collection of Claims Against the Company 44
ARTICLE 8
Concerning the Debentures
Section 8.01. Evidence of Action by Debentureholders 45
Section 8.02. Proof of Execution of Instruments and of Holding of
Debentures 45
Section 8.03. Who May Be Deemed Owners of Debentures 46
Section 8.04. Debentures Owned by the Company or Controlled or
Controlling Companies Disregarded for Certain Purposes 46
Section 8.05. Instruments Executed by Debentureholders Bind Future
Holders 46
ARTICLE 9
Supplemental Indentures
Section 9.01. Purposes for Which Supplemental Indenture May Be
Entered Into Without Consent of Debentureholders 47
Section 9.02. Modification of Indenture with Consent of Debentureholders 48
Section 9.03. Effect of Supplemental Indentures 49
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Page
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Section 9.04. Debentures May Bear Notation of Changes By
Supplemental Indentures 50
Section 9.05. Opinion of Counsel 50
ARTICLE 10
Consolidation, Merger, Sale or Conveyance
Section 10.01. Company May Consolidate, etc. on Certain Terms 50
Section 10.02. Successor Corporation Substituted 51
Section 10.03. Opinion of Counsel 51
ARTICLE 11
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 11.01. Satisfaction and Discharge of Indenture 51
Section 11.02. Application by Trustee of Funds Deposited For Payment
of Debentures 54
Section 11.03. Repayment of Moneys Held by the Paying Agent 54
Section 11.04. Repayment of Moneys Held by the Trustee 54
Section 11.05. Indemnification Relating to Governmental Obligations 54
ARTICLE 12
Immunity of Incorporators, Stockholders,
Officers and Directors
Section 12.01. Incorporators, Stockholders, Officers and Directors
of the Company Exempt From Individual Liability 55
ARTICLE 13
Miscellaneous Provisions
Section 13.01. Successors and Assigns of Company Bound by Indenture 55
Section 13.02. Acts of Board, Committee or Officer of Successor
Company Valid 55
Section 13.03. Surrender of Powers of the Company 55
Section 13.04. Required Notices or Demands May be Served by Mail 56
Section 13.05. Indenture and Debentures to Be Construed in Accordance
with Laws of the State of New York 56
Section 13.06. Officers' Certificate and Opinion of Counsel to be
Furnished Upon Application or Demands by Company;
Statements To Be Included In Each Certificate or
Opinion With Respect to Compliance With Condition
or Covenant 56
Section 13.07. Payments Due on Sundays or Holidays 57
Section 13.08. Provisions Required by Trust Indenture Act of 1939 to
Control 57
Section 13.09. Indenture May Be Executed by its Counterparts 57
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Page
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Section 13.10. Separability of Indenture Provisions 57
Section 13.11. Assignment by Company to a Subsidiary or Affiliate 57
Section 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of Preferred
Securities May Institute Legal Proceedings Against
the Company in Certain Cases 57
ARTICLE 14
Subordination of Debentures
Section 14.01. Agreement to Subordinate 58
Section 14.02. Default on Senior Indebtedness 58
Section 14.03. Liquidation; Dissolution; Bankruptcy 59
Section 14.04. Subrogation of Debentures 60
Section 14.05. Authorization by Debentureholders 61
Section 14.06. Notice to Trustee 61
Section 14.07. Trustee's Relation to Senior Indebtedness 62
Section 14.08. No Impairment to Subordination 63
Section 14.09. Article Applicable to Paying Agents 63
Section 14.10. Trust Moneys Not Subordinated 63
v
<PAGE>
THIS SUBORDINATED INDENTURE is dated as of the ____ day of ___________,
_____, between Lyondell Chemical Company, a corporation duly organized and
existing under the laws of the State of Delaware (hereinafter sometimes referred
to as the "Company"), and The First National Bank of Chicago, a national banking
association, as Trustee (hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured subordinated debentures (hereinafter referred to as the
"Debentures"), in an unlimited aggregate principal amount to be issued from time
to time in one or more series in accordance with the terms of this Indenture, as
registered Debentures without coupons, to be authenticated by the certificate of
the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be borne
by the Debentures (the "Certificate of Authentication") are to be substantially
in such forms as may be approved by the Board of Directors (as defined below) or
set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee in accordance with the terms of this Indenture, the valid, binding
and legal obligations of the Company, and to constitute a valid indenture and
agreement according to its terms, have been done and performed or will be done
and performed prior to the issuance of such Debentures, and the execution of
this Indenture has been and the issuance hereunder of the Debentures has been or
will be prior to issuance in all respects duly authorized, and the Company, in
the exercise of the legal right and power in it vested, executes this Indenture
and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures
are and are to be authenticated, issued and delivered, and in consideration of
the premises and of the acquisition and acceptance of the Debentures by the
holders thereof, the Company covenants and agrees with the Trustee, for the
equal and proportionate benefit (subject to the provisions of this Indenture) of
the respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
<PAGE>
ARTICLE 1
Definitions
Section 1.01. Definitions. The terms defined in this Section (except as
in this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended, or
which are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
instrument.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, no Trust to which
Debentures have been issued shall be deemed to be an Affiliate of the Company.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means an authenticating agent with respect to all or
any of the series of Debentures, as the case may be, appointed with respect to
all or any series of the Debentures, as the case may be, by the Trustee pursuant
to Section 2.10.
"Board of Directors" means the Board of Directors of the Company, or any
committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by the
secretary or an assistant secretary of the Company to have been adopted or
consented to by the Board of Directors and to be in full force and effect, and
delivered to the Trustee.
"Business Day", with respect to any series of Debentures, means any day
other than (i) a Saturday or Sunday or (ii) a day on which banking institutions
in the Borough of Manhattan, The City and State of New York, Chicago, Illinois
or Houston, Texas are authorized or obligated by law or executive order to
close.
"Certificate" means a certificate signed by the principal executive officer,
the principal financial officer or the principal accounting officer of the
Company. The Certificate need not comply with the provisions of Section 13.06.
"Common Securities" means the common undivided beneficial interests in the
assets of the applicable Lyondell Trust.
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"Company" means Lyondell Chemical Company, a corporation duly organized and
existing under the laws of the State of Delaware, and, subject to the provisions
of Article 10, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Indenture is located at One
First National Plaza, Suite 0120, Chicago, Illinois 60670-0120, Attention:
Corporate Trust Administration.
"Debenture" or "Debentures" means any Debenture or Debentures, as the case
may be, authenticated and delivered under this Indenture.
"Debenture Register" has the meaning assigned in Section 2.05(b).
"Debenture Registrar" has the meaning assigned in Section 2.05(b).
"Debentureholder", "holder of Debentures", "registered holder", or other
similar term, means the Person or Persons in whose name or names a particular
Debenture shall be registered on the books of the Company kept for the purpose
in accordance with the terms of this Indenture.
"Declaration of Trust" means the Amended and Restated Declaration of Trust
of a Lyondell Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01 hereof.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Depositary" means with respect to Debentures of any series, for which the
Company shall determine that such Debentures will be issued as one or more
Global Debentures, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.01 or 2.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" with respect to Debentures of a particular series means
any event specified in Section 6.01(a), continued for the period of time, if
any, and the giving of the notice, if any, therein designated.
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"Global Debenture" means, with respect to any series of Debentures, a
Debenture in the form prescribed in Section 2.11 executed by the Company and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.
"Governmental Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a) (2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Governmental Obligation or the specific payment of principal of
or interest on the Governmental Obligation evidenced by such depository receipt.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Indenture" means this instrument as originally executed, or, if amended or
supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date" when used with respect to any installment of
interest on a Debenture of a particular series means the date specified in such
Debenture or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
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"Lien" means, with respect to any property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
property. For purposes of this Indenture, the Company shall be deemed to own
subject to a Lien any property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such property.
"Lyondell Trust" means such statutory business trust created under the laws
of the State of Delaware specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01 hereof.
"Officers' Certificate" means a certificate signed by the Chief Executive
Officer, President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Controller or an Assistant Controller or the Secretary or an
Assistant Secretary of the Company, delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 13.06, if and
to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be counsel for the Company, a Lyondell Trust or the Trustee, which may
be an employee of the Company but not an employee of a Lyondell Trust or the
Trustee, and who shall be reasonably acceptable to the Trustee. Each such
opinion shall include the statements provided for in Section 13.06, if and to
the extent required by the provisions thereof.
"Outstanding", when used with reference to Debentures of any series, subject
to the provisions of Section 8.01, means, as of any particular time, all
Debentures of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Debentures theretofore cancelled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or which have previously been cancelled; (b) Debentures or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust for the holders of such Debentures by the Company
(if the Company shall act as its own paying agent); provided, however, that if
such Debentures or portions of such Debentures are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
3 provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and (c) Debentures paid pursuant to Section 2.07; and (d)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07;
provided, however, that in determining whether the holders of the requisite
principal amount of Outstanding Debentures are present at a meeting of holders
of Debentures for quorum purposes or have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment or
modification hereunder, Debentures held for the account of the Company, any of
its Subsidiaries or any of its Affiliates shall be disregarded and deemed not to
be Outstanding, except that in determining whether the Trustee shall be
protected in making such a determination or
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relying upon any such quorum, consent or vote, only Debentures which the Trustee
actually knows to be so owned shall be so disregarded.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" when used with respect to the Debentures of any series,
means the place or places where the principal of and any premium and interest on
the Debentures of that series are payable as specified as contemplated by
Section 2.01.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Preferred Securities" means the preferred undivided beneficial interests in
the assets of the applicable Lyondell Trust.
"Property Trustee" means the entity performing the function of the Property
Trustee under the applicable Declaration of Trust of a Lyondell Trust.
"Responsible Officer" when used with respect to the Trustee means any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Exchange" when used with respect to the Debentures of any series
which are held as trust assets of a Lyondell Trust pursuant to the Declaration
of Trust of such Lyondell Trust, means the distribution of the Debentures of
such series by such Lyondell Trust in exchange for the Preferred Securities and
Common Securities of such Lyondell Trust in dissolution of such Lyondell Trust
pursuant to the Declaration of Trust of such Lyondell Trust.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on all Indebtedness of the Company whether created, incurred or assumed
before, on or after the date of this Indenture; provided that such Senior
Indebtedness shall not include (i) Indebtedness of the Company that, when
incurred and without respect to any election
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under Section 1111(b) of Title 11, U.S. Code, was without recourse, and (ii) any
other Indebtedness of the Company which by the terms of the instrument creating
or evidencing the same is specifically designated as being subordinated to or
pari passu with the Debentures, and in particular the Debentures shall rank pari
passu with all other debt securities and Guarantees issued to any trust,
partnership or other entity affiliated with the Company which is a financing
vehicle of the Company in connection with an issuance of securities by such
financing entity, which securities are substantially similar to the Preferred
Securities.
"Subsidiary" means any corporation at least a majority of whose outstanding
voting stock shall at the time be owned, directly or indirectly, by the Company
or by one or more Subsidiaries or by the Company and one or more Subsidiaries.
For the purposes only of this definition of the term "Subsidiary", the term
"voting stock", as applied to the stock of any corporation, shall mean stock of
any class or classes having ordinary voting power for the election of a majority
of the directors of such corporation, other than stock having such power only by
reason of the occurrence of a contingency.
"Trade Payables" means, with respect to any Person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Trustee" means The First National Bank of Chicago, a national banking
association, and, subject to the provisions of Article 7, shall also include its
successors and assigns, and, if at any time there is more than one person acting
in such capacity hereunder, "Trustee" shall mean each such person. The term
"Trustee" as used with respect to a particular series of the Debentures shall
mean the trustee with respect to that series.
"Trust Indenture Act", subject to the provisions of Section 9.01 and 9.02,
means the Trust Indenture Act of 1939, as amended and in effect at the date of
execution of this Indenture.
ARTICLE 2
Issue, Description, Terms, Execution Registration and Exchange of Debentures
Section 2.01. Designation, Terms, Amount, Authentication and Delivery of
Debentures. The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
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The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Debentures of the series (which shall distinguish the
Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of that
series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of, other Debentures of that
series);
(3) the date or dates on which the principal of the Debentures of the
series is payable and the right to shorten, extend or defer such date or
dates;
(4) the rate or rates at which the Debentures of the series shall bear
interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the Interest
Payment Dates on which such interest will be payable or the manner of
determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend or defer the interest payment periods and
the duration of such extension;
(7) the period or periods within which, the price or prices at which, and
the terms and conditions upon which, Debentures of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Debentures
of the series pursuant to any sinking fund or analogous provisions
(including payments made in cash in anticipation of future sinking fund
obligations) or at the option of a holder thereof and the period or periods
within which, the price or prices at which, the currency or currencies
(including currency unit or units) in which and the terms and conditions
upon which, Debentures of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
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(9) any exchangeability, conversion or prepayment provisions of the
Debentures;
(10) the form of the Debentures of the series including the form of the
Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple thereof,
the denominations in which the Debentures of the series shall be issuable;
(12) whether the Debentures are issuable as one or more Global Debentures
and, in such case, the identity of the Depositary for such series, the form
of any legend or legends which shall be borne by any such Global Debentures
in addition to or in lieu of that set forth in Section 2.11 and any
circumstances in addition to or in lieu of those set forth in Section 2.11
in which any such Global Debentures may be exchanged in whole or in part
for Debentures registered, and any transfer of such Global Debentures in
whole or in part may be registered, in the name or names of Persons other
than the Depositary for such Global Debentures or a nominee thereof;
(13) if the Debentures of such series are to be deposited as trust assets
in a Lyondell Trust the name of the applicable Lyondell Trust (which shall
distinguish such statutory business trust from all other Lyondell Trusts)
into which the Debentures of such series are to be deposited as trust
assets and the date of its Declaration of Trust;
(14) the place or places where the principal of (and premium, if any) and
interest on the Debentures of such series shall be payable, the place or
places where the Debentures of such series may be presented for
registration of transfer or exchange, and the place or places where notices
and demands to or upon the Company in respect of the Debentures of such
series may be made;
(15) if other than U.S. dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Debentures of the series shall be payable, or in
which the Debentures of the series shall be denominated;
(16) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Debentures of such series;
(17) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the maturity thereof;
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(18) the additions or changes, if any, to this Indenture with respect to
the Debentures of such series as shall be necessary to permit or facilitate
the issuance of the Debentures of such series in bearer form, registrable
or not registrable as to principal, and with or without interest coupons;
(19) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Debentures of such series or the
manner in which such amounts will be determined;
(20) the appointment of any paying agent or agents for the Debentures of
such series;
(21) the relative degree, if any, to which the Debentures of such series
shall be senior to or be subordinated to other series of Debentures in
right of payment, whether such other series of Debentures are Outstanding
or not; and
(22) any and all other terms with respect to such series (which terms shall
not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to any
such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 2.02. Form of Debenture and Trustee's Certificate. The
Debentures of any series and the Trustee's certificate of authentication to be
borne by such Debentures shall be substantially of the tenor and purport as set
forth in one or more indentures supplemental hereto or as provided in a Board
Resolution and as set forth in an Officers' Certificate, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements typewritten, printed, lithographed or engraved thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which Debentures of that
series may be listed or traded, or to conform to usage.
Section 2.03. Date and Denominations of Debentures and Provisions for
Payment of Principal, Premium and Interest. The Debentures shall be issuable as
registered Debentures and in the denominations of $25 or any integral multiple
thereof, subject to Section 2.01(11). The Debentures of a particular series
shall bear interest
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payable on the dates and at the rate specified with respect to that series. The
principal of and the interest on the Debentures of any series, as well as any
premium thereon in case of redemption thereof prior to maturity, shall, subject
to Section 2.01(8) and (15), be payable in the coin or currency of the United
States of America which at the time is legal tender for public and private debt,
at the Place of Payment. Each Debenture shall be dated the date of its
authentication. Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months, subject to Section 2.01(5).
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Debenture will be paid upon presentation and surrender of such
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date for Debentures of the same
series (herein called "Defaulted Interest") shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by the Company, at
its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Debentures
to the persons in whose names such Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall
be fixed in the following manner: the Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Debenture and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall
not be more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record
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date therefor to be mailed, first class postage prepaid, to each
Debentureholder at his or her address as it appears in the Debenture
Register, not less than 10 days prior to such special record date. Notice
of the proposed payment of such Defaulted Interest and the special record
date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names such Debentures (or their
Predecessor Debentures) are registered on such special record date and
shall be no longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on
which such Debentures may be listed or traded, and upon such notice as may
be required by such exchange or automated quotation system, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Debentures pursuant
to Section 2.01 hereof, the term "regular record date" as used in this Section
with respect to a series of Debentures with respect to any Interest Payment Date
for such series shall mean either the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the fifteenth day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each Debenture of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
Section 2.04. Execution of Debentures. The Debentures shall, subject to
the provisions of Section 2.06, be printed on steel engraved borders or fully or
partially engraved, or legibly typed, as the proper officers of the Company may
determine, and shall be signed on behalf of the Company by the Chairman or Vice
Chairman of its Board of Directors or its Chief Executive Officer, President or
one of its Vice Presidents, under its corporate seal attested by its Secretary
or one of its Assistant Secretaries. The signature of the Chairman, Vice
Chairman, Chief Executive Officer, President or a Vice President and/or the
signature of the Secretary or an Assistant Secretary in attestation of the
corporate seal, upon the Debentures, may be in the form of a manual or facsimile
signature and may be imprinted or otherwise reproduced on the Debentures and for
that purpose the Company may use the manual or facsimile signature of any person
who shall
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have been a Chairman, Vice Chairman, Chief Executive Officer, President or Vice
President, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such person shall have ceased to be
the Chairman, Vice Chairman, Chief Executive Officer, President or a Vice
President, or the Secretary or an Assistant Secretary, of the Company, as the
case may be. The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of Authentication
substantially in the form established for such Debentures, executed manually by
an authorized signatory of the Trustee, or by any Authenticating Agent with
respect to such Debentures, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate executed by the
Trustee, or by any Authenticating Agent appointed by the Trustee with respect to
such Debentures, upon any Debenture executed by the Company shall be conclusive
evidence that the Debenture so authenticated has been duly authenticated and
made available for delivery hereunder and that the holder is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Debenture
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Debenture to the Trustee for
cancellation as provided in Section 2.08, for all purposes of this Indenture
such Debenture shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and its Treasurer or any Assistant Treasurer,
and the Trustee in accordance with such written order shall authenticate and
make available for delivery such Debentures. Each Debenture shall be dated the
date of its authentication by the Trustee.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debentures if the
issue of such Debentures pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Debentures and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
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Section 2.05. Exchange of Debentures.
(a) Debentures of any series may be exchanged upon presentation thereof at
the Place of Payment for other Debentures of such series of authorized
denominations, and for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
all as provided in this Section. In respect of any Debentures so surrendered for
exchange, the Company shall execute, the Trustee shall authenticate and such
office or agency shall make available for delivery in exchange therefor the
Debenture or Debentures of the same series which the Debentureholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate Trust
Office of the Trustee, the register maintained in such office and in any other
office or agency of the Company in a Place of Payment in which, subject to such
reasonable regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article provided and which
at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed by the Company (the "Debenture
Registrar"). The initial Debenture Registrar shall be the Trustee.
Upon surrender for transfer of any Debenture at the office or agency of the
Company in a Place of Payment, the Company shall execute and the Trustee shall
authenticate and deliver, in the name of the transferee or transferees one or
more new Debentures of the same series as the Debenture presented, of any
authorized denominations and of like tenor and principal amount.
All Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Debenture Registrar) by a written instrument or instruments
of transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered holder or by his duly authorized attorney in
writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, Section 3.03 (b) and Section 9.04 not involving any
transfer.
(d) The Company shall not be required (i) to issue, exchange or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Debentures and ending at the close of business on the day of such mailing, nor
(ii) to register the transfer of or exchange any Debentures of any series or
portions thereof called for redemption. The
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provisions of this Section 2.05 are, with respect to any Global Debenture,
subject to Section 2.11 hereof.
Section 2.06. Temporary Debentures. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Debentures in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company. Every temporary
Debenture of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures of such series. Without
unnecessary delay the Company will execute and will furnish definitive
Debentures of such series and thereupon any or all temporary Debentures of such
series may be surrendered in exchange therefor (without charge to the holders),
at a Place of Payment, and upon receipt of a written order of the Company signed
by its Chief Executive Officer, President or any Vice President and its
Treasurer or any Assistant Treasurer and the Trustee shall authenticate and
deliver in exchange for such temporary Debentures an equal aggregate principal
amount of definitive Debentures of such series, unless the Company advises the
Trustee to the effect that definitive Debentures need not be executed and
furnished until further notice from the Company. Until so exchanged, the
temporary Debentures of such series shall be entitled to the same benefits under
this Indenture as definitive Debentures of such series authenticated and
delivered hereunder.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures. In case any
temporary or definitive Debenture shall become mutilated or be destroyed, lost
or stolen, the Company (subject to the next succeeding sentence) shall execute,
and upon its written request the Trustee (subject as aforesaid) shall
authenticate and make available for delivery, a new Debenture of the same series
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Debenture, or in lieu of and in substitution for the Debenture
so destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate any such substituted Debenture and make
available for delivery the same upon the written request or authorization of any
officer of the Company. Upon the issuance of any substituted Debenture, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Debenture which has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debenture, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debenture) if the applicant
for such payment shall furnish to the Company and
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to the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.08. Cancellation of Surrendered Debentures. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the Trustee, shall be
cancelled by it, and no Debentures shall be issued in lieu thereof except as
expressly required or permitted by any of the provisions of this Indenture. On
written request of the Company, the Trustee shall deliver to the Company
cancelled Debentures held by the Trustee. If the Company shall otherwise acquire
any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
Section 2.09. Provisions of Indenture and Debentures for Sole Benefit of
Parties and Debentureholders. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any Person, other than
the parties hereto and the holders of the Debentures, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
Section 2.10. Appointment of Authenticating Agent. So long as any of the
Debentures of any series remain outstanding there may be an Authenticating Agent
for any or all such series of Debentures which the Trustee shall have the right
to appoint. Said Authenticating Agent shall be authorized to act on behalf of
the Trustee to authenticate Debentures of such series issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent for
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such series except for authentication upon original issuance or pursuant to
Section 2.07 hereof. Each Authenticating Agent shall be acceptable to the
Company and shall be a corporation which has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any
jurisdiction under which it is organized or in which it is doing business to
conduct a trust business, and which is otherwise authorized under such laws to
conduct such business and is subject to supervision or examination by Federal or
State authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time (and
upon request by the Company shall) terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Company. Upon resignation, termination or cessation of eligibility of any
Authenticating Agent, the Trustee may appoint an eligible successor
Authenticating Agent acceptable to the Company. Any successor Authenticating
Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.
Section 2.11. Global Debentures.
(a) If the Company shall establish pursuant to Section 2.01 that the
Debentures of a particular series are to be issued as one or more Global
Debentures, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and deliver, one or more Global Debentures which
(i) shall represent, and shall be denominated in an aggregate amount equal to
the aggregate principal amount of, all of the Outstanding Debentures of such
series, (ii) shall be registered in the name of the Depositary or its nominee,
(iii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear, subject to Section 2.01(12), a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Debenture may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Debenture
of a series may be transferred, in whole but not in part and in the manner
provided in Section 2.05, only to another nominee of the Depositary for such
series, or to a successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other applicable statute or
regulation and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives
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such notice or becomes aware of such condition, as the case may be, this Section
2.11 shall no longer be applicable to the Debentures of such series and the
Company will execute, and subject to Section 2.05, the Trustee will authenticate
and make available for delivery Debentures of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Debentures of such series in exchange for such Global Debentures. In addition,
the Company may at any time determine that the Debentures of any series shall no
longer be represented by one or more Global Debentures and that the provisions
of this Section 2.11 shall no longer apply to the Debentures of such series. In
such event the Company will execute and subject to Section 2.05, the Trustee,
upon receipt of an Officers' Certificate evidencing such determination by the
Company, will authenticate and deliver Debentures of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Debentures of such series in exchange for such Global Debentures. Upon the
exchange of Global Debentures for Debentures in definitive registered form
without coupons, in authorized denominations, the Global Debentures shall be
cancelled by the Trustee. Such Debentures in definitive registered form issued
in exchange for Global Debentures pursuant to this Section 2.11(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Debentures to the
Depositary for delivery to the persons in whose name such Debentures are so
registered.
(d) Debentures distributed to holders of Global Certificates (as defined in
the applicable Declaration of Trust) upon the dissolution of the applicable
Lyondell Trust shall be distributed in the form of one or more Global Debentures
registered in the name of the Depositary or its nominee, and deposited with the
Debenture Registrar, as custodian for the Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Debentures represented thereby (or such other accounts as they may
direct). Prior to the distribution of Debentures to holders of Global
Certificates upon the dissolution of the applicable Trust, the Company shall
designate the Depositary in writing to the Trustee. Debentures distributed to
holders of Certificates (as defined in the applicable Declaration of Trust),
other than Global Certificates, upon the dissolution of the applicable Lyondell
Trust shall not be issued in the form of a Global Debenture or any other form
intended to facilitate book-entry trading in beneficial interests in such
Debentures.
(e) The Depositary or its nominee, as the registered owner of a Global
Debenture, shall be the holder of such Global Debenture for all purposes under
this Indenture and the Debentures, and owners of beneficial interests in a
Global Debenture shall hold such interests pursuant to the applicable procedures
of the Depositary. Accordingly, any such owner's beneficial interest in a
Global Debenture shall be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its participants. None of the Company, the Trustee or the Debenture Registrar
shall have any liability in respect of any transfer effected by the Depositary.
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(f) The rights of owners of beneficial interests in a Global Debenture
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its participants.
Section 2.12. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers, and the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Debentureholders and no
representation shall be made as to the correctness of such numbers either as
printed on the Debentures or as contained in any notice of redemption or
exchange. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers of the Debentures.
ARTICLE 3
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. Redemption. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.
Section 3.02. Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem all
or, as the case may be, a portion of the Debentures of any series in accordance
with the right reserved so to do, it shall give notice of such redemption to the
Trustee at least 45 days in advance of the date fixed for redemption. The
Trustee shall then notify holders of the Debentures of such series who are to be
redeemed by mailing, first class postage prepaid, by a notice of such redemption
not less than 30 days and not more than 60 days before the date fixed for
redemption of that series to such holders at their last addresses as they shall
appear upon the Debenture Register. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the registered holder receives the notice. In any case, failure duly to
give such notice to the holder of any Debenture of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Debentures of
such series or any other series. In the case of any redemption of Debentures
prior to the expiration of any restriction on such redemption provided in the
terms of such Debentures or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with any
such restriction.
Each such notice of redemption shall identify the Debentures to be redeemed
(including CUSIP number) and shall specify: (i) the date fixed for redemption,
(ii) the redemption price at which Debentures of that series are to be redeemed,
(iii) the place or places where Debentures are to be surrendered for payment of
the redemption price, (iv)
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that payment of the redemption price will be made upon presentation and
surrender of such Debentures at such place or places, (v) that interest accrued
to the date fixed for redemption will be paid as specified in said notice, (vi)
that from and after said date interest will cease to accrue and (vii) that the
redemption is for a sinking fund, if such is the case. If less than all the
Debentures of a series are to be redeemed, the notice to the holders of
Debentures of that series to be redeemed in whole or in part shall specify the
particular Debentures to be so redeemed. In case any Debenture is to be redeemed
in part only, the notice which relates to such Debenture shall state the portion
of the principal amount thereof to be redeemed, and shall state that on and
after the redemption date, upon surrender of such Debenture, a new Debenture or
Debentures of such series in principal amount equal to the unredeemed portion
thereof will be issued.
(b) In the event of a partial redemption of a series of Debentures, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Debentures of the
series to be redeemed and the other information set forth in the immediately
preceding paragraph, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Debentures shall relate, in the case of any Debenture redeemed or to be redeemed
only in part, to the portion of the principal amount of such Debenture which has
been or is to be redeemed. If the Company shall so direct, Debentures
registered in the name of the Company, any Affiliate or any Subsidiary thereof
shall not be included in the Debentures selected for redemption.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its Chief Executive Officer, President or
any Vice President, instruct the Trustee or any paying agent to call all or any
part of the Debentures of a particular series for redemption and to give notice
of redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
Section 3.03. Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as
above provided and funds deposited as required, the Debentures or portions of
Debentures of the series to be redeemed specified in such notice shall become
due and payable on the date
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and at the place stated in such notice at the applicable redemption price,
together with interest accrued to, but excluding, the date fixed for redemption,
and interest on such Debentures or portions of Debentures, but excluding, shall
cease to accrue on and after the date fixed for redemption, unless the Company
shall default in the payment of such redemption price and accrued interest with
respect to any such Debenture or portion thereof. On presentation and surrender
of such Debentures on or after the date fixed for redemption at the place of
payment specified in the notice, said Debentures shall be paid and redeemed at
the applicable redemption price for such series, together with interest accrued
thereon to, but excluding, the date fixed for redemption (but if the date fixed
for redemption is an interest payment date, the interest installment payable on
such date shall be payable to the registered holder at the close of business on
the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
Section 3.04. Sinking Funds for Debentures. The provisions of Sections
3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement
of Debentures of a series, except as otherwise specified as contemplated by
Section 2.01 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debentures of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Debentures of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Debentures for any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of
Debentures of any series as provided for by the terms of Debentures of such
series.
Section 3.05. Satisfaction of Sinking Fund Payments With Debentures. The
Company (i) may deliver outstanding Debentures of a series (other than any
previously called for redemption) and (ii) may apply as a credit Debentures of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Debentures or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debentures, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debentures of such series required to be made pursuant to the terms of such
Debentures as provided for by the terms of such series; provided that such
Debentures have not been previously so credited. Such Debentures shall be
received and credited for such purpose by the Trustee at the
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redemption price specified in such Debentures for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 3.06. Redemption of Debentures for Sinking Fund. Not less than 45
days prior to each sinking fund payment date for any series of Debentures, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms for that series, the portion thereof, if any, which is to be satisfied by
delivering and crediting Debentures of that series pursuant to Section 3.05 and
the basis for such credit and will, together with such Officers' Certificate,
deliver to the Trustee any Debentures to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Debentures to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.02. Such notice having been duly given, the redemption of such
Debentures shall be made upon the terms and in the manner stated in Section
3.03.
ARTICLE 4
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as follows:
Section 4.01. Payment of Principal of (and Premium, if any) and Interest
on Debentures. The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that series
at the time and place and in the manner provided herein and established with
respect to such Debentures.
Section 4.02. Maintenance of Office or Agent for Payment of Debentures,
Designation of Office or Agency for Payment, Registration, Transfer and Exchange
of Debentures. So long as any series of the Debentures remains outstanding, the
Company agrees to maintain an office or agency in each Place of Payment, with
respect to each such series and at such other location or locations as may be
designated as provided in this Section 4.02, where (i) Debentures of that series
may be presented for payment, (ii) Debentures of that series may be presented as
hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Debentures of that
series and this Indenture may be given or served, such designation to continue
with respect to such office or agency until the Company shall, by written notice
signed by its Chief Executive Officer, President or a Vice President and
delivered to the Trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, notices and demands may be made or served
at the Corporate Trust Office of the Trustee,
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and the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
Section 4.03. Duties of Paying Agent; Company as Payment Agent; and
Holding Sums In Trust.
(a) If the Company shall appoint one or more paying agents for all or any
series of the Debentures, other than the Trustee, the Company will cause each
such paying agency to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent for the payment of
the principal of (and premium, if any) or interest on the Debentures of
that series (whether such sums have been paid to it by the Company or by
any other obligor of such Debentures) in trust for the benefit of the
persons entitled thereto;
(2) that it will give the Trustee written notice of any failure by the
Company (or by any other obligor of such Debentures) to make any payment of
the principal of (and premium, if any) or interest on the Debentures of
that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth in
this Indenture.
(b) If the Company shall act as its own paying agent with respect to any
series of the Debentures, it will on or before each due date of the principal of
(and premium, if any) or interest on Debentures of that series, set aside,
segregate and hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or interest so
becoming due on Debentures of that series until such sums shall be paid to such
persons or otherwise disposed of as herein provided and will promptly notify in
writing the Trustee of such action, or any failure (by it or any other obligor
on such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to 11:00 a.m.
New York City time on each due date of the principal of (and premium, if any) or
interest on any Debentures of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
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(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
Section 4.04. Appointment to Fill Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
ARTICLE 5
Debentureholders Lists and Reports by the Company and the Trustee
Section 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Debentureholders. The Company will furnish or cause to be
furnished to the Trustee (a) on each regular record date (as defined in Section
2.03) a list, in such form as the Trustee may reasonably require, of the names
and addresses of the holders of each series of Debentures as of such regular
record date, provided, that the Company shall not be obligated to furnish or
cause to be furnished such list at any time that the list shall not differ in
any respect from the most recent list furnished to the Trustee by the Company
and (b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
Section 5.02. Trustee to Preserve Information as to Names and Addresses of
Debentureholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as Debenture Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
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(c) In case three or more holders of Debentures of a series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures of such series or holders of all Debentures with respect to their
rights under this Indenture or under such Debentures, and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall within five Business Days after the receipt
of such application, at its election, either:
(1) afford to such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 5.02; or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise, the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
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(e) Each and every holder of the Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (c) of this Section 5.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(c).
Section 5.03. Annual and Other Reports to Be Filed by the Company With
Trustee.
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the Company is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13 or Section 15 (d) of the
Exchange Act; or, if the Company is not required to file information, documents
or reports pursuant to either of such sections, then to file with the Trustee
and the Commission in accordance with the rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations. Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein,
including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers' Certificates).
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
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(d) The Company covenants and agrees to furnish to the Trustee, on or
before May 15 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(e) The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default, an Officers' Certificate setting forth the details of such
Event of Default and the action which the Company proposes to take with respect
thereto.
Section 5.04. Trustee to Transmit Annual Report to Debentureholders.
(a) The Trustee shall transmit to Debentureholders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each May 15 following the date of this Indenture,
commencing May 15, ____, deliver to Debentureholders a brief report, dated as of
such May 15, which complies with the provisions of such Section 313(a).
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with the Company, with each stock
exchange or automated quotation system upon which any Debentures are listed (if
so listed) and also with the Commission. The Company agrees to notify the
Trustee when any Debentures become listed on any stock exchange or automated
quotation system and of any delisting thereof.
ARTICLE 6
Remedies of the Trustee and Debentureholders on Event of Default
Section 6.01. Events of Default Defined.
(a) Whenever used herein with respect to Debentures of a particular series,
"Event of Default" means any one or more of the following events which has
occurred and is continuing:
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(1) default in the payment of any installment of interest upon any of the
Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the
Company, in accordance with the terms of any Debentures of that series
established pursuant to Section 2.01 hereof, shall not constitute a default
in the payment of interest for this purpose;
(2) default (i) in the payment of the principal of (and premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable whether at maturity, upon redemption, by declaring or
otherwise, or (ii) in any payment required by any sinking or analogous fund
established with respect to that series, and in the case of this clause
(ii) only, continuance of such default for a period of 30 days;
(3) failure on the part of the Company duly to observe or perform, in any
material respect, any other of the covenants or agreements on the part of
the Company with respect to that series contained in such Debentures or
otherwise established with respect to that series of Debentures pursuant to
Section 2.01 hereof or contained in this Indenture (other than a covenant
or agreement which has been expressly included in this Indenture solely for
the benefit of one or more series of Debentures other than such series) for
a period of 90 days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a "Notice
of Default" hereunder, shall have been given to the Company by the Trustee,
by registered or certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Debentures of that
series at the time Outstanding;
(4) a decree or order by a court having jurisdiction in the premises shall
have been entered adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable Federal or State law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; or an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or liquidation of
its affairs, and such decree or order shall have remained in force
unvacated and unstayed for a period of 90 days;
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(5) the Company shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or any other similar
applicable Federal or State law, or shall consent to the filing of any such
petition, or shall consent to the appointment on the ground of insolvency
or bankruptcy of a receiver or custodian or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors; or
(6) any other Event of Default provided with respect to Debentures of that
series.
(b) In each and every such case, unless the principal of all the
Debentures of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debentures of that series then Outstanding hereunder, by notice in writing to
the Company (and to the Trustee if given by such Debentureholders), may declare
the principal of all the Debentures of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Indenture or in the
Debentures of that series or established with respect to that series pursuant to
Section 2.01 hereof to the contrary notwithstanding. Payment of principal and
interest on such Debentures shall remain subordinated to the extent provided in
Article 14 notwithstanding that such amount shall become immediately due and
payable as herein provided.
(c) Section 6.01(b), however, is subject to the condition that if, at any
time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06 then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures of that series then outstanding (subject to, in the case of any
series of Debentures held as trust assets of a Lyondell Trust and with respect
to which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such Lyondell
Trust as may be required under the Declaration of Trust of such Lyondell Trust),
by written notice
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to the Company and to the Trustee, may rescind and annul such declaration and
its consequences with respect to that series of Debentures; but no such
rescission and annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures of any
series, a Default with respect to the Debentures of such series shall have
occurred, the Company expressly acknowledges that under the circumstances set
forth in the applicable Declaration of Trust, any holder of Preferred Securities
of the applicable Lyondell Trust may, to the fullest extent permitted by law,
enforce directly against the Company the applicable Property Trustee's rights
hereunder. In furtherance of the foregoing and for the avoidance of any doubt,
the Company acknowledges that, under the circumstances described in the
applicable Declaration of Trust, any such holder of Preferred Securities, in its
own name, in the name of the applicable Lyondell Trust or in the name of the
holders of the Preferred Securities issued by such Lyondell Trust, may institute
or cause to be instituted a proceeding, including, without limitation, any suit
in equity, an action at law or other judicial or administrative proceeding, to
enforce the applicable Property Trustee's rights hereunder directly against the
Company as issuer of the applicable series of Debentures, and may prosecute such
proceeding to judgment or final decree, and enforce the same against the
Company.
Section 6.02. Covenant of Company to Pay to Trustee Whole Amount Due on
Debentures on Default in Payment of Interest or Principal (and Premiums, if
any).
(a) The Company covenants that (1) in case default shall be made in the
payment of any installment of interest on any of the Debentures of a series, or
any payment required by any sinking or analogous fund established with respect
to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 30 days, or (2) in case default
shall be made in the payment of the principal of (or premium, if any, on) any of
the Debentures of a series when the same shall have become due and payable,
whether upon maturity of the Debentures of a series or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures of that series,
the whole amount that then shall have become due and payable on all such
Debentures for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law and
without duplication of
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any other amounts paid by the Company or the applicable Lyondell Trust in
respect thereof) upon overdue installments of interest at the rate per annum
expressed in the Debentures of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures, or the
creditors or property of either, the Trustee shall have the power to intervene
in such proceedings and take any action therein that may be permitted by the
court and shall (except as may be otherwise provided by law) be entitled to file
such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of such
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of such
series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such
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rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
Section 6.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to this Article with respect to a particular
series of Debentures shall be applied in the order following, at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon presentation of the
several Debentures of that series, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article 14;
THIRD: To the payment of the amounts then due and unpaid upon Debentures
of such series for principal (and premium, if any) and interest, in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Debentures for principal (and premium, if
any) and interest, respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled thereto.
Section 6.04. Limitation on Suits by Holders of Debentures. No holder of
any Debenture of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to Debentures of
such series specifying such Event of Default, as hereinbefore provided, (ii) the
holders of not less than 25% in aggregate principal amount of the Debentures of
such series then outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee hereunder,
(iii) shall have offered to the Trustee indemnity satisfactory to it against the
costs, expenses and liabilities to be
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incurred therein or thereby, (iv) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have failed to institute any
such action, suit or proceeding and (v) during such 60 day period, the holders
of a majority in principal amount of the Debentures of that series do not give
the Trustee a direction inconsistent with the request; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture of such series with every other such taker and holder and Trustee,
that no one or more holders of Debentures of such series shall have any right in
any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures of such series. For the protection and enforcement of
the provisions of this Section, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights
Not Waiver of Default.
(a) All powers and remedies given by this Article 6 to the Trustee or to
the Debentureholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce performance or observance of the covenants
and agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
Section 6.06. Rights of Holders of Majority in Principal Amount of
Debentures to Direct Trustee and to Waive Defaults. The holders of a majority
in aggregate principal amount of the Debentures of any series at the time
Outstanding, determined in accordance with Section 8.04 (with, in the case of
any series of Debentures held as trust assets of a
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Lyondell Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such Lyondell Trust as may be required under the Declaration of
Trust of such Lyondell Trust), 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 with respect to such
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time Outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04 (with, in the case
of any series of Debentures held as trust assets of a Lyondell Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of holders of the Preferred Securities and the Common Securities of such
Lyondell Trust as may be required under the Declaration of Trust of such
Lyondell Trust), may on behalf of the holders of all of the Debentures of such
series waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Debentures of that series as
and when the same shall become due by the terms of such Debentures otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)), or a call for
redemption of Debentures of that series. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debentures of such series
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 6.07. Trustee to Give Notice of Defaults Known To It, But May
Withhold in Certain Circumstances. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such
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notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers, of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
holders of Debentures of that series; provided further, that in the case of any
default of the character specified in Section 6.01(a)(3) with respect to
Debentures of such series no such notice to the holders of the Debentures of
that series shall be given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default, except
(i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which a Responsible Officer of the Trustee shall have received
written notice.
Section 6.08. Requirements of an Undertaking to Pay Costs in Certain Suits
Under Indenture or Against Trustee. All parties to this Indenture agree, and
each holder of any Debentures by his or her acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding more than 10% in
aggregate principal amount of the outstanding Debentures of any series, or to
any suit instituted by any Debentureholder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Debenture of such
series, on or after the respective due dates expressed in such Debenture or
established pursuant to this Indenture.
ARTICLE 7
Concerning the Trustee
Section 7.01. Upon Event of Default Occurring and Continuing, Trustee
Shall Exercise Powers Vested In It, and Use Same Degree of Care and Skill In
Their Exercise, as Prudent Individual Would Use.
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to Debentures of a series and after the curing of all Events of Default
with respect to Debentures of that series which may have occurred, shall
undertake to perform with respect to Debentures of such series such duties and
only such duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture
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against the Trustee. In case an Event of Default with respect to Debentures of a
series has occurred (which has not been cured or waived), the Trustee shall
exercise with respect to Debentures of that series such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such Events
of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with respect to
Debentures of such series be determined solely by the express
provisions of this Indenture and the Trust Indenture Act, and the
Trustee shall not be liable with respect to Debentures of such series
except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Debentures of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
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(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the
Debentures of any series at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Debentures of that series;
(4) none of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it; and
(5) whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Article 7.
Section 7.02. Certain Rights of the Trustee. Except as otherwise provided
in Section 7.01:
(a) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the Chief Executive
Officer, President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer (unless
other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of
this
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Indenture, unless such Debentureholders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing herein
contained shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the
Debentures (which has not been cured or waived) to exercise with respect to
Debentures of that series such of the rights and powers vested in it by
this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs;
(e) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
nothing herein contained shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default with respect to a
series of the Debentures (which has not been cured or waived) to exercise
with respect to Debentures of that series such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs;
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security, or other papers or documents, unless requested in writing
so to do by the holders of not less than a majority in principal amount of
the outstanding Debentures of the particular series affected thereby
(determined as provided in Section 8.04); provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require indemnity satisfactory to it against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of
every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand;
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
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(h) The rights, privileges, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
Section 7.03. Trustee Not Liable for Recitals In Indenture or In
Debentures.
(a) The recitals contained herein and in the Debentures (other than the
Certificate of Authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by the
Company of any of the Debentures or of the proceeds of such Debentures, or for
the use or application of any moneys paid over by the Trustee in accordance with
any provision of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent other than the
Trustee.
Section 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures. The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 7.08 and 7.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, paying agent or Debenture
Registrar.
Section 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest. Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing to pay thereon.
Section 7.06. Trustee Entitled to Compensation, Reimbursement and
Indemnity.
(a) The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as the Company and
the Trustee shall from time to time agree in writing (which shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of
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the provisions of this Indenture (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee (or any predecessor Trustee and their officers, agents,
directors and employees) for, and to hold them harmless against, any and all
loss, liability, damage, claim or expense including taxes (other than taxes
based upon, measured by or determined by the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim (whether
asserted by the Company, any Debentureholder or any other Person) of liability
in the premises. The provisions of this Section 7.06 shall survive the
termination of this Indenture and the resignation or removal of the Trustee.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Debentures. When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(4) or Section 6.01(5), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
Section 7.07. Right of Trustee to Rely on Certificate of Officers of
Company Where No Other Evidence Specifically Prescribed. Except as otherwise
provided in Sections 7.01 and 7.02, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or omitting
to take any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the faith
thereof.
Section 7.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of said Section 310(b).
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Section 7.09. Requirements for Eligibility of Trustee. There shall at all
times be a Trustee with respect to the Debentures issued hereunder which shall
at all times be a corporation or banking association organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars, and subject to supervision or examination by
Federal, State, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as a Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
Section 7.10. Resignation of Trustee and Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debentures of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures of such series by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee with respect to Debentures of such series, or any Debentureholder of
that series who has been a bona fide holder of a Debenture or Debentures for at
least six months may, subject to the provisions of Section 6.08, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section 7.08
after written request therefor by the Company or by any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for at least six
months; or
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(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debentures and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of removal, the
Trustee so removed may petition, at the expense of the Company, any court
of competent jurisdiction for the appointment of a successor trustee with
respect to Debentures of such series, or any Debentureholder of that series
who has been a bona fide holder of a Debenture or Debentures for at least
six months may, subject to the provisions of Section 6.08, on behalf of
himself and all others similarly situated, petition any such court for the
removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee. If no
successor Trustee shall have been appointed and have accepted appointment within
10 days after the mailing of such notice of removal, the Trustee being removed
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee within respect to the Debentures of
such series.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
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Section 7.11. Acceptance by Successor to Trustee.
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debentures, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the
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Debentures of that or those series to which the appointment of such successor
trustee relates.
(c) Upon request of any such successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, power and trusts referred to in
paragraph (a) or (b) of this Section 7.11, as the case may be.
(d) No successor trustee shall accept its appointment unless at the time of
such acceptance such successor trustee shall be qualified and eligible under
this Article.
(e) Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the successor trustee shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register.
Section 7.12. Successor to Trustee by Merger, Consolidation or Succession
to Business. Any corporation or banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case any Debentures shall have been authenticated,
but not made available for delivery, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and make available for delivery the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
Section 7.13. Preferential Collection of Claims Against the Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship described in Section 311(b) of the Trust Indenture
Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent included therein as though such
resignation or removal, as the case may be, had not occurred.
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ARTICLE 8
Concerning the Debentures
Section 8.01. Evidence of Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a majority or specified percentage
in aggregate principal amount of the Debentures of a particular series may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such majority or specified
percentage of that series have joined therein may be evidenced by any instrument
or any number of instruments of similar tenor executed by such holders of
Debentures of that series in person or by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 8.02. Proof of Execution of Instruments and of Holding of
Debentures. Subject to the provisions of Sections 7.01 and 7.02, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any person of
any of the Debentures shall be sufficient if made in the following manner;
(a) The fact and date of the execution by any such person of any instrument
may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture Register
of such Debentures or by a certificate of the Debenture Registrar thereof.
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(c) The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
Section 8.03. Who May Be Deemed Owners of Debentures. Prior to the due
presentment for registration of transfer of any Debenture, the Company, the
Trustee, any paying agent and any Debenture Registrar may deem and treat the
person in whose name such Debenture shall be registered in the Debenture
Register as the absolute owner of such Debenture (whether or not such Debenture
shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Debenture and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
Section 8.04. Debentures Owned by the Company or Controlled or Controlling
Companies Disregarded for Certain Purposes. In determining whether the holders
of the requisite aggregate principal amount of Debentures of a particular series
have concurred in any direction, consent or waiver under this Indenture,
Debentures of that series which are owned by the Company or any other obligor on
the Debentures of that series or by any Subsidiary of the Company or of such
other obligor on the Debentures of that series shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures of such series which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Debentures so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
Section 8.05. Instruments Executed by Debentureholders Bind Future Holders.
At any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 8.01, of the taking of any action by the holders of the majority or
percentage in aggregate principal amount of the Debentures of a particular
series specified in this Indenture in connection with such action, any holder of
a Debenture of that series which is shown by the evidence to be included in the
Debentures the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Debenture. Except as
aforesaid any such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action
taken by the holders of the majority or percentage in
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aggregate principal amount of the Debentures of a particular series specified in
this Indenture in connection with such action shall be conclusively binding upon
the Company, the Trustee and the holders of all the Debentures of that series.
ARTICLE 9
Supplemental Indentures
Section 9.01. Purposes for Which Supplemental Indenture May Be Entered Into
Without Consent of Debentureholders. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as then
in effect), without the consent of the Debentureholders, for one or more of the
following purposes:
(a) to evidence the succession of another corporation or other entity to
the Company, and the assumption by any such successor of the obligations of
the Company contained herein or otherwise established with respect to the
Debentures;
(b) to add further covenants, restrictions, conditions or provisions for
the protection of the holders of the Debentures of all or any series as the
Board of Directors and the Trustee shall consider to be for the protection
of the holders of Debentures of all or any series, and to make the
occurrence, or the occurrence and continuance, of a default in any of such
additional covenants, restrictions, conditions or provisions a default or
an Event of Default with respect to such series permitting the enforcement
of all or any of the several remedies provided in this Indenture as herein
set forth; provided, however, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such default or may limit
the remedies available to the Trustee upon such default or may limit the
right of the holders of a majority in aggregate principal amount of the
Debentures of such series to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture as shall not be
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inconsistent with the provisions of this Indenture and shall not materially
adversely affect the interests of the holders of the Debentures of any
series;
(d) to add to, change or eliminate any of the provisions of this Indenture,
provided that any such addition, change or elimination shall become
effective only when there is no Debenture outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for
such purposes;
(f) to evidence and provide for the acceptance of appointment hereunder by
a successor trustee with respect to the Debentures;
(g) to qualify or maintain qualification of this Indenture under the Trust
Indenture Act;
(h) to establish the form or terms of Debentures of any series as permitted
by Section 201; or
(i) to make any addition, change or elimination of any provision of this
Indenture that does not adversely affect the rights of any Debentureholder
in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 9.02.
Section 9.02. Modification of Indenture with Consent of Debentureholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Debentures of each
series affected by such supplemental indenture or indentures at the time
outstanding (and, in the case of any series of Debentures held as trust assets
of a Lyondell Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred
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Securities and the Common Securities of such Lyondell Trust as may be required
under the Declaration of Trust of such Lyondell Trust), the Company and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures of such series under this Indenture;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Debentures of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof, without the consent
of the holder of each Debenture so affected or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Debenture (and, in the case of any series of Debentures held as trust assets of
a Lyondell Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such Lyondell Trust as may be required under the
Declaration of Trust of such Lyondell Trust) then outstanding and affected
thereby.
Upon the request of the Company, and upon the filing with the Trustee of
evidence of the consent of Debentureholders (and, in the case of any series of
Debentures held as trust assets of a Lyondell Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such Lyondell Trust as may be
required under the Declaration of Trust of such Lyondell Trust) required to
consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, this
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Indenture shall, with respect to such series, be and be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.04. Debentures May Bear Notation of Changes By Supplemental
Indentures. Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed or traded, as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
Section 9.05. Opinion of Counsel. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 9.
ARTICLE 10
Consolidation, Merger, Sale or Conveyance
Section 10.01. Company May Consolidate, etc. on Certain Terms. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
other Person, and the Company shall not permit any other Person to consolidate
with or merge into the Company, unless:
(a) either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consolidation or
into which the Company is merged or to which the properties and assets of
the Company substantially as an entity are transferred or leased shall be a
corporation, limited liability company, partnership or trust organized and
existing under the laws of the United States of America or any state
thereof or the District of Columbia and shall expressly assume, by an
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indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Debentures and this Indenture; and
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing.
Section 10.02. Successor Corporation Substituted. The successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer or lease is made shall succeed to and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein, and thereafter (except in the case of a lease to another Person) the
predecessor corporation shall be relieved of all obligations and covenants under
the Indenture and the Debentures and, in the event of such conveyance, or
transfer, any such predecessor corporation may be dissolved and liquidated.
Section 10.03. Opinion of Counsel. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE 11
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 11.01. Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Company shall have paid or caused to be paid the principal of,
premium, if any, and interest on all the Debentures of any series Outstanding
hereunder (other than Debentures of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.07) as
and when the same shall have become due and payable, or (b) the Company shall
have delivered to the Trustee for cancellation all Debentures of any series
theretofore authenticated (other than any Debentures of such series which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.07) or (c) (i) all the Debentures of any series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or by their terms will become due and payable within one year or are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) the Company shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Company in accordance with Section 11.04) or Government
Obligations, maturing as to principal and interest at such
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times and in such amounts as will insure the availability of cash, or a
combination thereof, sufficient in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal of, premium, if any, and
interest on all Debentures of such series on each date that such principal or
interest is due and payable and (B) any mandatory sinking fund payments on the
dates on which such payments are due and payable in accordance with the terms of
the Indenture and the Debentures of such series; and if, in any such case, the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect (except as
to (i) rights of registration of transfer and exchange of Debentures of such
series and the Company's right of optional redemption, if any, (ii) substitution
of mutilated, defaced, destroyed, lost or stolen Debentures, (iii) rights of
holders of Debentures to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Debentureholders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the holders of Debentures
of such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and (vi) the obligations of the
Company under Section 4.02) and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company, shall execute proper instruments acknowledging
such satisfaction of and discharging this Indenture; provided, that the rights
of holders of the Debentures to receive amounts in respect of principal of,
premium, if any, and interest on the Debentures held by them shall not be
delayed longer than required by then-applicable mandatory rules or policies of
any securities exchange or automated quotation system upon which the Debentures
are listed or traded. The Company agrees to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Debentures of such series.
(B) The following provisions shall apply to the Debentures of each series
unless specifically otherwise provided in a Board Resolution or indenture
supplemental hereto provided pursuant to Section 2.01. In addition to discharge
of the Indenture pursuant to the next preceding paragraph, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the Debentures
of a series on the date of the deposit referred to in subparagraph (a) below,
and the provisions of this Indenture with respect to the Debentures of such
series shall no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Debentures of such series and the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Debentures, (iii) rights of holders of Debentures to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the holders
of Debentures to receive mandatory sinking fund payments, if any, (iv) the
rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (vi)
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the obligations of the Company under Section 4.02) and the Trustee, at the
expense of the Company, shall at the Company's request, execute proper
instruments acknowledging the same, if
(a) with reference to this provision the Company has irrevocably deposited
or caused to be irrevocably deposited with the Trustee as trust funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the holders of the Debentures of such series (i) cash in an
amount, or (ii) Governmental Obligations maturing as to principal and
interest at such times and in such amounts as will insure the availability
of cash or (iii) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of, premium, if any, and interest on all Debentures of such
series on each date that such principal or interest is due and payable and
(B) any mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and the
Debentures of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of Counsel based
on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax law,
in either case to the effect that, and such opinion shall confirm that, the
holders of the Debentures of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided
for relating to the defeasance contemplated by this provision have been
complied with; and
(e) no event or condition shall exist that, pursuant to the provisions of
Section 14.02 or 14.03, would prevent the Company from making payments of
the principal of, premium, if any, or interest on the Debentures of such
series on the date of such deposit.
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Section 11.02. Application by Trustee of Funds Deposited For Payment of
Debentures. Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the Holders of the particular
Debentures of such series for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such money need not be segregated from other
funds except to the extent required by law.
Section 11.03. Repayment of Moneys Held by the Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Debentures
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Debentures shall, upon demand of
the Company, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
Section 11.04. Repayment of Moneys Held by the Trustee. Any moneys
deposited with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Debenture of any series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee for such series or such paying agent, and a holder of the Debentures of
such series shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment series, shall at the expense of the Company,
mail by first-class mail to holders of such Debentures at their addresses as
they shall appear on the Debenture Register, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than 30 days from
the date of such mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 11.05. Indemnification Relating to Governmental Obligations. The
Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the Governmental Obligations deposited pursuant
to Section 11.01 or the principal or interest received in respect of such
obligations.
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ARTICLE 12
Immunity of Incorporators, Stockholders, Officers and Directors
Section 12.01. Incorporators, Stockholders, Officers and Directors of the
Company Exempt From Individual Liability. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debenture, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present or future as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Debentures.
ARTICLE 13
Miscellaneous Provisions
Section 13.01. Successors and Assigns of Company Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
Section 13.02. Acts of Board, Committee or Officer of Successor Company
Valid. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
Section 13.03. Surrender of Powers of the Company. The Company by
instrument in writing executed by authority of two-thirds of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company and
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thereupon such power so surrendered shall terminate both as to the Company and
as to any successor corporation.
Section 13.04. Required Notices or Demands May be Served by Mail. Except
as otherwise expressly provided herein, any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Debentures to or on the Company may be given or
served by being deposited first class postage prepaid in a post office letterbox
addressed (until another address is filed in writing by the Company with the
Trustee), as follows: Lyondell Chemical Company, 1221 McKinney Street, Suite
1600, Houston, Texas 77010, Attention: Corporate Secretary. Any notice,
election, request or demand by the Company or any Debentureholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.
Section 13.05. Indenture and Debentures to Be Construed in Accordance with
Laws of the State of New York. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State
(without regard to principles of conflicts of laws thereof).
Section 13.06. Officers' Certificate and Opinion of Counsel to be
Furnished Upon Application or Demands by Company; Statements To Be Included In
Each Certificate or Opinion With Respect to Compliance With Condition or
Covenant.
(a) Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a
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statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Section 13.07. Payments Due on Sundays or Holidays. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an
Officers' Certificate, or established in one or more indentures supplemental to
the Indenture, in any case where the date of maturity of interest or principal
of any Debenture or the date of redemption of any Debenture shall not be a
Business Day, then payment of interest or principal (and premium, if any) may be
made on the next succeeding Business Day, with the same force and effect as if
made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.
Section 13.08. Provisions Required by Trust Indenture Act of 1939 to
Control. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.09. Indenture May Be Executed by its Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
Section 13.10. Separability of Indenture Provisions. In case any one or
more of the provisions contained in this Indenture or in the Debentures of any
series shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Indenture or of such Debentures, but this Indenture
and such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 13.11. Assignment by Company to a Subsidiary or Affiliate. The
Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a Subsidiary or an Affiliate; provided that,
in the event of any such assignment, the Company will remain jointly and
severally liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the parties thereto and
their respective successors and assigns. This Indenture may not otherwise be
assigned by the parties hereto (other than pursuant to Article 10).
Section 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of Preferred Securities May Institute
Legal Proceedings Against the Company in Certain Cases. The Company acknowledges
that, prior to a Security Exchange with respect to Debentures of any series held
as trust assets of a Lyondell Trust, if the Property Trustee of such Trust fails
to enforce its rights under this Indenture as the holder of the Debentures of a
series held as trust assets of such Trust, any holder of the Preferred
Securities of such Trust may in accordance with the provisions of the
Declaration of Trust of such Trust, to the fullest extent permitted by law,
institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under
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this Indenture without first instituting any legal proceedings against such
Property Trustee or any other Person; provided that, if an Event of Default has
occurred and is continuing and such event is attributed to the failure of the
Company to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities of such Lyondell Trust
may directly institute a proceeding for enforcement of payment to such holder of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
(a "Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Company shall be
subrogated to the rights of such holder of Preferred Securities to the extent of
any payment made by the Company to such holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the holders
of Preferred Securities of such Lyondell Trust shall not be able to exercise
directly any other remedy available to the holders of the Debentures.
ARTICLE 14
Subordination of Debentures
Section 14.01. Agreement to Subordinate. The Company covenants and
agrees, and each Debentureholder issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article 14; and each person holding any Debenture,
whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article 14 shall prevent the occurrence of any
Default or Event of Default hereunder.
Section 14.02. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness, or in the
event that the maturity of any Senior Indebtedness has been accelerated because
of a default, then, in either case, no payment shall be made by the Company with
respect to the principal (including redemption payments) of or premium, if any,
or interest on the Debentures until such default shall have been cured or waived
in writing or shall have ceased to exist or such Senior Indebtedness shall have
been discharged or paid in full.
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In the event of the acceleration of the maturity of the Debentures,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Debentures until the holders of all Senior Indebtedness outstanding at the time
of such acceleration shall receive payment in full of such Senior Indebtedness
(including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Debentureholder when such payment is prohibited
by the preceding paragraphs of this Section 14.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear.
Section 14.03. Liquidation; Dissolution; Bankruptcy. Upon any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any liquidation,
dissolution, winding up, receivership, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceedings of the Company, all amounts due or to become
due upon all Senior Indebtedness shall first be paid in full, in cash or cash
equivalents, or payment thereof provided for in accordance with its terms,
before any payment is made on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by the Debentures, and upon any such
liquidation, dissolution, winding up, receivership, reorganization, assignment,
marshaling or proceeding, any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to which the
Debentureholders or the Trustee under this Indenture would be entitled, except
for the provisions of this Article 14, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Debentureholders or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to pay
all Senior Indebtedness in full (including, without limitation, except to the
extent, if any, prohibited by mandatory provisions of law, post-petition
interest, in any such proceedings), after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution is made to the holders of the indebtedness evidenced by
the Debentures or to the Trustee under this Indenture.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee under this
59
<PAGE>
Indenture or the holders of the Debentures before all Senior Indebtedness is
paid in full or provision is made for such payment in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any of such Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of all Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness.
For purposes of this Article 14, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of arrangement, reorganization or readjustment, the
payment of which is subordinated (at least to the extent provided in this
Article 14 with respect to the Debentures) to the payment of all Senior
Indebtedness which may at the time be outstanding; provided, that (i) the Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
arrangement, reorganization or readjustment, and (ii) the rights of the holders
of the Senior Indebtedness are not, without the consent of such holders, altered
by such arrangement, reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided in Article 10 shall not be
deemed a dissolution, winding up, liquidation or reorganization for the purposes
of this Section 14.03 if such other Person shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article 10. Nothing in Section 14.02 or this Section 14.03 shall apply to
claims of, or payments to, the Trustee under or pursuant to Article 7, except as
provided therein. This Section 14.03 shall be subject to the further provisions
of Section 14.06.
Section 14.04. Subrogation of Debentures. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of, premium, if any,
and interest on the Debentures shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee on their behalf would be entitled except for the
provisions of this Article 14, and no payment over pursuant to the provisions of
this Article 14 to the holders of Senior Indebtedness by holders of the
Debentures or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness and the holders of the
Debentures, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness; and no payments or distributions of cash, property or
securities to or for the benefit of the Debentureholders pursuant to the
subrogation
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provisions of this Article, which would otherwise have been paid to the holders
of Senior Indebtedness shall be deemed to be a payment by the Company to or for
the account of the Debentures. It is understood that the provisions of this
Article 14 are and are intended solely for the purpose of defining the relative
rights of the holders of the Debentures, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.
Nothing contained in this Article 14 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium on, if any,
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the holder of any Debenture or the Trustee on his behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 14 of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 14, the Trustee, subject to the provisions of Article 7, and the
holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such liquidation,
dissolution, winding up, receivership, reorganization, assignment or marshaling
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the holders of the Debentures, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
14.
Section 14.05. Authorization by Debentureholders. Each holder of a
Debenture by his acceptance thereof authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 14 and appoints the Trustee his attorney-
in-fact for any and all such purposes.
Section 14.06. Notice to Trustee. The Company shall give prompt written
notice to the Trustee and to any paying agent of any fact known to the Company
which would prohibit the making of any payment of moneys to or by the Trustee or
any paying agent in respect of the Debentures pursuant to the provisions of this
Article 14. Regardless of anything to the contrary contained in this Article 14
or elsewhere in this Indenture, the Trustee shall not be charged with knowledge
of the existence of any Senior Indebtedness or of any default or event of
default with respect to any Senior Indebtedness or of any other facts which
would prohibit the making of any payment of moneys to or by
61
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the Trustee, unless and until the Trustee shall have received notice in writing
at its principal Corporate Trust Office to that effect signed by an officer of
the Company, or by a holder or agent of a holder of Senior Indebtedness who
shall have been certified by the Company or otherwise established to the
reasonable satisfaction of the Trustee to be such holder or agent, or by the
trustee under any indenture pursuant to which Senior Indebtedness shall be
outstanding, and, prior to the receipt of any such written notice, the Trustee
shall, subject to the provisions of Article 7, be entitled to assume that no
such facts exist; provided, however, that if on a date at least three Business
Days prior to the date upon which by the terms hereof any such moneys shall
become payable for any purpose (including, without limitation, the payment of
the principal of, or interest on any Debenture) the Trustee shall not have
received with respect to such moneys the notice provided for in this Section
14.06, then, regardless of anything herein to the contrary, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 14, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 14, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 14.07. Trustee's Relation to Senior Indebtedness. The Trustee and
any agent of the Company or the Trustee shall be entitled to all the rights set
forth in this Article 14 with respect to any Senior Indebtedness which may at
any time be held by it in its individual or any other capacity to the same
extent as any other holder of Senior Indebtedness and nothing in this Indenture
shall deprive the Trustee, or any such agent, of any of its rights as such
holder. Nothing in this Article 14 shall apply to claims of, or payments to,
the Trustee under or pursuant to Article 7.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 14, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Article 7, the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall pay over or deliver to holders of Debentures,
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the Company or any other person moneys or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article 14 or otherwise.
Section 14.08. No Impairment to Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the
Debentureholders, without incurring responsibility to the Debentureholders and
without impairing or releasing the subordination provided in this Article 14 or
the obligations hereunder of the holders of the Debentures to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company, as the case may be, and any
other Person.
Section 14.09. Article Applicable to Paying Agents. In case at any time
any paying agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee"as used in this Article shall in
such case (unless the context otherwise requires) be construed as extending to
and including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 14 in addition to or
in place of the Trustee.
Section 14.10. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Section 11.02 of this Indenture by
the Trustee for the payment of principal of and interest on the Debentures shall
not be subordinated to the prior payment of any Senior Indebtedness or subject
to the restrictions set forth in this Article 14, and none of the
Debentureholders shall be obligated to pay over any such amount to the Company
or any holder of Senior Indebtedness of the Company or any other creditor of the
Company.
The First National Bank of Chicago, as Trustee, hereby accepts the
trust in this Indenture declared and provided, upon the terms and conditions
herein above set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
LYONDELL CHEMICAL COMPANY
By ______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
By ___________________________
Name:
Title:
64
<PAGE>
DECLARATION OF TRUST, dated as of November 9, 1998 between Lyondell
Chemical Company, a Delaware corporation, as Sponsor (the "Sponsor"), and The
First National Bank of Chicago, not in its individual capacity but solely as
trustee (the "Property Trustee"), First Chicago Delaware Inc., not in its
individual capacity but solely as trustee (the "Delaware Trustee"), and Kerry A.
Galvin, not in her individual capacity but solely as trustee (the Property
Trustee, Delaware Trustee and such individual as trustee, collectively the
"Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The Delaware business trust created hereby shall be known as "Lyondell
Trust II", in which name the Trustees, or the Sponsor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trust hereby acknowledges receipt of such amount from
the Sponsor, which amount shall constitute the initial trust estate. It is the
intention of the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code
(S) 3801 et seq. (the "Business Trust Act"), and that this document constitutes
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Secretary of State
of the State of Delaware in the form attached hereto in accordance with the
provisions of the Business Trust Act. The Trust is hereby established by the
Sponsor and the Trustees for the purposes of (i) issuing preferred securities
representing undivided beneficial interests in the assets of the Trust
("Preferred Securities") in exchange for cash and investing the proceeds thereof
in junior subordinated debentures of the Sponsor, (ii) issuing and selling
common securities representing undivided beneficial interest in the assets of
the Trust to the Sponsor in exchange for cash and investing the proceeds thereof
in additional junior subordinated debentures of the Sponsor and (iii) engaging
in such other activities as are necessary, convenient or incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement referred to
below, to provide for the contemplated operation of the Trust created hereby and
the issuance of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor, as the sponsor of the Trust, is hereby authorized (i) to
prepare and file with the Securities and Exchange Commission (the "Commission")
and execute,
<PAGE>
in each case on behalf of the Trust, (a) a Registration Statement on Form S-3
(the "1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities and certain other securities of the Sponsor and (b) if the Sponsor
shall deem it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities
under Section 12 of the Securities Exchange Act of 1934, as amended; (ii) if the
Sponsor shall deem it desirable, to prepare and file with the New York Stock
Exchange or one or more national securities exchange(s) (each, an "Exchange") or
the National Association of Securities Dealers, Inc. (the "NASD") and execute on
behalf of the Trust a listing application or applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on any such Exchange or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to
prepare and file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as the Sponsor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of
the Trust, may deem necessary or desirable, (iv) to negotiate the terms of and
execute on behalf of the Trust an underwriting agreement among the Trust, the
Sponsor and any underwriter(s), dealer(s) or agent(s) relating to the Preferred
Securities, as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (v) to execute and deliver on behalf of the Trust letters or
documents to, or instruments for filing with, a depository relating to the
Preferred Securities. In the event that any filing referred to in clauses (i)-
(iii) above is required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws, to be executed
on behalf of the Trust by the Trustees, any Trustee appointed pursuant to
Section 6 hereof, in their capacities as Trustees of the Trust, and the Sponsor
are hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Property Trustee, the Delaware Trustee and Kerry A. Galvin, in her capacity as a
Trustee of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws. In connection with all of the foregoing, the
Sponsor and each Trustee, solely in its capacity as Trustee of the Trust, hereby
constitutes and appoints Dan F. Smith, Jeffrey R. Pendergraft and Kerry A.
Galvin, and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file (i)
any and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement with all exhibits
thereto, and other documents in connection therewith, and (ii) a registration
statement, and any and all amendments thereto, relating thereto filed pursuant
to Rule 462(b) under the
2
<PAGE>
Securities Act of 1933, as amended, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than three (3); and provided, further that to the extent required
by the Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and meets other
requirements imposed by applicable law. Subject to the foregoing, the Sponsor
is entitled to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon thirty days' prior notice to the Sponsor.
7. First Chicago Delaware Inc., in its capacity as Trustee, shall not have
any of the powers or duties of the Trustees set forth herein and shall be a
Trustee of the Trust for the sole purpose of satisfying the requirements of
Section 3807(a) of the Business Trust Act.
8. The Trust shall dissolve and terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
9. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
Lyondell Chemical Company,
as Sponsor
By: /s/ Kerry A. Galvin
___________________________________________________
Name: Kerry A. Galvin
Title: Associate General Counsel and Secretary
The First National Bank of Chicago,
not in its individual capacity but solely as Property
Trustee
By: /s/ Sandra L. Caruba
___________________________________________________
Name: Sandra L. Caruba
Title: Vice President
First Chicago Delaware Inc.,
not in its individual capacity but solely as Delaware
Trustee
By: /s/ Sandra L. Caruba
___________________________________________________
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
not in her individual capacity but solely as Trustee
By: /s/ Kerry A. Galvin
___________________________________________________
4
<PAGE>
DECLARATION OF TRUST, dated as of November 9, 1998 between Lyondell
Chemical Company, a Delaware corporation, as Sponsor (the "Sponsor"), and The
First National Bank of Chicago, not in its individual capacity but solely as
trustee (the "Property Trustee"), First Chicago Delaware Inc., not in its
individual capacity but solely as trustee (the "Delaware Trustee"), and Kerry A.
Galvin, not in her individual capacity but solely as trustee (the Property
Trustee, Delaware Trustee and such individual as trustee, collectively the
"Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The Delaware business trust created hereby shall be known as "Lyondell
Trust III", in which name the Trustees, or the Sponsor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trust hereby acknowledges receipt of such amount from
the Sponsor, which amount shall constitute the initial trust estate. It is the
intention of the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code (S) 3801 et seq. (the "Business Trust Act"), and that this document
constitutes the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust with the
Secretary of State of the State of Delaware in the form attached hereto in
accordance with the provisions of the Business Trust Act. The Trust is hereby
established by the Sponsor and the Trustees for the purposes of (i) issuing
preferred securities representing undivided beneficial interests in the assets
of the Trust ("Preferred Securities") in exchange for cash and investing the
proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing
and selling common securities representing undivided beneficial interest in the
assets of the Trust to the Sponsor in exchange for cash and investing the
proceeds thereof in additional junior subordinated debentures of the Sponsor and
(iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement referred to
below, to provide for the contemplated operation of the Trust created hereby and
the issuance of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery any licenses, consents or approvals required by applicable law or
otherwise.
4. The Sponsor, as the sponsor of the Trust, is hereby authorized (i) to
prepare and file with the Securities and Exchange Commission (the "Commission")
and execute,
<PAGE>
in each case on behalf of the Trust, (a) a Registration Statement on Form S-3
(the "1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities and certain other securities of the Sponsor and (b) if the Sponsor
shall deem it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities
under Section 12 of the Securities Exchange Act of 1934, as amended; (ii) if the
Sponsor shall deem it desirable, to prepare and file with the New York Stock
Exchange or one or more national securities exchange(s) (each, an "Exchange") or
the National Association of Securities Dealers, Inc. (the "NASD") and execute on
behalf of the Trust a listing application or applications and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on any such Exchange or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to
prepare and file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as the Sponsor, on behalf of the Trust,
may deem necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of
the Trust, may deem necessary or desirable, (iv) to negotiate the terms of and
execute on behalf of the Trust an underwriting agreement among the Trust, the
Sponsor and any underwriter(s), dealer(s) or agent(s) relating to the Preferred
Securities, as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (v) to execute and deliver on behalf of the Trust letters or
documents to, or instruments for filing with, a depository relating to the
Preferred Securities. In the event that any filing referred to in clauses
(i)-(iii) above is required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws, to be executed
on behalf of the Trust by the Trustees, any Trustee appointed pursuant to
Section 6 hereof, in their capacities as Trustees of the Trust, and the Sponsor
are hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Property Trustee, the Delaware Trustee and Kerry A. Galvin, in her capacity as a
Trustee of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, any Exchange, Nasdaq, the NASD or state
securities or blue sky laws. In connection with all of the foregoing, the
Sponsor and each Trustee, solely in its capacity as Trustee of the Trust, hereby
constitutes and appoints Dan F. Smith, Jeffrey R. Pendergraft and Kerry A.
Galvin, and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file (i)
any and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement with all exhibits
thereto, and other documents in connection therewith, and (ii) a registration
statement, and any and all amendments thereto, relating thereto filed pursuant
to Rule 462(b) under the
2
<PAGE>
Securities Act of 1933, as amended, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than three (3); and provided, further that to the extent required
by the Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and meets other
requirements imposed by applicable law. Subject to the foregoing, the Sponsor
is entitled to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon thirty days' prior notice to the Sponsor.
7. First Chicago Delaware Inc., in its capacity as Trustee, shall not
have any of the powers or duties of the Trustees set forth herein and shall be a
Trustee of the Trust for the sole purpose of satisfying the requirements of
Section 3807(a) of the Business Trust Act.
8. The Trust shall dissolve and terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
9. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
3
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IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
Lyondell Chemical Company,
as Sponsor
By: /s/ Kerry A. Galvin
------------------------------------------
Name: Kerry A. Galvin
Title: Associate General Counsel and Secretary
The First National Bank of Chicago,
not in its individual capacity but solely as
Property Trustee
By: /s/ Sandra L. Caruba
------------------------------------------
Name: Sandra L. Caruba
Title: Vice President
First Chicago Delaware Inc.,
not in its individual capacity but solely as
Delaware Trustee
By: /s/ Sandra L. Caruba
------------------------------------------
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
not in her individual capacity but solely as
Trustee
By: /s/ Kerry A. Galvin
------------------------------------------
4
<PAGE>
EXHIBIT 4.5.1
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
LYONDELL TRUST I
_______________________________________
DATED AS OF ___________, 1999
_______________________________________
================================================================================
<PAGE>
TABLE OF CONTENTS*
PAGE
----
ARTICLE 1
Definitions
Section 1.01. Definitions......................................... 2
Affiliate........................................... 2
Book Entry Interest................................. 2
Business Day........................................ 3
Business Trust Act.................................. 3
Certificate......................................... 3
Certificate of Trust................................ 3
Clearing Agency..................................... 3
Clearing Agency Participant......................... 3
Closing Date........................................ 3
Code................................................ 3
Commission.......................................... 3
Common Securities................................... 3
Common Security Certificate......................... 3
Common Stock........................................ 4
Conversion Agent.................................... 4
Covered Person...................................... 4
Creditor............................................ 4
Debenture Trustee................................... 4
Debentures.......................................... 4
Definitive Preferred Security Certificates.......... 4
Delaware Trustee.................................... 4
Depositary Agreement................................ 4
Distribution........................................ 4
DTC................................................. 4
Event of Default.................................... 4
Exchange............................................ 4
Exchange Act........................................ 4
Fiscal Year......................................... 5
Global Certificate.................................. 5
Holder.............................................. 5
Holder Direct Action................................ 5
- -----------------------
*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
i
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PAGE
----
Indemnified Person.................................. 5
Indenture........................................... 5
Indenture Event of Default.......................... 5
Investment Company.................................. 5
Investment Company Act.............................. 5
Legal Action........................................ 5
Liquidation Distribution............................ 5
List of Holders..................................... 5
Lyondell............................................ 5
Sponsor............................................. 5
Majority in liquidation amount of the Securities.... 5
NASD................................................ 6
Nasdaq.............................................. 6
1933 Act Registration Statement..................... 6
1934 Act Registration Statement..................... 6
Officers' Certificate............................... 6
Opinion of Counsel.................................. 7
Option Closing Date................................. 7
Original Declaration................................ 7
Paying Agent........................................ 7
Payment Amount...................................... 7
Person.............................................. 7
Preferred Guarantee................................. 7
Preferred Securities................................ 7
Preferred Security Beneficial Owner................. 7
Preferred Security Certificate...................... 7
Property Trustee.................................... 7
Property Account.................................... 8
Quorum.............................................. 8
Regular Trustee..................................... 8
Related Party....................................... 8
Resignation Request................................. 8
Responsible Officer................................. 8
Rule 3a-7........................................... 8
Securities.......................................... 8
Securities Act...................................... 8
Special Event....................................... 8
Sponsor............................................. 8
Lyondell............................................ 8
Successor Delaware Trustee.......................... 8
Successor Entity.................................... 8
Successor Property Trustee.......................... 9
ii
<PAGE>
PAGE
----
Successor Securities................................... 9
Super Majority......................................... 9
Supplemental Indenture................................. 9
10% in liquidation amount of the Securities............ 9
Treasury Regulations................................... 9
Trust.................................................. 9
Trustee................................................ 9
Trustees............................................... 9
Trust Indenture Act.................................... 10
Underwriting Agreement................................. 10
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application....................... 10
Section 2.02. Lists of Holders of Preferred Securities............... 10
Section 2.03. Reports by the Property Trustee........................ 11
Section 2.04. Periodic Reports to the Property Trustee............... 11
Section 2.05. Evidence of Compliance with Conditions Precedent....... 11
Section 2.06. Events of Default; Waiver.............................. 11
Section 2.07. Disclosure of Information.............................. 13
ARTICLE 3
Organization
Section 3.01. Name................................................... 14
Section 3.02. Office................................................. 14
Section 3.03. Issuance of the Securities............................. 14
Section 3.04. Purchase of Debentures................................. 15
Section 3.05. Purpose................................................ 15
Section 3.06. Authority.............................................. 16
Section 3.07. Title to Property of the Trust......................... 16
Section 3.08. Powers and Duties of the Regular Trustees.............. 16
Section 3.09. Prohibition of Actions by the Trust and the Trustees... 19
Section 3.10. Powers and Duties of the Property Trustee.............. 20
Section 3.11. Delaware Trustee....................................... 24
Section 3.12. Certain Rights and Duties of the Property Trustee...... 24
Section 3.13. Registration Statement and Related Matters............. 26
Section 3.14. Filing of Amendments to Certificate of Trust........... 28
Section 3.15. Execution of Documents by the Regular Trustees......... 28
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities............................................. 28
iii
<PAGE>
PAGE
----
Section 3.17. Duration of the Trust................................... 28
Section 3.18. Mergers................................................. 28
Section 3.19. Property Trustee May File Proofs of Claim............... 30
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor............ 31
Section 4.02. Expenses................................................ 32
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications...................... 33
Section 5.02. Appointment, Removal and Resignation of the Trustees.... 35
Section 5.03. Vacancies among the Trustees............................ 37
Section 5.04. Effect of Vacancies..................................... 37
Section 5.05. Meetings................................................ 37
Section 5.06. Delegation of Power..................................... 38
Section 5.07. Merger, Conversion, Consolidation or Succession to
Business................................................ 38
ARTICLE 6
Distributions
Section 6.01. Distributions........................................... 38
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities............. 39
Section 7.02. Conversion Agent........................................ 40
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust................................ 41
iv
<PAGE>
PAGE
----
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities............................... 42
Section 9.02. Transfer of Certificates............................. 42
Section 9.03. Deemed Security Holders.............................. 42
Section 9.04. Book Entry Interests................................. 43
Section 9.05. Notices to Holders of Certificates................... 44
Section 9.06. Appointment of Successor Clearing Agency............. 44
Section 9.07. Definitive Preferred Securities Certificates......... 44
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.... 45
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation......................................... 45
Section 10.02. Indemnification..................................... 46
Section 10.03. Outside Business.................................... 46
ARTICLE 11
Accounting
Section 11.01. Fiscal Year......................................... 47
Section 11.02. Certain Accounting Matters.......................... 47
Section 11.03. Banking............................................. 48
Section 11.04. Withholding......................................... 48
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.......................................... 48
Section 12.02. Meetings of the Holders of Securities; Action by
Written Consent..................................... 50
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property
Trustee............................................. 51
Section 13.02. Representations and Warranties of the Delaware
Trustee............................................. 52
v
<PAGE>
PAGE
----
ARTICLE 14
Miscellaneous
Section 14.01. Notices........................................ 53
Section 14.02. Undertaking for Costs.......................... 54
Section 14.03. Governing Law.................................. 55
Section 14.04. Headings....................................... 55
Section 14.05. Partial Enforceability......................... 55
Section 14.06. Counterparts................................... 55
Section 14.07. Intention of the Parties....................... 55
Section 14.08. Successors and Assigns......................... 56
Section 14.09. No Recourse.................................... 56
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LYONDELL TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of __________, ____ by Kerry A. Galvin, ___________ and
___________, as Regular Trustees (the "Regular Trustees"), The First National
Bank of Chicago, as Property Trustee (the "Property Trustee") and First Chicago
Delaware Inc., as Delaware Trustee (the "Delaware Trustee") (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Lyondell
Chemical Company, a Delaware corporation, as trust sponsor ("Lyondell" or the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration
of Trust dated as of July 29, 1998 (the "Original Declaration") in order to
establish Lyondell Trust I, a statutory business trust (the "Trust"), under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware on
July 29, 1998; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities (as
hereinafter defined) representing preferred undivided beneficial interests in
the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Lyondell issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Lyondell in exchange for cash
and investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
<PAGE>
Trustees declare that all Debentures referred to in clauses (i) and (ii) of the
previous paragraph purchased by the Trust will be held in trust for the benefit
of the Holders (as hereinafter defined) from time to time, of the Certificates
(as hereinafter defined) representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE 1
Definitions
Section 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
2
<PAGE>
transfers of which shall be maintained and made through book entries by such
Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and State of
New York, Chicago, Illinois or Houston, Texas are authorized or required by law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S) 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
3
<PAGE>
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
["Common Stock" means the common stock, par value $1.00 per share, of
Lyondell or any other class of stock, other securities, cash or other assets
into which the Debentures are then convertible.]
["Conversion Agent" has the meaning specified in Section 7.02.]
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Lyondell or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of Subordinated Debentures issued by Lyondell
under the Indenture to the Property Trustee and entitled the "____% Subordinated
Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
4
<PAGE>
"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Conversion Agent, any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"Indenture" means the Subordinated Indenture dated as of _______ __, ____
between Lyondell and the Debenture Trustee as supplemented by the _______
Supplemental Indenture thereto dated as of ____________, ____, pursuant to which
the Debentures are to be issued.
"Indenture Event of Default" means that an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
5
<PAGE>
"Lyondell" or "Sponsor" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in
Section 3.13.
"1934 Act Registration Statement" has the meaning specified in
Section 3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Sponsor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 2.05 shall be the principal executive, financial or
accounting officer of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
6
<PAGE>
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, which may be an employee of
the Sponsor but not an employee of the Trust or the Property Trustee, and who
shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel
pertaining to federal income tax matters may rely on published rulings of the
Internal Revenue Service.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of __________,
____ of Lyondell in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
7
<PAGE>
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Lyondell or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Lyondell.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Property Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities as
set forth in paragraph 4 of Exhibits B and C hereto.
"Sponsor" or " Lyondell" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
8
<PAGE>
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.02(b).
"Successor Securities" has the meaning specified in Section 3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental Indenture dated as of
________, ____ between Lyondell and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or " Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
9
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ____ among the Trust, the Sponsor and _______ and _________, as
representatives of the several underwriters named therein.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or
the rules and regulations of the Commission, shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee unless the Property Trustee is registrar for
the Securities, (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time that the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as
10
<PAGE>
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under (S)(S)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Securities such reports as are required by (S) 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by (S) 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by (S) 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by (S) 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to (S) 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each Fiscal Year).
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration which relate to any of the matters
set forth in (S) 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to (S) 314(c) may be given in the
form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided above in Section 2.06(a) or below in this
Section 2.06(b), the Event of Default under this Declaration shall also not
be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided above in Section
2.06(a) or below in this Section 2.06(b), the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Common
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Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to
have waived any such Event of Default and all Events of Defaults with respect to
the Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
Holders of Preferred Securities as provided in the Declaration, the Holders of
Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon waiver, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the Holders
of the Securities in accordance with (S) 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to (S) 312 of the Trust Indenture Act, nor shall the
Property
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Trustee be held accountable by reason of mailing any material pursuant to a
request made under (S) 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.01. Name.
The Trust continued by this Declaration is named "Lyondell Trust I" as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.02. Office.
The address of the principal office of the Trust is c/o Lyondell Chemical
Company, 1221 McKinney Street, Suite 1600, Houston, Texas 77010. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
Section 3.03. Issuance of the Securities.
On __________, ____ the Sponsor, on behalf of the Trust and pursuant to the
Original Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver to (i) the underwriters named in the Underwriting Agreement, a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.04, in an aggregate amount of ___________
Preferred Securities having an aggregate liquidation amount of $__________,
against receipt of the aggregate purchase price of such Preferred Securities of
$___________, and (ii) the Sponsor, Common Securities Certificates, registered
in the name of the Sponsor, in an aggregate amount of ________ Common Securities
having an aggregate liquidation amount of $____________, against receipt of the
aggregate purchase price of such Common Securities of $___________. In the
event and to the extent the overallotment option granted by the Trust pursuant
to the Underwriting Agreement is exercised by such underwriters, on the Option
Closing Date the Regular Trustees, on behalf of the Trust, shall execute and
deliver to such underwriters a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of up to ___________ Preferred
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Securities having an aggregate liquidation amount of up to $___________, against
receipt of the aggregate purchase price of such Preferred Securities of up to
$____________.
Section 3.04. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and delivery
of this Declaration, the Regular Trustees, on behalf of the Trust, shall
purchase from the Sponsor with the proceeds received by the Trust from the sale
of the Securities on such date pursuant to Section 3.03, at a purchase price of
100% of the principal amount thereof, Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount equal to $___________,
and, in satisfaction of the purchase price for such Debentures, the Regular
Trustee, on behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of $___________. In the event the overallotment option granted
by the Trust with respect to the Preferred Securities pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on the
Option Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.03, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $__________, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased.
Section 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue and
sell Preferred Securities for cash and use the proceeds of such sales to acquire
from Lyondell Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii) to
issue and sell Common Securities to Lyondell for cash and use the proceeds of
such sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (b) except as otherwise limited
herein, to engage in only those other activities
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necessary, convenient or incidental thereto, including such other activities
specifically authorized in this Declaration. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge any
of its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
Section 3.06. Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and the
Property Account or unless otherwise provided in this Declaration, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have
undivided beneficial interests in the assets of the Trust.
Section 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty to
cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date and (y) any subsequent issuance of
Preferred Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting Agreement;
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(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of (S) 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by (S)
314(a)(4)
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of the Trust Indenture Act, which certificate may be executed by any Regular
Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing the
Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes of the Trust and the
activities of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures will be
treated as indebtedness of the Sponsor for United States federal income tax
purposes;
(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust,
and to comply with any requirements imposed by any taxing authority on holders
of instruments treated as indebtedness for United States federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
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(S) 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05, and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers or any of the authority of the Property Trustee set forth in Section
3.10.
The Regular Trustees shall take all actions on behalf of the Trust that are
not specifically required by this Declaration to be taken by any other Trustee.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.08
shall be reimbursed by the Sponsor.
Section 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as otherwise
expressly provided herein;
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(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee or exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures, without, in each case, obtaining
the prior approval of the Holders of a Majority in liquidation amount of all
outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, unless in the case of
this clause (j) the Property Trustee shall have received an Opinion of Counsel
experienced in such matters to the effect that such amendment, modification or
termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor
trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
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Section 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with
Section 6.01. Funds in the Property Account shall be held uninvested, and
without liability for interest thereon, until disbursed in accordance with
this Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the occurrence of
a Special Event or upon the election of the Holder of Common Securities to
distribute the Debentures to Holders of Securities and dissolve the Trust;
and
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(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject to
Section 3.10(e), shall for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures under the Indenture, subject
to the rights of the Holders of the Preferred Securities pursuant to the
terms of this Declaration, the Business Trust Act and the Trust Indenture
Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Company will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
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not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to the Property Trustee,
transmit by mail, first class postage prepaid, to the holders of the Securities,
as their names and addresses appear upon the register, notice of such defaults
with respect to the Securities known to the Property Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 3.10(g) being hereby defined to be
an Indenture Event of Default, not including any periods of grace provided for
in the Indenture and irrespective of the giving of any notice provided therein);
provided, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers, of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
The Property Trustee shall not be deemed to have knowledge of any default,
except (i) a default in the payment of principal, premium or interest on the
Debentures or (ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged with the administration
of this Declaration shall have obtained written notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds thereof
distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with (S) 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee,
after consultation with the Regular Trustees, at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(q).
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(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from Lyondell of its election to
defer payments of interest on the Debentures by extending the interest payment
period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
Section 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of (S) 3807(a) of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
Section 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration, and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee hereunder or
under the Indenture, or exercising any trust or power conferred upon the
Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
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established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, request and rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of its
employees) selected by it in good faith and with due care and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have offered to the
Property Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
Property Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured or waived) to exercise such of the
rights and powers vested in it by this Declaration, and to use the same
degree of care and skill in this exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; and
(v) any action taken by the Property Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to inquire
as to the authority of the Property Trustee to so act, or as to its
compliance with any of the terms and provisions of this Declaration, both
of which
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shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action.
(d) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
Section 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Lyondell, as the sponsor of
the Trust, was authorized (i) to file with the Commission and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (File
No. 333-60429) (the "1933 Act Registration Statement") including any pre-
effective or post-effective amendments thereto, relating to the registration
under the Securities Act of the Preferred Securities and (b) if Lyondell shall
deem it desirable, a Registration Statement on Form 8-A or other appropriate
form (the "1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act; (ii) if Lyondell shall deem it
desirable, to prepare and file with the New York Stock Exchange or one or more
national securities exchange(s) (each, an "Exchange") or the National
Association of Securities Dealers, Inc. (the "NASD") and execute on behalf of
the Trust a listing application or applications and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and all other papers
and documents as Lyondell, on behalf of the Trust, may deem necessary or
desirable to register the Preferred Securities under the securities or "Blue
Sky" laws of such jurisdictions as Lyondell on behalf of the Trust, may deem
necessary or desirable; and (iv) to negotiate the terms and execute on behalf of
the Trust the Underwriting Agreement. In the event that any filing referred to
in clauses (i)-(iii) above is required by the rules and regulations of the
Commission, any Exchange, Nasdaq, the NASD or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, and Lyondell are hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee and
the Delaware Trustee, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws. In connection
with all of the foregoing, Lyondell and each Trustee, solely in its capacity as
Trustee of the Trust, have constituted and appointed, and hereby confirm the
appointment of, Dan F. Smith, Jeffrey R. Pendergraft and Edward W. Rich and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for
Lyondell or such Trustee or in Lyondell's or such Trustee's name, place and
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stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as Lyondell or such Trustee might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State
of Delaware on July 29, 1998 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments, if any, to
the Certificate of Trust as the Trustees shall deem necessary or desirable.
Section 3.15. Execution of Documents by the Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall have existence until ___________, ____.
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Section 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, except as described
in Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or
the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses the same powers and duties as the Property Trustee as the holder
of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities will
be listed upon notification of issuance, on any national securities
exchange or with another organization in which the Preferred Securities are
then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior to
such transaction, such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
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(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received an
Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Trust (or
the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an
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entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
Section 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
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Securities or the rights of any Holder thereof to authorize the Property Trustee
to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common Securities
issued by the Trust at the same time as the Preferred Securities to be issued on
such date are issued, such purchase to be in an amount equal to 3% of the total
capital of the Trust (including for this purpose the maximum amount of Preferred
Securities, if any, which may be issued on the Option Closing Date pursuant to
the exercise of the overallotment option set forth in the Underwriting
Agreement).
Section 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
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Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this
Section 4.02.
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace, the
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of Lyondell;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and otherwise is permitted to
act as a Trustee hereunder under the laws of the State of Delaware, except
that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Property
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Trustee shall also be the Delaware Trustee and Section 3.11 shall have
no application; and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
[to come]
c/o LYONDELL CHEMICAL COMPANY
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(c) There shall at all times be one Trustee which shall act as the Property
Trustee. In order to act as the Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation,
national banking association or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If such
corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.01(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
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If at any time the Property Trustee shall cease to satisfy the requirements
of clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of (S) 310(b)
of the Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in (S) 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions of
(S) 310(b) of the Trust Indenture Act. The Preferred Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in (S) 310(b) of the Trust
Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The First
National Bank of Chicago, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
Section 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.
(b) (i) The Trustee that acts as the Property Trustee shall not be removed
in accordance with Section 5.02(a) until a Successor Property Trustee possessing
the qualifications to act as the Property Trustee under Section 5.01(c) (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
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and delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing the
qualifications to act as the Delaware Trustee under Section 5.01(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications to
act as the Property Trustee under Section 5.01(c) has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7, until the assets of the Trust
have been completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery to the Sponsor and the Trust of a Resignation
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Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee, as the case may be. Such court may thereupon
after prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the case
may be.
Section 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees
is not reduced pursuant to Section 5.01 or if the number of Trustees is
increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action
of the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
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vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any registration statement or amendment thereto or
other document or schedule filed with the Commission or making any other
governmental filing (including, without limitation, the filings referred to in
Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.07. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, shall be a party,
or any Person succeeding to all or substantially all of the corporate trust
business of the Property Trustee or the Delaware Trustee or the Regular Trustee,
as the case may be, shall be the successor of the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, hereunder,
provided that such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 6
Distributions
Section 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant
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Holder's Securities as set forth in Exhibits B and C hereto ("Distributions").
If and to the extent that Lyondell makes a payment of interest (including
Compounded Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to promptly make a Distribution of
the Payment Amount to Holders in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto.
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue on behalf of the Trust Securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with Section 7.01(b) and for the consideration
specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee who shall have signed
any of the Certificates shall cease to be such Regular Trustee before the
Certificate so signed shall be delivered by the Trust, such Certificate
nevertheless may be delivered as though the person who signed such Certificate
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons as, at the actual date of the execution of
such Certificate, shall be the
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Regular Trustees, although at the date of the execution and delivery of this
Declaration any such person was not a Regular Trustee. Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which Securities may be
listed or traded, or with any rule or regulation of the Clearing Agency, or to
conform to usage. Pending the preparation of definitive Certificates, the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each temporary
Certificate shall be executed by the Regular Trustees (or, if there are more
than two Regular Trustees, by any two of the Regular Trustees) on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Lyondell the $10
constituting initial trust assets as set forth in the Original Declaration.
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[Section 7.02. Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities may be
presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Conversion
Agent shall be entitled to the rights and protections extended to the Property
Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion Agent for
the Preferred Securities.]
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders
of the Securities in accordance with the terms of the Securities; or
(ii) when all of the Debentures shall have been distributed to the Holders
of the Securities in exchange for all of the Securities in accordance with the
terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17[; or
(iv) upon the distribution of Common Stock to all Securities Holders upon
conversion of all outstanding Securities.]
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The
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Trustees shall so file such a certificate as soon as practicable after the
occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws). To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void.
Section 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder
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upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
Section 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance (including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement), will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.07. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein in
Section 9.07 or in Rule 3a-7 (if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, shall have no obligation to the Preferred Security
Beneficial Owners;
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(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants, provided, that
solely for the purposes of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in
this Declaration, so long as definitive Preferred Security Certificates
have not been issued (pursuant to Section 9.07 hereof), the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in
whole or in part.
Section 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to be
given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall, except
in Rule 3a-7 (if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7) with respect to the Property Trustee,
have no notice obligations to the Preferred Security Beneficial Owners.
Section 9.06. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
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Section 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such instructions.
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees) on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.08, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
Section 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by
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reason of gross negligence (or, in the case of the Property Trustee, negligence)
or willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the termination of this
Declaration or the resignation or removal of any Trustee.
Section 10.03. Outside Business.
The Sponsor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
Accounting
Section 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees shall
keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
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(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be prepared
and mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply with the
periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
such financial statements for such Fiscal Year shall be examined and reported on
by a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to each
Holder of Securities any annual United States federal income tax information
statement required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
Section 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
Section 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request, and
the Holders shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit
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amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed overwithholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount to be
withheld was not withheld from a Distribution, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment or modification to this Declaration shall be
made, and any such purported amendment shall be void and ineffective: (A) unless
the Regular Trustees shall have first received: (x) an Officers' Certificate
that such amendment is permitted by, and conforms to, the terms of this
Declaration; and (y) an Opinion of Counsel that such amendment is permitted by,
and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a grantor trust; (y)
reduce or otherwise adversely affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or (z) cause the Trust to be deemed to
be an Investment Company required to be registered under the Investment Company
Act; (ii) at such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(iii) Section 4.02, Section 9.01(c) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities; (iv) no amendment
which adversely affects the rights, powers and privileges of the Property
Trustee or the Delaware Trustee shall be made without the consent of the
Property Trustee or the Delaware Trustee, respectively; (v) Article 4 shall not
be amended without the consent of the Sponsor; and (vi) the rights of the
Holders of Common Securities under Article 5 to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
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(b) Notwithstanding Section 12.02(a), this Declaration may be amended without
the consent of the Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration, (iii) add to the
covenants, restrictions or obligations of the Sponsor, (iv) conform to any
changes in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) or any change in
interpretation or application of Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or questions
arising under this Declaration which shall not be inconsistent with the other
provisions of this Declaration, (vi) modify, eliminate or add to any provisions
of this Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure that
the Trust will not be required to register as an Investment Company under the
Investment Company Act, and (vii) pursuant to Section 5.02, evidence the
acceptance of the appointment of a successor Trustee or fill a vacancy created
by an increase in the number of Regular Trustees, which amendment does not
adversely affect in any material respect the rights, preferences or privileges
of the Holders.
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which the Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
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(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of the Holders of Securities:
(i) Notice of any such meeting shall be given by mail to all the Holders of
Securities having a right to vote thereat not less than seven (7) days nor
more than sixty (60) days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange or automated
quotation system on which the Preferred Securities are then listed, traded or
quoted, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by Holders of Securities owning
not less than the minimum aggregate liquidation amount of Securities that
would be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the Holders
of Securities for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted by
the Regular Trustees or by such other Person that the Regular Trustees may
designate.
(iv) Unless otherwise provided in the Business Trust Act, this Declaration
or the rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted,
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the Regular Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including notice of
the time, place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(iii) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or notice
to, any banking authority which supervises or regulates the Property
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Trustee is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in Section
5.01(c).
Section 13.02. Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee represents and warrants
to the Trust and the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as the
Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware Trustee of
this Declaration have been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(iii) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Delaware
Trustee, if any, is required for the execution, delivery or performance by the
Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and is a Person that
satisfies for the Trust (S) 3807(a) of the Business Trust Act.
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ARTICLE 14
MISCELLANEOUS
Section 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by
first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
Lyondell Trust I
c/o Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(b) if given to the Property Trustee, at the mailing address of the Property
Trustee set forth below (or such other address as the Property Trustee may give
notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention:
Telecopy:
(d) if given to the Holder of the Common Securities, at the mailing address of
the Sponsor set forth below (or such other address as the Holder of the Common
Securities may give notice of to the Trust):
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Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices shall be deemed to have been given, when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Declaration, or in any suit against the Property Trustee for
any action taken or omitted by it as Property Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 14.02 shall not apply to any suit instituted
by the Property Trustee, to any suit instituted by any Holder of Preferred
Securities, or group of Holders of Preferred Securities, holding more than 10%
in aggregate liquidation amount of the outstanding Preferred Securities, or to
any suit instituted by any Holder of Preferred Securities for the enforcement of
the payment of the principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed in such Debentures.
Section 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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Section 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature pages
and this Declaration may be executed by the affixing of the signature of the
Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be classified for
United States federal income tax purposes as an association taxable as a
corporation or partnership but that the Trust be treated as a grantor trust for
United States federal income tax purposes. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
Section 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.09. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions, or for any claim upon
the Securities or otherwise in respect thereof, shall be had against any Holder
of Securities or any Affiliate of a Holder of Securities, solely by reason of
such
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Person's being a Holder of Securities or an Affiliate of a Holder of Securities,
it being understood that the Holder of Securities, solely by reason of being a
Holder of Securities, has limited liability (in accordance with the provisions
of the Business Trust Act) for the liabilities and obligations of the Trust.
Nothing contained in this Section 14.09 shall be construed to limit the exercise
or enforcement, in accordance with the terms of this Declaration, the Preferred
Guarantee and the Indenture, of the rights and remedies against the Trust or the
Sponsor.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
LYONDELL CHEMICAL COMPANY,
as Sponsor
By:______________________________
Name:
Title:
_______________________________
Kerry A. Galvin,
as Regular Trustee
________________________________
[Name],
as Regular Trustee
________________________________
[Name],
as Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:_____________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:_____________________________
Name:
Title:
58
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EXHIBIT A
CERTIFICATE OF TRUST
OF
LYONDELL TRUST I
THIS CERTIFICATE OF TRUST of Lyondell Trust I (the "Trust"), dated as of July
29, 1998, is being duly executed and filed by the undersigned, as trustees, with
the Secretary of State of the State of Delaware to form a business trust under
the Delaware Business Trust Act (12 Del. Code (S) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust at
the time of filing this Certificate of Trust, have executed this Certificate of
Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
_________________________________
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
________________________________
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
________________________________
<PAGE>
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust I dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Preferred Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________) (including up to
_______________________________________________ Dollars ($___________) issuable
upon exercise of the overallotment option set forth in the Underwriting
Agreement), and each with a liquidation amount with respect to the assets of the
Trust of $[50][25] per Preferred Security, are hereby designated as "____%
Convertible Preferred Trust Securities, Series A". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or automated quotation system on
which the Preferred Securities are then listed, traded or quoted. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of Lyondell
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities and the Common Securities so issued and bearing
interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security will
be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $[50][25] per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
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used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
___________, _____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year, commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the
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Preferred Securities remain in book-entry only form, the relevant record
dates shall be one business day prior to the relevant Distribution date, and
if the Preferred Securities are no longer in book-entry only form, the
relevant record dates will be the fifteenth (15th) day of the month prior to
the relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Preferred Securities that are not punctually paid on any
Distribution payment date as a result of Lyondell's having failed to make
the corresponding interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred Security is registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record
date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless Lyondell has elected to make
a full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the
Preferred Securities will be made as described in paragraph 9 hereof. If any
date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
[(e) In the event of an election by the Holder to convert its Preferred
Securities through the Conversion Agent into Common Stock pursuant to the
terms of the Preferred Securities as set forth in this Exhibit B to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Preferred Securities, or be
required to be made; provided, however, that if a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a Distribution and before the
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opening of business on the corresponding Distribution date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution date will be paid in cash to the person in whose name the
Preferred Security is registered at the close of business on such record
date, and (other than a Preferred Security or a portion of a Preferred
Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to the creditors of the Trust, an amount equal to
the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination, and
after satisfaction of liabilities to the creditors of the Trust, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and the Common Securities and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid Distributions
on, such Preferred Securities and the Common Securities, shall be distributed
Pro Rata to the Holders of the Preferred Securities and the Common Securities in
exchange for such Securities.
If, upon any such dissolution, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation Distribution,
then the amounts payable directly by the Trust on the Preferred Securities and
the Common Securities shall be paid, subject to the next paragraph, on a Pro
Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred
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<PAGE>
and is continuing, the Preferred Securities shall have a priority over
the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding and may be canceled by the Regular Trustees, and
(ii) Certificates representing Preferred Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accumulated and unpaid Distributions
on, such Preferred Securities until such Certificates are presented to
Lyondell or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Lyondell, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less
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<PAGE>
than 30 nor more than 60 days' notice, at a redemption price of $[50][25]
per Preferred Security and Common Security plus an amount equal to
accumulated and unpaid Distributions thereon to the date of redemption,
payable in cash (the "Redemption Price"). The date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in paragraph 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the
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theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No
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defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered in
the name of and held of record by DTC (or successor Clearing Agency) or
any other nominee, the Preferred Securities will be redeemed from, and
the distribution of the proceeds of such redemption will be made to,
DTC (or successor Clearing Agency).
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that Lyondell has paid
the Property Trustee, in immediately available funds, a sufficient
amount of cash in connection with the related redemption or maturity of
the Debentures, the Property Trustee will deposit irrevocably with DTC
(or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give
DTC (or successor Clearing Agency) irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities and provided that
Lyondell has paid the Property Trustee, in immediately available funds,
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred Securities
by check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the redemption date, Distributions will cease to
accumulate on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be outstanding and all
rights of Holders of such Preferred Securities so called for redemption
will cease, except the right of the Holders of such Preferred
Securities to receive the
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<PAGE>
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Preferred Securities which
have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by Lyondell pursuant to the Preferred Guarantee,
Distributions on such Preferred Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), Lyondell or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
B-10
<PAGE>
[5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on ________, ____ or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into shares of Common Stock in the manner described herein
on and subject to the following terms and conditions:
(a) The Preferred Securities will be convertible at the office of the
Conversion Agent maintained for such purpose in the Borough of Manhattan,
The City of New York, into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to exchange
such Preferred Securities for a portion of the Debentures theretofore held
by the Trust on the basis of one Preferred Security per $[50][25] principal
amount of Debentures, and immediately convert such amount of Debentures into
fully paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50] [25] principal amount of Debentures (which
is equivalent to a conversion price of $___ per share of Common Stock,
subject to certain adjustments set forth in Sections __ and __ of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Preferred Securities on behalf of such
Holder (the "Conversion Request"), together, if the Preferred Securities are
in certificated form, with such Preferred Security Certificates. The
Conversion Request shall (i) set forth the number of Preferred Securities to
be converted and the name or names, if other than the Holder, in which the
shares of Common Stock should be issued and (ii) direct the Conversion Agent
(a) to exchange such Preferred Securities for a portion of the Debentures
held by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of such
Holder into Common Stock, subject to certain adjustments set forth in the
Supplemental Indenture (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Trust of the Holder's
election to exchange Preferred Securities for a portion of the Debentures
held by the Trust and the Trust shall, upon receipt of such notice, deliver
to the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a
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<PAGE>
Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash
to the person in whose name the Preferred Security is registered at the
close of business on such record date, and (other than a Preferred Security
or a portion of a Preferred Security called for redemption on a redemption
date occurring after such record date and on or prior to such Distribution
payment date) when so surrendered for conversion, the Preferred Security
must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date. Except as provided above, neither
the Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated
and unpaid Distributions accumulated on the Preferred Securities surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Preferred Securities shall be deemed to
constitute full payment for all accumulated and unpaid Distributions on the
Preferred Securities. Preferred Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Preferred Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share
to the Person or Persons entitled to receive the same, unless otherwise
directed by the Holder in the Notice of Conversion, and the Conversion Agent
shall distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance thereof
appoints The First National Bank of Chicago as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of
the Holders of Preferred Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Preferred Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Preferred Securities in accordance
with this Section and (ii) to convert all or a portion of the Debentures
into
B-12
<PAGE>
Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a
new Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Preferred Securities
so converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver upon
conversion of Debentures, shares of Common Stock reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of the
Debentures to the converting Holder of Preferred Securities free and clear
of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of Common Stock (and all requirements to list
Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common Stock
to the Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder of Preferred Securities upon conversion
of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock
B-13
<PAGE>
by the Trust upon conversion of the Preferred Securities. The Sponsor shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Preferred Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has
been paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Preferred
Securities or set forth in this Exhibit B to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.01 of the Declaration, then the Holders of outstanding
Securities will be entitled to vote on such amendment or proposal as a
single class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class of Securities will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
Majority in liquidation amount of such class of Securities and (B)
amendments to the Declaration shall be subject to such further requirements
as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with
B-14
<PAGE>
respect to such amendment, modification or termination. The Property Trustee
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
In addition to obtaining the foregoing approvals of such Holders of the
Preferred Securities and Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that for United States federal income tax purposes the
Trust will not be classified as other than a grantor trust on account of such
action.
If an Event of Default has occurred and is continuing, then the Holders of a
Majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
under the
B-15
<PAGE>
Debentures, a Holder of Preferred Securities, to the extent permitted by
applicable law, may, after a period of 30 days has elapsed since such Holder's
written request to the Property Trustee to enforce such rights, institute a
legal proceeding directly against the Sponsor to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person; provided further, that, if an
Event of Default has occurred and is continuing and such event is attributed to
the failure of the Sponsor to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Company will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the Holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Lyondell or by any Affiliate of
Lyondell shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
B-16
<PAGE>
Except as provided in this paragraph 6, Holders of the Preferred Securities
will have no rights to increase or decrease the number of Trustees or to
appoint, remove or replace a Trustee, which voting rights are vested exclusively
in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee[, including the subordination provisions therein,] and
(ii) the Indenture and the Debentures, including the subordination provisions
of the Indenture.
B-17
<PAGE>
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no
preemptive or similar rights to subscribe to any additional Preferred Securities
or Common Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Preferred Securities without charge on written request to the Trust at its
principal place of business.
B-18
<PAGE>
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE
FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
LYONDELL TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities: ____________
___________
Aggregate Liquidation Amount: $____________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
Lyondell Trust I
____% Convertible Preferred Trust Securities, Series A
(liquidation amount $[50][25] per Preferred Security)
B-19
<PAGE>
Lyondell Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
and designated the ____% Convertible Preferred Trust Securities, Series A
(liquidation amount $[50][25] per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of ___________, ____, as the same may be amended
from time to time (the "Declaration") including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Lyondell
Chemical Company, a Delaware corporation ("Lyondell"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement of Lyondell dated as of __________, ____
(the "Guarantee") to the extent provided therein. The Trust will furnish a copy
of the Declaration, the Guarantee and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have (i) agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Supplemental Indenture) as and to the extent provided in the
Indenture, and (ii) agreed to the terms of the Guarantee, including that the
Guarantee [is subordinate and junior in right of payment to] [is pari passu to]
all other liabilities of Lyondell, including the Debentures, except those made
[pari passu or] subordinate by their terms, and senior to all capital stock
[(other than the most senior preferred stock issued, from time to time, if any,
by Lyondell, which preferred stock will rank pari passu with the Guarantee)] now
or hereafter issued by Lyondell and to any guarantee now or hereafter entered
into by Lyondell in respect of any of its capital stock [(other than the most
senior preferred stock issued, from time to time, if any, by Lyondell)].
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
B-20
<PAGE>
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ____ day of __________, ____.
LYONDELL TRUST I
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
B-21
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from _________,
____, and will be payable quarterly in arrears, on ______, ______, ______ and
______ of each year, commencing on ________, ____, but only if and to the extent
that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Lyondell may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, Lyondell may commence a new Extension Period, subject to the above
requirements. Payments of accumulated Distributions will be payable to Holders
of Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
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<PAGE>
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration.]
B-23
<PAGE>
[CONVERSION REQUEST
To: ________________, as Property Trustee of Lyondell Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of ______, ____ (as amended from time to
time, the "Declaration"), by _________, ________ and __________ as Regular
Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The First
National Bank of Chicago, as the Property Trustee, Lyondell Chemical Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to the Declaration)
in accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
Lyondell Trust I (at the rate of exchange specified in the terms of the
Preferred Securities set forth as Exhibit B to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned into Common
Stock (at the conversion rate specified in the terms of the Preferred Securities
set forth as Exhibit B to the Declaration, subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration)).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
B-24
<PAGE>
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to be
issued, along with the address or addresses of such
person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
__________________
**(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership
B-25
<PAGE>
__________________
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
B-26
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax identification number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-27
<PAGE>
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust I dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Common Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________), and each with a liquidation amount with respect to the
assets of the Trust of $[50][25] per Common Security, are hereby designated as
"____% Convertible Common Trust Securities, Series A". The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex I, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice. The Common
Securities are to be issued and sold to Lyondell in consideration of
$_____________ in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Lyondell having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $[50][25] per Common Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded quarterly. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds
<PAGE>
on hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
___________, ____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of Common
Securities as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be one business day prior to the relevant
Distribution date, and if the Preferred Securities are no longer in book-
entry only form, the relevant record dates for the Common Securities
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<PAGE>
will be the fifteenth (15th) day of the month prior to the relevant
Distribution date, which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions payable on any
Common Securities that are not punctually paid on any Distribution payment
date as a result of Lyondell's having failed to make the corresponding
interest payment on the Debentures will forthwith cease to be payable to the
person in whose name such Common Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Common Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Lyondell has elected to make a full or partial
payment of interest accrued on the Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions
are payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
C-3
<PAGE>
satisfaction of liabilities to the creditors of the Trust, an amount equal
to the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and the Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on, such Preferred Securities and the
Common Securities, shall be distributed Pro Rata to the Holders of the
Preferred Securities and the Common Securities in exchange for such
Securities.
If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Preferred Securities and the Common Securities shall be paid, subject to
the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Common Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
C-4
<PAGE>
interest equal to accumulated and unpaid Distributions on, such Common
Securities until such Certificates are presented to Lyondell or its agent
for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only if
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $[50][25] per Preferred Security and
Common Security plus an amount equal to accumulated and unpaid Distributions
thereon to the date of redemption, payable in cash (the "Redemption Price").
The date of any such repayment or redemption of Preferred Securities and
Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in paragraph 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the Common
Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of
C-5
<PAGE>
Default has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the
Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Common
Securities unless all accumulated and unpaid Distributions have been paid on
all Common Securities for all quarterly Distribution periods terminating on
or prior to the date of redemption.
C-6
<PAGE>
(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed
will be redeemed Pro Rata from each Holder of Common Securities
(subject to adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this
paragraph 4 (which notice will be irrevocable), then immediately prior
to the close of business on the redemption date, provided that Lyondell
has paid to the Property Trustee in immediately available funds a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, Distributions will cease to accumulate on
the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Common Securities so called for redemption will cease, except the
right of the Holders of such Common Securities to receive the
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Common Securities which have
been so called for redemption. If any date fixed for redemption of
Common Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business
C-7
<PAGE>
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Common Securities is improperly
withheld or refused and not paid by the Property Trustee, Distributions
on such Common Securities will continue to accumulate, from the
original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to Holders of the Common Securities.
[5. CONVERSION RIGHTS.
The Holders of Common Securities shall have the right at any time prior to
the close of business on , ____ or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause the Conversion Agent to
convert Common Securities, on behalf of the converting Holders, into shares of
Common Stock in the manner described herein on and subject to the following
terms and conditions:
(a) The Common Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by the
Trust on the basis of one Common Security per $[50][25] principal amount of
Debentures, and immediately convert such amount of Debentures into fully
paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50][25] principal amount of Debentures (which
is equivalent to a
C-8
<PAGE>
conversion price of $__ per share of Common Stock, subject to certain
adjustments set forth in Sections __ and __ of the Supplemental Indenture
(as so adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Common Securities on behalf of such Holder
(the "Conversion Request"), together, if the Common Securities are in
certificated form, with such Common Security Certificates. The Conversion
Request shall (i) set forth the number of Common Securities to be converted
and the name or names, if other than the Holder, in which the shares of
Common Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Common Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock, subject to certain adjustments set forth in the Supplemental
Indenture (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Common Securities for a portion of the Debentures held by the Trust, and the
Trust shall, upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Sponsor
of the Holder's election to convert such Debentures into shares of Common
Stock. If a Common Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date,
then, notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Common Security is registered at the close of business on such record
date, and (other than a Common Security or a portion of a Common Security
called for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered for
conversion, the Common Security must be accompanied by payment of an amount
equal to the Distribution payable on such Distribution payment date. Except
as provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any conversion
on account of any accumulated and unpaid Distributions accumulated on the
Common Securities surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Common Stock issued upon
such conversion, and the delivery of Common Stock upon conversion of the
Common Securities shall be deemed to constitute full payment for all
accumulated and unpaid Distributions on the Common Securities.
C-9
<PAGE>
Common Securities shall be deemed to have been converted immediately prior
to the close of business on the day on which a Notice of Conversion relating
to such Common Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons entitled
to receive Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the Conversion
Date, the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if any,
in lieu of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the Notice of
Conversion, and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such
Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof appoints
The First National Bank of Chicago as the "Conversion Agent" for the purpose
of effecting the conversion of Common Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Common Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Common Securities from
time to time for Debentures held by the Trust in connection with the
conversion of such Common Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Common Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Common Securities so
converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time
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<PAGE>
to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Sponsor shall be entitled to
deliver upon conversion of Debentures, shares of Common Stock reacquired and
held in the treasury of the Sponsor (in lieu of the issuance of authorized
and unissued shares of Common Stock), so long as any such treasury shares
are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of Common
Securities free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of the
Sponsor and the Trust shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Common Stock
(and all requirements to list Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the
Debentures and the Trust to lawfully deliver Common Stock to each Holder of
Common Securities upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Common Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that in which the Common Securities so converted were registered, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Common
Securities or set forth in this Exhibit C to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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<PAGE>
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment,
removal or replacement to be approved by Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on such amendment or
proposal as a single class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class of Securities will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a Majority in liquidation amount
of such class of Securities, (B) the rights of Holders of Common Securities
under Section 5.02 of the Declaration to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the consent
of each Holder of Common Securities, and (C) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take
C-12
<PAGE>
any action in accordance with the directions of the Holders of Securities unless
the Property Trustee shall have received, at the expense of the Sponsor, an
Opinion of Counsel experienced in such matters to the effect that the Trust will
not be classified for United States federal income tax purposes as other than a
grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities
and Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect that for United States federal income tax purposes the Trust will not be
classified as other than a grantor trust on account of such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
C-13
<PAGE>
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for
the Trust to redeem and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common Securities
to any payment, Distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of
C-14
<PAGE>
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of the
Trust by check mailed to the address of the persons entitled thereto and that
the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Common Securities without charge on written request to the Trust at its
principal place of business.
C-15
<PAGE>
Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
________________ ____________________
Certificate Evidencing Common Securities
of
Lyondell Trust I
____% Convertible Common Trust Securities, Series A
(liquidation amount $[50][25] per Common Security)
Lyondell Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing common undivided beneficial
interests in the assets of the Trust and designated the "____% Convertible
Common Trust Securities, Series A" (liquidation amount $[50][25] per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below) including, without limitation, Section 9.01(c) thereof. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this Certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of __________, ____, as the same may be amended from
time to time (the "Declaration") including the designation of the terms of
Common Securities as set forth in Exhibit C thereto. The Common Securities and
the Preferred Securities issued by the Trust
C-16
<PAGE>
pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Debentures (as defined in the Declaration)
issued by Lyondell Chemical Company, a Delaware corporation ("Lyondell"), to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust will
furnish a copy of the Declaration and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Supplemental Indenture) as and to the extent provided in the
Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ___ day of _____________, ____.
LYONDELL TRUST I
By ________________________, as Regular Trustee
Name:
Title: Regular Trustee
By _________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
C-17
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate additional distributions thereon at the
Coupon Rate per annum (to the extent permitted by applicable law) compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from _________, ____
and will be payable quarterly in arrears, on _____________, ____________,
_____________ and _____________ of each year, commencing on ________, ____, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Lyondell shall not be in
default in the payment of interest on the Debentures, Lyondell has the right
under the Indenture for the Debentures to defer payments of interest on the
Debentures by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions thereon
(to the extent permitted by applicable law but not at a rate greater than the
rate at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures.
Prior to the termination of any such Extension Period, Lyondell may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period and
the payment of all amounts then due, Lyondell may commence a new Extension
Period, subject to the above requirements. Payments of accumulated
Distributions will be payable to Holders of Common Securities as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period.
C-18
<PAGE>
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock (as
defined in the Declaration), through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock, in the manner and according to the terms set forth in the
Declaration.]
C-19
<PAGE>
[CONVERSION REQUEST
To: ______________________,
as Property Trustee of Lyondell Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of _____________ , ____ (as amended from
time to time, the "Declaration"), by _________, _____________ and ____________,
as Regular Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The
First National Bank of Chicago, as the Property Trustee, Lyondell Chemical
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by Lyondell Trust I (at the rate of exchange specified in the terms of the
Common Securities set forth as Exhibit C to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration), subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
_______________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the
C-20
<PAGE>
shares of Common Stock are to be issued, along with the
address or addresses of such person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:* ____________
______________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
C-21
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-22
<PAGE>
EXHIBIT 4.5.2
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
LYONDELL TRUST II
_______________________________________
DATED AS OF ___________, 1999
_______________________________________
================================================================================
<PAGE>
TABLE OF CONTENTS*
PAGE
----
ARTICLE 1
Definitions
Section 1.01. Definitions......................................... 2
Affiliate........................................... 2
Book Entry Interest................................. 2
Business Day........................................ 3
Business Trust Act.................................. 3
Certificate......................................... 3
Certificate of Trust................................ 3
Clearing Agency..................................... 3
Clearing Agency Participant......................... 3
Closing Date........................................ 3
Code................................................ 3
Commission.......................................... 3
Common Securities................................... 3
Common Security Certificate......................... 3
Common Stock........................................ 4
Conversion Agent.................................... 4
Covered Person...................................... 4
Creditor............................................ 4
Debenture Trustee................................... 4
Debentures.......................................... 4
Definitive Preferred Security Certificates.......... 4
Delaware Trustee.................................... 4
Depositary Agreement................................ 4
Distribution........................................ 4
DTC................................................. 4
Event of Default.................................... 4
Exchange............................................ 4
Exchange Act........................................ 4
Fiscal Year......................................... 5
Global Certificate.................................. 5
Holder.............................................. 5
Holder Direct Action................................ 5
- -----------------------
*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
i
<PAGE>
PAGE
----
Indemnified Person.................................. 5
Indenture........................................... 5
Indenture Event of Default.......................... 5
Investment Company.................................. 5
Investment Company Act.............................. 5
Legal Action........................................ 5
Liquidation Distribution............................ 5
List of Holders..................................... 5
Lyondell............................................ 5
Sponsor............................................. 5
Majority in liquidation amount of the Securities.... 5
NASD................................................ 6
Nasdaq.............................................. 6
1933 Act Registration Statement..................... 6
1934 Act Registration Statement..................... 6
Officers' Certificate............................... 6
Opinion of Counsel.................................. 7
Option Closing Date................................. 7
Original Declaration................................ 7
Paying Agent........................................ 7
Payment Amount...................................... 7
Person.............................................. 7
Preferred Guarantee................................. 7
Preferred Securities................................ 7
Preferred Security Beneficial Owner................. 7
Preferred Security Certificate...................... 7
Property Trustee.................................... 7
Property Account.................................... 8
Quorum.............................................. 8
Regular Trustee..................................... 8
Related Party....................................... 8
Resignation Request................................. 8
Responsible Officer................................. 8
Rule 3a-7........................................... 8
Securities.......................................... 8
Securities Act...................................... 8
Special Event....................................... 8
Sponsor............................................. 8
Lyondell............................................ 8
Successor Delaware Trustee.......................... 8
Successor Entity.................................... 8
Successor Property Trustee.......................... 9
ii
<PAGE>
PAGE
----
Successor Securities................................... 9
Super Majority......................................... 9
Supplemental Indenture................................. 9
10% in liquidation amount of the Securities............ 9
Treasury Regulations................................... 9
Trust.................................................. 9
Trustee................................................ 9
Trustees............................................... 9
Trust Indenture Act.................................... 10
Underwriting Agreement................................. 10
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application....................... 10
Section 2.02. Lists of Holders of Preferred Securities............... 10
Section 2.03. Reports by the Property Trustee........................ 11
Section 2.04. Periodic Reports to the Property Trustee............... 11
Section 2.05. Evidence of Compliance with Conditions Precedent....... 11
Section 2.06. Events of Default; Waiver.............................. 11
Section 2.07. Disclosure of Information.............................. 13
ARTICLE 3
Organization
Section 3.01. Name................................................... 14
Section 3.02. Office................................................. 14
Section 3.03. Issuance of the Securities............................. 14
Section 3.04. Purchase of Debentures................................. 15
Section 3.05. Purpose................................................ 15
Section 3.06. Authority.............................................. 16
Section 3.07. Title to Property of the Trust......................... 16
Section 3.08. Powers and Duties of the Regular Trustees.............. 16
Section 3.09. Prohibition of Actions by the Trust and the Trustees... 19
Section 3.10. Powers and Duties of the Property Trustee.............. 20
Section 3.11. Delaware Trustee....................................... 24
Section 3.12. Certain Rights and Duties of the Property Trustee...... 24
Section 3.13. Registration Statement and Related Matters............. 26
Section 3.14. Filing of Amendments to Certificate of Trust........... 28
Section 3.15. Execution of Documents by the Regular Trustees......... 28
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities............................................. 28
iii
<PAGE>
PAGE
----
Section 3.17. Duration of the Trust................................... 28
Section 3.18. Mergers................................................. 28
Section 3.19. Property Trustee May File Proofs of Claim............... 30
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor............ 31
Section 4.02. Expenses................................................ 32
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications...................... 33
Section 5.02. Appointment, Removal and Resignation of the Trustees.... 35
Section 5.03. Vacancies among the Trustees............................ 37
Section 5.04. Effect of Vacancies..................................... 37
Section 5.05. Meetings................................................ 37
Section 5.06. Delegation of Power..................................... 38
Section 5.07. Merger, Conversion, Consolidation or Succession to
Business................................................ 38
ARTICLE 6
Distributions
Section 6.01. Distributions........................................... 38
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities............. 39
Section 7.02. Conversion Agent........................................ 40
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust................................ 41
iv
<PAGE>
PAGE
----
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities............................... 42
Section 9.02. Transfer of Certificates............................. 42
Section 9.03. Deemed Security Holders.............................. 42
Section 9.04. Book Entry Interests................................. 43
Section 9.05. Notices to Holders of Certificates................... 44
Section 9.06. Appointment of Successor Clearing Agency............. 44
Section 9.07. Definitive Preferred Securities Certificates......... 44
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.... 45
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation......................................... 45
Section 10.02. Indemnification..................................... 46
Section 10.03. Outside Business.................................... 46
ARTICLE 11
Accounting
Section 11.01. Fiscal Year......................................... 47
Section 11.02. Certain Accounting Matters.......................... 47
Section 11.03. Banking............................................. 48
Section 11.04. Withholding......................................... 48
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.......................................... 48
Section 12.02. Meetings of the Holders of Securities; Action by
Written Consent..................................... 50
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property
Trustee............................................. 51
Section 13.02. Representations and Warranties of the Delaware
Trustee............................................. 52
v
<PAGE>
PAGE
----
ARTICLE 14
Miscellaneous
Section 14.01. Notices........................................ 53
Section 14.02. Undertaking for Costs.......................... 54
Section 14.03. Governing Law.................................. 55
Section 14.04. Headings....................................... 55
Section 14.05. Partial Enforceability......................... 55
Section 14.06. Counterparts................................... 55
Section 14.07. Intention of the Parties....................... 55
Section 14.08. Successors and Assigns......................... 56
Section 14.09. No Recourse.................................... 56
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
vi
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LYONDELL TRUST II
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of __________, ____ by Kerry A. Galvin, ___________ and
___________, as Regular Trustees (the "Regular Trustees"), The First National
Bank of Chicago, as Property Trustee (the "Property Trustee") and First Chicago
Delaware Inc., as Delaware Trustee (the "Delaware Trustee") (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Lyondell
Chemical Company, a Delaware corporation, as trust sponsor ("Lyondell" or the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration
of Trust dated as of November 9, 1998 (the "Original Declaration") in order to
establish Lyondell Trust II, a statutory business trust (the "Trust"), under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware on
November 9, 1998; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities (as
hereinafter defined) representing preferred undivided beneficial interests in
the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Lyondell issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Lyondell in exchange for cash
and investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
<PAGE>
Trustees declare that all Debentures referred to in clauses (i) and (ii) of the
previous paragraph purchased by the Trust will be held in trust for the benefit
of the Holders (as hereinafter defined) from time to time, of the Certificates
(as hereinafter defined) representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE 1
Definitions
Section 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
2
<PAGE>
transfers of which shall be maintained and made through book entries by such
Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and State of
New York, Chicago, Illinois or Houston, Texas are authorized or required by law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S) 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
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"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
["Common Stock" means the common stock, par value $1.00 per share, of
Lyondell or any other class of stock, other securities, cash or other assets
into which the Debentures are then convertible.]
["Conversion Agent" has the meaning specified in Section 7.02.]
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Lyondell or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of Subordinated Debentures issued by Lyondell
under the Indenture to the Property Trustee and entitled the "____% Subordinated
Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
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"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Conversion Agent, any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"Indenture" means the Subordinated Indenture dated as of _______ __, ____
between Lyondell and the Debenture Trustee as supplemented by the _______
Supplemental Indenture thereto dated as of ____________, ____, pursuant to which
the Debentures are to be issued.
"Indenture Event of Default" means that an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
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"Lyondell" or "Sponsor" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in
Section 3.13.
"1934 Act Registration Statement" has the meaning specified in
Section 3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Sponsor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 2.05 shall be the principal executive, financial or
accounting officer of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
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(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, which may be an employee of
the Sponsor but not an employee of the Trust or the Property Trustee, and who
shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel
pertaining to federal income tax matters may rely on published rulings of the
Internal Revenue Service.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of __________,
____ of Lyondell in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
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"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Lyondell or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Lyondell.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Property Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities as
set forth in paragraph 4 of Exhibits B and C hereto.
"Sponsor" or " Lyondell" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
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amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.02(b).
"Successor Securities" has the meaning specified in Section 3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental Indenture dated as of
________, ____ between Lyondell and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or " Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ____ among the Trust, the Sponsor and _______ and _________, as
representatives of the several underwriters named therein.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or
the rules and regulations of the Commission, shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee unless the Property Trustee is registrar for
the Securities, (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time that the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as
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is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under (S)(S)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Securities such reports as are required by (S) 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by (S) 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by (S) 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by (S) 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to (S) 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each Fiscal Year).
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration which relate to any of the matters
set forth in (S) 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to (S) 314(c) may be given in the
form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided above in Section 2.06(a) or below in this
Section 2.06(b), the Event of Default under this Declaration shall also not
be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided above in Section
2.06(a) or below in this Section 2.06(b), the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Common
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Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to
have waived any such Event of Default and all Events of Defaults with respect to
the Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
Holders of Preferred Securities as provided in the Declaration, the Holders of
Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon waiver, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the Holders
of the Securities in accordance with (S) 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to (S) 312 of the Trust Indenture Act, nor shall the
Property
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Trustee be held accountable by reason of mailing any material pursuant to a
request made under (S) 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.01. Name.
The Trust continued by this Declaration is named "Lyondell Trust II" as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.02. Office.
The address of the principal office of the Trust is c/o Lyondell Chemical
Company, 1221 McKinney Street, Suite 1600, Houston, Texas 77010. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
Section 3.03. Issuance of the Securities.
On __________, ____ the Sponsor, on behalf of the Trust and pursuant to the
Original Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver to (i) the underwriters named in the Underwriting Agreement, a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.04, in an aggregate amount of ___________
Preferred Securities having an aggregate liquidation amount of $__________,
against receipt of the aggregate purchase price of such Preferred Securities of
$___________, and (ii) the Sponsor, Common Securities Certificates, registered
in the name of the Sponsor, in an aggregate amount of ________ Common Securities
having an aggregate liquidation amount of $____________, against receipt of the
aggregate purchase price of such Common Securities of $___________. In the
event and to the extent the overallotment option granted by the Trust pursuant
to the Underwriting Agreement is exercised by such underwriters, on the Option
Closing Date the Regular Trustees, on behalf of the Trust, shall execute and
deliver to such underwriters a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of up to ___________ Preferred
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Securities having an aggregate liquidation amount of up to $___________, against
receipt of the aggregate purchase price of such Preferred Securities of up to
$____________.
Section 3.04. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and delivery
of this Declaration, the Regular Trustees, on behalf of the Trust, shall
purchase from the Sponsor with the proceeds received by the Trust from the sale
of the Securities on such date pursuant to Section 3.03, at a purchase price of
100% of the principal amount thereof, Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount equal to $___________,
and, in satisfaction of the purchase price for such Debentures, the Regular
Trustee, on behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of $___________. In the event the overallotment option granted
by the Trust with respect to the Preferred Securities pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on the
Option Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.03, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $__________, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased.
Section 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue and
sell Preferred Securities for cash and use the proceeds of such sales to acquire
from Lyondell Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii) to
issue and sell Common Securities to Lyondell for cash and use the proceeds of
such sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (b) except as otherwise limited
herein, to engage in only those other activities
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necessary, convenient or incidental thereto, including such other activities
specifically authorized in this Declaration. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge any
of its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
Section 3.06. Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and the
Property Account or unless otherwise provided in this Declaration, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have
undivided beneficial interests in the assets of the Trust.
Section 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty to
cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date and (y) any subsequent issuance of
Preferred Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting Agreement;
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(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of (S) 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by (S)
314(a)(4)
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of the Trust Indenture Act, which certificate may be executed by any Regular
Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing the
Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes of the Trust and the
activities of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures will be
treated as indebtedness of the Sponsor for United States federal income tax
purposes;
(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust,
and to comply with any requirements imposed by any taxing authority on holders
of instruments treated as indebtedness for United States federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
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(S) 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05, and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers or any of the authority of the Property Trustee set forth in Section
3.10.
The Regular Trustees shall take all actions on behalf of the Trust that are
not specifically required by this Declaration to be taken by any other Trustee.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.08
shall be reimbursed by the Sponsor.
Section 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as otherwise
expressly provided herein;
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(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee or exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures, without, in each case, obtaining
the prior approval of the Holders of a Majority in liquidation amount of all
outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, unless in the case of
this clause (j) the Property Trustee shall have received an Opinion of Counsel
experienced in such matters to the effect that such amendment, modification or
termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor
trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
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Section 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with
Section 6.01. Funds in the Property Account shall be held uninvested, and
without liability for interest thereon, until disbursed in accordance with
this Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the occurrence of
a Special Event or upon the election of the Holder of Common Securities to
distribute the Debentures to Holders of Securities and dissolve the Trust;
and
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(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject to
Section 3.10(e), shall for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures under the Indenture, subject
to the rights of the Holders of the Preferred Securities pursuant to the
terms of this Declaration, the Business Trust Act and the Trust Indenture
Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Company will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
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not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to the Property Trustee,
transmit by mail, first class postage prepaid, to the holders of the Securities,
as their names and addresses appear upon the register, notice of such defaults
with respect to the Securities known to the Property Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 3.10(g) being hereby defined to be
an Indenture Event of Default, not including any periods of grace provided for
in the Indenture and irrespective of the giving of any notice provided therein);
provided, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers, of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
The Property Trustee shall not be deemed to have knowledge of any default,
except (i) a default in the payment of principal, premium or interest on the
Debentures or (ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged with the administration
of this Declaration shall have obtained written notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds thereof
distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with (S) 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee,
after consultation with the Regular Trustees, at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(q).
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(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from Lyondell of its election to
defer payments of interest on the Debentures by extending the interest payment
period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
Section 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of (S) 3807(a) of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
Section 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration, and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee hereunder or
under the Indenture, or exercising any trust or power conferred upon the
Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
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established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, request and rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of its
employees) selected by it in good faith and with due care and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have offered to the
Property Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
Property Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured or waived) to exercise such of the
rights and powers vested in it by this Declaration, and to use the same
degree of care and skill in this exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; and
(v) any action taken by the Property Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to inquire
as to the authority of the Property Trustee to so act, or as to its
compliance with any of the terms and provisions of this Declaration, both
of which
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shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action.
(d) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
Section 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Lyondell, as the sponsor of
the Trust, was authorized (i) to file with the Commission and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (File
No. 333-60429) (the "1933 Act Registration Statement") including any pre-
effective or post-effective amendments thereto, relating to the registration
under the Securities Act of the Preferred Securities and (b) if Lyondell shall
deem it desirable, a Registration Statement on Form 8-A or other appropriate
form (the "1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act; (ii) if Lyondell shall deem it
desirable, to prepare and file with the New York Stock Exchange or one or more
national securities exchange(s) (each, an "Exchange") or the National
Association of Securities Dealers, Inc. (the "NASD") and execute on behalf of
the Trust a listing application or applications and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and all other papers
and documents as Lyondell, on behalf of the Trust, may deem necessary or
desirable to register the Preferred Securities under the securities or "Blue
Sky" laws of such jurisdictions as Lyondell on behalf of the Trust, may deem
necessary or desirable; and (iv) to negotiate the terms and execute on behalf of
the Trust the Underwriting Agreement. In the event that any filing referred to
in clauses (i)-(iii) above is required by the rules and regulations of the
Commission, any Exchange, Nasdaq, the NASD or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, and Lyondell are hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee and
the Delaware Trustee, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws. In connection
with all of the foregoing, Lyondell and each Trustee, solely in its capacity as
Trustee of the Trust, have constituted and appointed, and hereby confirm the
appointment of, Dan F. Smith, Jeffrey R. Pendergraft and Edward W. Rich and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for
Lyondell or such Trustee or in Lyondell's or such Trustee's name, place and
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stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as Lyondell or such Trustee might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State
of Delaware on November 9, 1998 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments, if any, to
the Certificate of Trust as the Trustees shall deem necessary or desirable.
Section 3.15. Execution of Documents by the Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall have existence until ___________, ____.
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Section 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, except as described
in Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or
the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses the same powers and duties as the Property Trustee as the holder
of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities will
be listed upon notification of issuance, on any national securities
exchange or with another organization in which the Preferred Securities are
then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior to
such transaction, such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
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(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received an
Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Trust (or
the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an
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entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
Section 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
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Securities or the rights of any Holder thereof to authorize the Property Trustee
to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common Securities
issued by the Trust at the same time as the Preferred Securities to be issued on
such date are issued, such purchase to be in an amount equal to 3% of the total
capital of the Trust (including for this purpose the maximum amount of Preferred
Securities, if any, which may be issued on the Option Closing Date pursuant to
the exercise of the overallotment option set forth in the Underwriting
Agreement).
Section 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
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Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this
Section 4.02.
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace, the
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of Lyondell;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and otherwise is permitted to
act as a Trustee hereunder under the laws of the State of Delaware, except
that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Property
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Trustee shall also be the Delaware Trustee and Section 3.11 shall have
no application; and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
[to come]
c/o LYONDELL CHEMICAL COMPANY
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(c) There shall at all times be one Trustee which shall act as the Property
Trustee. In order to act as the Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation,
national banking association or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If such
corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.01(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
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If at any time the Property Trustee shall cease to satisfy the requirements
of clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of (S) 310(b)
of the Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in (S) 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions of
(S) 310(b) of the Trust Indenture Act. The Preferred Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in (S) 310(b) of the Trust
Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The First
National Bank of Chicago, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
Section 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.
(b) (i) The Trustee that acts as the Property Trustee shall not be removed
in accordance with Section 5.02(a) until a Successor Property Trustee possessing
the qualifications to act as the Property Trustee under Section 5.01(c) (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
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and delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing the
qualifications to act as the Delaware Trustee under Section 5.01(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications to
act as the Property Trustee under Section 5.01(c) has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7, until the assets of the Trust
have been completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery to the Sponsor and the Trust of a Resignation
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Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee, as the case may be. Such court may thereupon
after prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the case
may be.
Section 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees
is not reduced pursuant to Section 5.01 or if the number of Trustees is
increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action
of the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
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vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any registration statement or amendment thereto or
other document or schedule filed with the Commission or making any other
governmental filing (including, without limitation, the filings referred to in
Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.07. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, shall be a party,
or any Person succeeding to all or substantially all of the corporate trust
business of the Property Trustee or the Delaware Trustee or the Regular Trustee,
as the case may be, shall be the successor of the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, hereunder,
provided that such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 6
Distributions
Section 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant
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Holder's Securities as set forth in Exhibits B and C hereto ("Distributions").
If and to the extent that Lyondell makes a payment of interest (including
Compounded Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to promptly make a Distribution of
the Payment Amount to Holders in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto.
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue on behalf of the Trust Securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with Section 7.01(b) and for the consideration
specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee who shall have signed
any of the Certificates shall cease to be such Regular Trustee before the
Certificate so signed shall be delivered by the Trust, such Certificate
nevertheless may be delivered as though the person who signed such Certificate
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons as, at the actual date of the execution of
such Certificate, shall be the
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Regular Trustees, although at the date of the execution and delivery of this
Declaration any such person was not a Regular Trustee. Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which Securities may be
listed or traded, or with any rule or regulation of the Clearing Agency, or to
conform to usage. Pending the preparation of definitive Certificates, the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each temporary
Certificate shall be executed by the Regular Trustees (or, if there are more
than two Regular Trustees, by any two of the Regular Trustees) on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Lyondell the $10
constituting initial trust assets as set forth in the Original Declaration.
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[Section 7.02. Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities may be
presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Conversion
Agent shall be entitled to the rights and protections extended to the Property
Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion Agent for
the Preferred Securities.]
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders
of the Securities in accordance with the terms of the Securities; or
(ii) when all of the Debentures shall have been distributed to the Holders
of the Securities in exchange for all of the Securities in accordance with the
terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17[; or
(iv) upon the distribution of Common Stock to all Securities Holders upon
conversion of all outstanding Securities.]
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The
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Trustees shall so file such a certificate as soon as practicable after the
occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws). To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void.
Section 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder
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upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
Section 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance (including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement), will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.07. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein in
Section 9.07 or in Rule 3a-7 (if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, shall have no obligation to the Preferred Security
Beneficial Owners;
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(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants, provided, that
solely for the purposes of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in
this Declaration, so long as definitive Preferred Security Certificates
have not been issued (pursuant to Section 9.07 hereof), the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in
whole or in part.
Section 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to be
given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall, except
in Rule 3a-7 (if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7) with respect to the Property Trustee,
have no notice obligations to the Preferred Security Beneficial Owners.
Section 9.06. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
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Section 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such instructions.
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees) on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.08, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
Section 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by
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reason of gross negligence (or, in the case of the Property Trustee, negligence)
or willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the termination of this
Declaration or the resignation or removal of any Trustee.
Section 10.03. Outside Business.
The Sponsor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
Accounting
Section 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees shall
keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
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(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be prepared
and mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply with the
periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
such financial statements for such Fiscal Year shall be examined and reported on
by a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to each
Holder of Securities any annual United States federal income tax information
statement required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
Section 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
Section 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request, and
the Holders shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit
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amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed overwithholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount to be
withheld was not withheld from a Distribution, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment or modification to this Declaration shall be
made, and any such purported amendment shall be void and ineffective: (A) unless
the Regular Trustees shall have first received: (x) an Officers' Certificate
that such amendment is permitted by, and conforms to, the terms of this
Declaration; and (y) an Opinion of Counsel that such amendment is permitted by,
and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a grantor trust; (y)
reduce or otherwise adversely affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or (z) cause the Trust to be deemed to
be an Investment Company required to be registered under the Investment Company
Act; (ii) at such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(iii) Section 4.02, Section 9.01(c) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities; (iv) no amendment
which adversely affects the rights, powers and privileges of the Property
Trustee or the Delaware Trustee shall be made without the consent of the
Property Trustee or the Delaware Trustee, respectively; (v) Article 4 shall not
be amended without the consent of the Sponsor; and (vi) the rights of the
Holders of Common Securities under Article 5 to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
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(b) Notwithstanding Section 12.02(a), this Declaration may be amended without
the consent of the Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration, (iii) add to the
covenants, restrictions or obligations of the Sponsor, (iv) conform to any
changes in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) or any change in
interpretation or application of Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or questions
arising under this Declaration which shall not be inconsistent with the other
provisions of this Declaration, (vi) modify, eliminate or add to any provisions
of this Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure that
the Trust will not be required to register as an Investment Company under the
Investment Company Act, and (vii) pursuant to Section 5.02, evidence the
acceptance of the appointment of a successor Trustee or fill a vacancy created
by an increase in the number of Regular Trustees, which amendment does not
adversely affect in any material respect the rights, preferences or privileges
of the Holders.
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which the Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
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(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of the Holders of Securities:
(i) Notice of any such meeting shall be given by mail to all the Holders of
Securities having a right to vote thereat not less than seven (7) days nor
more than sixty (60) days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange or automated
quotation system on which the Preferred Securities are then listed, traded or
quoted, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by Holders of Securities owning
not less than the minimum aggregate liquidation amount of Securities that
would be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the Holders
of Securities for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted by
the Regular Trustees or by such other Person that the Regular Trustees may
designate.
(iv) Unless otherwise provided in the Business Trust Act, this Declaration
or the rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted,
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the Regular Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including notice of
the time, place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(iii) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or notice
to, any banking authority which supervises or regulates the Property
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Trustee is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in Section
5.01(c).
Section 13.02. Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee represents and warrants
to the Trust and the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as the
Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware Trustee of
this Declaration have been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(iii) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Delaware
Trustee, if any, is required for the execution, delivery or performance by the
Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and is a Person that
satisfies for the Trust (S) 3807(a) of the Business Trust Act.
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ARTICLE 14
MISCELLANEOUS
Section 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by
first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
Lyondell Trust II
c/o Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(b) if given to the Property Trustee, at the mailing address of the Property
Trustee set forth below (or such other address as the Property Trustee may give
notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention:
Telecopy:
(d) if given to the Holder of the Common Securities, at the mailing address of
the Sponsor set forth below (or such other address as the Holder of the Common
Securities may give notice of to the Trust):
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Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices shall be deemed to have been given, when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Declaration, or in any suit against the Property Trustee for
any action taken or omitted by it as Property Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 14.02 shall not apply to any suit instituted
by the Property Trustee, to any suit instituted by any Holder of Preferred
Securities, or group of Holders of Preferred Securities, holding more than 10%
in aggregate liquidation amount of the outstanding Preferred Securities, or to
any suit instituted by any Holder of Preferred Securities for the enforcement of
the payment of the principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed in such Debentures.
Section 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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Section 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature pages
and this Declaration may be executed by the affixing of the signature of the
Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be classified for
United States federal income tax purposes as an association taxable as a
corporation or partnership but that the Trust be treated as a grantor trust for
United States federal income tax purposes. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
Section 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.09. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions, or for any claim upon
the Securities or otherwise in respect thereof, shall be had against any Holder
of Securities or any Affiliate of a Holder of Securities, solely by reason of
such
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Person's being a Holder of Securities or an Affiliate of a Holder of Securities,
it being understood that the Holder of Securities, solely by reason of being a
Holder of Securities, has limited liability (in accordance with the provisions
of the Business Trust Act) for the liabilities and obligations of the Trust.
Nothing contained in this Section 14.09 shall be construed to limit the exercise
or enforcement, in accordance with the terms of this Declaration, the Preferred
Guarantee and the Indenture, of the rights and remedies against the Trust or the
Sponsor.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
LYONDELL CHEMICAL COMPANY,
as Sponsor
By:______________________________
Name:
Title:
_______________________________
Kerry A. Galvin,
as Regular Trustee
________________________________
[Name],
as Regular Trustee
________________________________
[Name],
as Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:_____________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:_____________________________
Name:
Title:
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EXHIBIT A
CERTIFICATE OF TRUST
OF
LYONDELL TRUST II
THIS CERTIFICATE OF TRUST of Lyondell Trust II (the "Trust"), dated as of
November 9, 1998, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code (S) 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust II.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust at
the time of filing this Certificate of Trust, have executed this Certificate of
Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
_________________________________
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
________________________________
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
________________________________
<PAGE>
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust II dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Preferred Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________) (including up to
_______________________________________________ Dollars ($___________) issuable
upon exercise of the overallotment option set forth in the Underwriting
Agreement), and each with a liquidation amount with respect to the assets of the
Trust of $[50][25] per Preferred Security, are hereby designated as "____%
Convertible Preferred Trust Securities, Series B". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or automated quotation system on
which the Preferred Securities are then listed, traded or quoted. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of Lyondell
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities and the Common Securities so issued and bearing
interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security will
be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $[50][25] per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
B-2
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used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
___________, _____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year, commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the
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Preferred Securities remain in book-entry only form, the relevant record
dates shall be one business day prior to the relevant Distribution date, and
if the Preferred Securities are no longer in book-entry only form, the
relevant record dates will be the fifteenth (15th) day of the month prior to
the relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Preferred Securities that are not punctually paid on any
Distribution payment date as a result of Lyondell's having failed to make
the corresponding interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred Security is registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record
date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless Lyondell has elected to make
a full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the
Preferred Securities will be made as described in paragraph 9 hereof. If any
date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
[(e) In the event of an election by the Holder to convert its Preferred
Securities through the Conversion Agent into Common Stock pursuant to the
terms of the Preferred Securities as set forth in this Exhibit B to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Preferred Securities, or be
required to be made; provided, however, that if a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a Distribution and before the
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opening of business on the corresponding Distribution date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution date will be paid in cash to the person in whose name the
Preferred Security is registered at the close of business on such record
date, and (other than a Preferred Security or a portion of a Preferred
Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to the creditors of the Trust, an amount equal to
the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination, and
after satisfaction of liabilities to the creditors of the Trust, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and the Common Securities and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid Distributions
on, such Preferred Securities and the Common Securities, shall be distributed
Pro Rata to the Holders of the Preferred Securities and the Common Securities in
exchange for such Securities.
If, upon any such dissolution, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation Distribution,
then the amounts payable directly by the Trust on the Preferred Securities and
the Common Securities shall be paid, subject to the next paragraph, on a Pro
Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred
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and is continuing, the Preferred Securities shall have a priority over
the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding and may be canceled by the Regular Trustees, and
(ii) Certificates representing Preferred Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accumulated and unpaid Distributions
on, such Preferred Securities until such Certificates are presented to
Lyondell or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Lyondell, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less
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<PAGE>
than 30 nor more than 60 days' notice, at a redemption price of $[50][25]
per Preferred Security and Common Security plus an amount equal to
accumulated and unpaid Distributions thereon to the date of redemption,
payable in cash (the "Redemption Price"). The date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in paragraph 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the
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theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No
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<PAGE>
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered in
the name of and held of record by DTC (or successor Clearing Agency) or
any other nominee, the Preferred Securities will be redeemed from, and
the distribution of the proceeds of such redemption will be made to,
DTC (or successor Clearing Agency).
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that Lyondell has paid
the Property Trustee, in immediately available funds, a sufficient
amount of cash in connection with the related redemption or maturity of
the Debentures, the Property Trustee will deposit irrevocably with DTC
(or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give
DTC (or successor Clearing Agency) irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities and provided that
Lyondell has paid the Property Trustee, in immediately available funds,
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred Securities
by check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the redemption date, Distributions will cease to
accumulate on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be outstanding and all
rights of Holders of such Preferred Securities so called for redemption
will cease, except the right of the Holders of such Preferred
Securities to receive the
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Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Preferred Securities which
have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by Lyondell pursuant to the Preferred Guarantee,
Distributions on such Preferred Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), Lyondell or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
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<PAGE>
[5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on __________, ____ or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into shares of Common Stock in the manner described herein
on and subject to the following terms and conditions:
(a) The Preferred Securities will be convertible at the office of the
Conversion Agent maintained for such purpose in the Borough of Manhattan,
The City of New York, into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to exchange
such Preferred Securities for a portion of the Debentures theretofore held
by the Trust on the basis of one Preferred Security per $[50][25] principal
amount of Debentures, and immediately convert such amount of Debentures into
fully paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50] [25] principal amount of Debentures (which
is equivalent to a conversion price of $___ per share of Common Stock,
subject to certain adjustments set forth in Sections __ and __ of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Preferred Securities on behalf of such
Holder (the "Conversion Request"), together, if the Preferred Securities are
in certificated form, with such Preferred Security Certificates. The
Conversion Request shall (i) set forth the number of Preferred Securities to
be converted and the name or names, if other than the Holder, in which the
shares of Common Stock should be issued and (ii) direct the Conversion Agent
(a) to exchange such Preferred Securities for a portion of the Debentures
held by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of such
Holder into Common Stock, subject to certain adjustments set forth in the
Supplemental Indenture (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Trust of the Holder's
election to exchange Preferred Securities for a portion of the Debentures
held by the Trust and the Trust shall, upon receipt of such notice, deliver
to the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a
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Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash
to the person in whose name the Preferred Security is registered at the
close of business on such record date, and (other than a Preferred Security
or a portion of a Preferred Security called for redemption on a redemption
date occurring after such record date and on or prior to such Distribution
payment date) when so surrendered for conversion, the Preferred Security
must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date. Except as provided above, neither
the Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated
and unpaid Distributions accumulated on the Preferred Securities surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Preferred Securities shall be deemed to
constitute full payment for all accumulated and unpaid Distributions on the
Preferred Securities. Preferred Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Preferred Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share
to the Person or Persons entitled to receive the same, unless otherwise
directed by the Holder in the Notice of Conversion, and the Conversion Agent
shall distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance thereof
appoints The First National Bank of Chicago as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of
the Holders of Preferred Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Preferred Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Preferred Securities in accordance
with this Section and (ii) to convert all or a portion of the Debentures
into
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Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a
new Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Preferred Securities
so converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver upon
conversion of Debentures, shares of Common Stock reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of the
Debentures to the converting Holder of Preferred Securities free and clear
of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of Common Stock (and all requirements to list
Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common Stock
to the Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder of Preferred Securities upon conversion
of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock
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by the Trust upon conversion of the Preferred Securities. The Sponsor shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Preferred Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has
been paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Preferred
Securities or set forth in this Exhibit B to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.01 of the Declaration, then the Holders of outstanding
Securities will be entitled to vote on such amendment or proposal as a
single class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class of Securities will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
Majority in liquidation amount of such class of Securities and (B)
amendments to the Declaration shall be subject to such further requirements
as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with
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respect to such amendment, modification or termination. The Property Trustee
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
In addition to obtaining the foregoing approvals of such Holders of the
Preferred Securities and Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that for United States federal income tax purposes the
Trust will not be classified as other than a grantor trust on account of such
action.
If an Event of Default has occurred and is continuing, then the Holders of a
Majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
under the
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Debentures, a Holder of Preferred Securities, to the extent permitted by
applicable law, may, after a period of 30 days has elapsed since such Holder's
written request to the Property Trustee to enforce such rights, institute a
legal proceeding directly against the Sponsor to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person; provided further, that, if an
Event of Default has occurred and is continuing and such event is attributed to
the failure of the Sponsor to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Company will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the Holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Lyondell or by any Affiliate of
Lyondell shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
B-16
<PAGE>
Except as provided in this paragraph 6, Holders of the Preferred Securities
will have no rights to increase or decrease the number of Trustees or to
appoint, remove or replace a Trustee, which voting rights are vested exclusively
in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee[, including the subordination provisions therein,] and
(ii) the Indenture and the Debentures, including the subordination provisions
of the Indenture.
B-17
<PAGE>
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no
preemptive or similar rights to subscribe to any additional Preferred Securities
or Common Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Preferred Securities without charge on written request to the Trust at its
principal place of business.
B-18
<PAGE>
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE
FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
LYONDELL TRUST II OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities: ____________
___________
Aggregate Liquidation Amount: $____________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
Lyondell Trust II
____% Convertible Preferred Trust Securities, Series B
(liquidation amount $[50][25] per Preferred Security)
B-19
<PAGE>
Lyondell Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
and designated the ____% Convertible Preferred Trust Securities, Series B
(liquidation amount $[50][25] per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of ___________, ____, as the same may be amended
from time to time (the "Declaration") including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Lyondell
Chemical Company, a Delaware corporation ("Lyondell"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement of Lyondell dated as of __________, ____
(the "Guarantee") to the extent provided therein. The Trust will furnish a copy
of the Declaration, the Guarantee and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have (i) agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Supplemental Indenture) as and to the extent provided in the
Indenture, and (ii) agreed to the terms of the Guarantee, including that the
Guarantee [is subordinate and junior in right of payment to] [is pari passu to]
all other liabilities of Lyondell, including the Debentures, except those made
[pari passu or] subordinate by their terms, and senior to all capital stock
[(other than the most senior preferred stock issued, from time to time, if any,
by Lyondell, which preferred stock will rank pari passu with the Guarantee)] now
or hereafter issued by Lyondell and to any guarantee now or hereafter entered
into by Lyondell in respect of any of its capital stock [(other than the most
senior preferred stock issued, from time to time, if any, by Lyondell)].
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
B-20
<PAGE>
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ____ day of __________, ____.
LYONDELL TRUST II
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
B-21
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from _________,
____, and will be payable quarterly in arrears, on ______, ______, ______ and
______ of each year, commencing on ________, ____, but only if and to the extent
that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Lyondell may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, Lyondell may commence a new Extension Period, subject to the above
requirements. Payments of accumulated Distributions will be payable to Holders
of Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
B-22
<PAGE>
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration.]
B-23
<PAGE>
[CONVERSION REQUEST
To: ________________, as Property Trustee of Lyondell Trust II
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of ______, ____ (as amended from time to
time, the "Declaration"), by _________, ________ and __________ as Regular
Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The First
National Bank of Chicago, as the Property Trustee, Lyondell Chemical Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to the Declaration)
in accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
Lyondell Trust II (at the rate of exchange specified in the terms of the
Preferred Securities set forth as Exhibit B to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned into Common
Stock (at the conversion rate specified in the terms of the Preferred Securities
set forth as Exhibit B to the Declaration, subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration)).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
B-24
<PAGE>
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to be
issued, along with the address or addresses of such
person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
__________________
**(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership
B-25
<PAGE>
__________________
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
B-26
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax identification number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-27
<PAGE>
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust II dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Common Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________), and each with a liquidation amount with respect to the
assets of the Trust of $[50][25] per Common Security, are hereby designated as
"____% Convertible Common Trust Securities, Series B". The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex I, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice. The Common
Securities are to be issued and sold to Lyondell in consideration of
$_____________ in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Lyondell having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $[50][25] per Common Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded quarterly. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds
<PAGE>
on hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
___________, ____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of Common
Securities as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be one business day prior to the relevant
Distribution date, and if the Preferred Securities are no longer in book-
entry only form, the relevant record dates for the Common Securities
C-2
<PAGE>
will be the fifteenth (15th) day of the month prior to the relevant
Distribution date, which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions payable on any
Common Securities that are not punctually paid on any Distribution payment
date as a result of Lyondell's having failed to make the corresponding
interest payment on the Debentures will forthwith cease to be payable to the
person in whose name such Common Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Common Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Lyondell has elected to make a full or partial
payment of interest accrued on the Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions
are payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
C-3
<PAGE>
satisfaction of liabilities to the creditors of the Trust, an amount equal
to the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and the Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on, such Preferred Securities and the
Common Securities, shall be distributed Pro Rata to the Holders of the
Preferred Securities and the Common Securities in exchange for such
Securities.
If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Preferred Securities and the Common Securities shall be paid, subject to
the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Common Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
C-4
<PAGE>
interest equal to accumulated and unpaid Distributions on, such Common
Securities until such Certificates are presented to Lyondell or its agent
for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only if
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $[50][25] per Preferred Security and
Common Security plus an amount equal to accumulated and unpaid Distributions
thereon to the date of redemption, payable in cash (the "Redemption Price").
The date of any such repayment or redemption of Preferred Securities and
Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in paragraph 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the Common
Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of
C-5
<PAGE>
Default has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the
Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Common
Securities unless all accumulated and unpaid Distributions have been paid on
all Common Securities for all quarterly Distribution periods terminating on
or prior to the date of redemption.
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<PAGE>
(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed
will be redeemed Pro Rata from each Holder of Common Securities
(subject to adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this
paragraph 4 (which notice will be irrevocable), then immediately prior
to the close of business on the redemption date, provided that Lyondell
has paid to the Property Trustee in immediately available funds a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, Distributions will cease to accumulate on
the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Common Securities so called for redemption will cease, except the
right of the Holders of such Common Securities to receive the
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Common Securities which have
been so called for redemption. If any date fixed for redemption of
Common Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business
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Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Common Securities is improperly
withheld or refused and not paid by the Property Trustee, Distributions
on such Common Securities will continue to accumulate, from the
original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to Holders of the Common Securities.
[5. CONVERSION RIGHTS.
The Holders of Common Securities shall have the right at any time prior to
the close of business on , ____ or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause the Conversion Agent to
convert Common Securities, on behalf of the converting Holders, into shares of
Common Stock in the manner described herein on and subject to the following
terms and conditions:
(a) The Common Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by the
Trust on the basis of one Common Security per $[50][25] principal amount of
Debentures, and immediately convert such amount of Debentures into fully
paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50][25] principal amount of Debentures (which
is equivalent to a
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<PAGE>
conversion price of $__ per share of Common Stock, subject to certain
adjustments set forth in Sections __ and __ of the Supplemental Indenture
(as so adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Common Securities on behalf of such Holder
(the "Conversion Request"), together, if the Common Securities are in
certificated form, with such Common Security Certificates. The Conversion
Request shall (i) set forth the number of Common Securities to be converted
and the name or names, if other than the Holder, in which the shares of
Common Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Common Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock, subject to certain adjustments set forth in the Supplemental
Indenture (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Common Securities for a portion of the Debentures held by the Trust, and the
Trust shall, upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Sponsor
of the Holder's election to convert such Debentures into shares of Common
Stock. If a Common Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date,
then, notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Common Security is registered at the close of business on such record
date, and (other than a Common Security or a portion of a Common Security
called for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered for
conversion, the Common Security must be accompanied by payment of an amount
equal to the Distribution payable on such Distribution payment date. Except
as provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any conversion
on account of any accumulated and unpaid Distributions accumulated on the
Common Securities surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Common Stock issued upon
such conversion, and the delivery of Common Stock upon conversion of the
Common Securities shall be deemed to constitute full payment for all
accumulated and unpaid Distributions on the Common Securities.
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Common Securities shall be deemed to have been converted immediately prior
to the close of business on the day on which a Notice of Conversion relating
to such Common Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons entitled
to receive Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the Conversion
Date, the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if any,
in lieu of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the Notice of
Conversion, and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such
Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof appoints
The First National Bank of Chicago as the "Conversion Agent" for the purpose
of effecting the conversion of Common Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Common Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Common Securities from
time to time for Debentures held by the Trust in connection with the
conversion of such Common Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Common Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Common Securities so
converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time
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<PAGE>
to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Sponsor shall be entitled to
deliver upon conversion of Debentures, shares of Common Stock reacquired and
held in the treasury of the Sponsor (in lieu of the issuance of authorized
and unissued shares of Common Stock), so long as any such treasury shares
are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of Common
Securities free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of the
Sponsor and the Trust shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Common Stock
(and all requirements to list Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the
Debentures and the Trust to lawfully deliver Common Stock to each Holder of
Common Securities upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Common Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that in which the Common Securities so converted were registered, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Common
Securities or set forth in this Exhibit C to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
C-11
<PAGE>
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment,
removal or replacement to be approved by Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on such amendment or
proposal as a single class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class of Securities will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a Majority in liquidation amount
of such class of Securities, (B) the rights of Holders of Common Securities
under Section 5.02 of the Declaration to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the consent
of each Holder of Common Securities, and (C) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take
C-12
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any action in accordance with the directions of the Holders of Securities unless
the Property Trustee shall have received, at the expense of the Sponsor, an
Opinion of Counsel experienced in such matters to the effect that the Trust will
not be classified for United States federal income tax purposes as other than a
grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities
and Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect that for United States federal income tax purposes the Trust will not be
classified as other than a grantor trust on account of such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
C-13
<PAGE>
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for
the Trust to redeem and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common Securities
to any payment, Distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of
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<PAGE>
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of the
Trust by check mailed to the address of the persons entitled thereto and that
the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Common Securities without charge on written request to the Trust at its
principal place of business.
C-15
<PAGE>
Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
________________ ____________________
Certificate Evidencing Common Securities
of
Lyondell Trust II
____% Convertible Common Trust Securities, Series B
(liquidation amount $[50][25] per Common Security)
Lyondell Trust II, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing common undivided beneficial
interests in the assets of the Trust and designated the "____% Convertible
Common Trust Securities, Series B" (liquidation amount $[50][25] per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below) including, without limitation, Section 9.01(c) thereof. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this Certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of __________, ____, as the same may be amended from
time to time (the "Declaration") including the designation of the terms of
Common Securities as set forth in Exhibit C thereto. The Common Securities and
the Preferred Securities issued by the Trust
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pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Debentures (as defined in the Declaration)
issued by Lyondell Chemical Company, a Delaware corporation ("Lyondell"), to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust will
furnish a copy of the Declaration and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Supplemental Indenture) as and to the extent provided in the
Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ___ day of _____________, ____.
LYONDELL TRUST II
By ________________________, as Regular Trustee
Name:
Title: Regular Trustee
By _________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
C-17
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate additional distributions thereon at the
Coupon Rate per annum (to the extent permitted by applicable law) compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from _________, ____
and will be payable quarterly in arrears, on _____________, ____________,
_____________ and _____________ of each year, commencing on ________, ____, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Lyondell shall not be in
default in the payment of interest on the Debentures, Lyondell has the right
under the Indenture for the Debentures to defer payments of interest on the
Debentures by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions thereon
(to the extent permitted by applicable law but not at a rate greater than the
rate at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures.
Prior to the termination of any such Extension Period, Lyondell may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period and
the payment of all amounts then due, Lyondell may commence a new Extension
Period, subject to the above requirements. Payments of accumulated
Distributions will be payable to Holders of Common Securities as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period.
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The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock (as
defined in the Declaration), through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock, in the manner and according to the terms set forth in the
Declaration.]
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<PAGE>
[CONVERSION REQUEST
To: ______________________,
as Property Trustee of Lyondell Trust II
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of ______________, ____ (as amended from
time to time, the "Declaration"), by _________, _____________ and ____________,
as Regular Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The
First National Bank of Chicago, as the Property Trustee, Lyondell Chemical
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by Lyondell Trust II (at the rate of exchange specified in the terms of the
Common Securities set forth as Exhibit C to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration), subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
_______________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the
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shares of Common Stock are to be issued, along with the
address or addresses of such person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:* ____________
______________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
C-21
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-22
<PAGE>
EXHIBIT 4.5.3
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
LYONDELL TRUST III
_______________________________________
DATED AS OF ___________, 1999
_______________________________________
================================================================================
<PAGE>
TABLE OF CONTENTS*
PAGE
----
ARTICLE 1
Definitions
Section 1.01. Definitions......................................... 2
Affiliate........................................... 2
Book Entry Interest................................. 2
Business Day........................................ 3
Business Trust Act.................................. 3
Certificate......................................... 3
Certificate of Trust................................ 3
Clearing Agency..................................... 3
Clearing Agency Participant......................... 3
Closing Date........................................ 3
Code................................................ 3
Commission.......................................... 3
Common Securities................................... 3
Common Security Certificate......................... 3
Common Stock........................................ 4
Conversion Agent.................................... 4
Covered Person...................................... 4
Creditor............................................ 4
Debenture Trustee................................... 4
Debentures.......................................... 4
Definitive Preferred Security Certificates.......... 4
Delaware Trustee.................................... 4
Depositary Agreement................................ 4
Distribution........................................ 4
DTC................................................. 4
Event of Default.................................... 4
Exchange............................................ 4
Exchange Act........................................ 4
Fiscal Year......................................... 5
Global Certificate.................................. 5
Holder.............................................. 5
Holder Direct Action................................ 5
- -----------------------
*This Table of Contents does not constitute part of the Amended and Restated
Declaration of Trust and should not have any bearing upon the interpretation of
any of its terms or provisions.
i
<PAGE>
PAGE
----
Indemnified Person.................................. 5
Indenture........................................... 5
Indenture Event of Default.......................... 5
Investment Company.................................. 5
Investment Company Act.............................. 5
Legal Action........................................ 5
Liquidation Distribution............................ 5
List of Holders..................................... 5
Lyondell............................................ 5
Sponsor............................................. 5
Majority in liquidation amount of the Securities.... 5
NASD................................................ 6
Nasdaq.............................................. 6
1933 Act Registration Statement..................... 6
1934 Act Registration Statement..................... 6
Officers' Certificate............................... 6
Opinion of Counsel.................................. 7
Option Closing Date................................. 7
Original Declaration................................ 7
Paying Agent........................................ 7
Payment Amount...................................... 7
Person.............................................. 7
Preferred Guarantee................................. 7
Preferred Securities................................ 7
Preferred Security Beneficial Owner................. 7
Preferred Security Certificate...................... 7
Property Trustee.................................... 7
Property Account.................................... 8
Quorum.............................................. 8
Regular Trustee..................................... 8
Related Party....................................... 8
Resignation Request................................. 8
Responsible Officer................................. 8
Rule 3a-7........................................... 8
Securities.......................................... 8
Securities Act...................................... 8
Special Event....................................... 8
Sponsor............................................. 8
Lyondell............................................ 8
Successor Delaware Trustee.......................... 8
Successor Entity.................................... 8
Successor Property Trustee.......................... 9
ii
<PAGE>
PAGE
----
Successor Securities................................... 9
Super Majority......................................... 9
Supplemental Indenture................................. 9
10% in liquidation amount of the Securities............ 9
Treasury Regulations................................... 9
Trust.................................................. 9
Trustee................................................ 9
Trustees............................................... 9
Trust Indenture Act.................................... 10
Underwriting Agreement................................. 10
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application....................... 10
Section 2.02. Lists of Holders of Preferred Securities............... 10
Section 2.03. Reports by the Property Trustee........................ 11
Section 2.04. Periodic Reports to the Property Trustee............... 11
Section 2.05. Evidence of Compliance with Conditions Precedent....... 11
Section 2.06. Events of Default; Waiver.............................. 11
Section 2.07. Disclosure of Information.............................. 13
ARTICLE 3
Organization
Section 3.01. Name................................................... 14
Section 3.02. Office................................................. 14
Section 3.03. Issuance of the Securities............................. 14
Section 3.04. Purchase of Debentures................................. 15
Section 3.05. Purpose................................................ 15
Section 3.06. Authority.............................................. 16
Section 3.07. Title to Property of the Trust......................... 16
Section 3.08. Powers and Duties of the Regular Trustees.............. 16
Section 3.09. Prohibition of Actions by the Trust and the Trustees... 19
Section 3.10. Powers and Duties of the Property Trustee.............. 20
Section 3.11. Delaware Trustee....................................... 24
Section 3.12. Certain Rights and Duties of the Property Trustee...... 24
Section 3.13. Registration Statement and Related Matters............. 26
Section 3.14. Filing of Amendments to Certificate of Trust........... 28
Section 3.15. Execution of Documents by the Regular Trustees......... 28
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities............................................. 28
iii
<PAGE>
PAGE
----
Section 3.17. Duration of the Trust................................... 28
Section 3.18. Mergers................................................. 28
Section 3.19. Property Trustee May File Proofs of Claim............... 30
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor............ 31
Section 4.02. Expenses................................................ 32
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications...................... 33
Section 5.02. Appointment, Removal and Resignation of the Trustees.... 35
Section 5.03. Vacancies among the Trustees............................ 37
Section 5.04. Effect of Vacancies..................................... 37
Section 5.05. Meetings................................................ 37
Section 5.06. Delegation of Power..................................... 38
Section 5.07. Merger, Conversion, Consolidation or Succession to
Business................................................ 38
ARTICLE 6
Distributions
Section 6.01. Distributions........................................... 38
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities............. 39
Section 7.02. Conversion Agent........................................ 40
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust................................ 41
iv
<PAGE>
PAGE
----
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities............................... 42
Section 9.02. Transfer of Certificates............................. 42
Section 9.03. Deemed Security Holders.............................. 42
Section 9.04. Book Entry Interests................................. 43
Section 9.05. Notices to Holders of Certificates................... 44
Section 9.06. Appointment of Successor Clearing Agency............. 44
Section 9.07. Definitive Preferred Securities Certificates......... 44
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.... 45
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation......................................... 45
Section 10.02. Indemnification..................................... 46
Section 10.03. Outside Business.................................... 46
ARTICLE 11
Accounting
Section 11.01. Fiscal Year......................................... 47
Section 11.02. Certain Accounting Matters.......................... 47
Section 11.03. Banking............................................. 48
Section 11.04. Withholding......................................... 48
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.......................................... 48
Section 12.02. Meetings of the Holders of Securities; Action by
Written Consent..................................... 50
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property
Trustee............................................. 51
Section 13.02. Representations and Warranties of the Delaware
Trustee............................................. 52
v
<PAGE>
PAGE
----
ARTICLE 14
Miscellaneous
Section 14.01. Notices........................................ 53
Section 14.02. Undertaking for Costs.......................... 54
Section 14.03. Governing Law.................................. 55
Section 14.04. Headings....................................... 55
Section 14.05. Partial Enforceability......................... 55
Section 14.06. Counterparts................................... 55
Section 14.07. Intention of the Parties....................... 55
Section 14.08. Successors and Assigns......................... 56
Section 14.09. No Recourse.................................... 56
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
vi
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LYONDELL TRUST III
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of __________, ____ by Kerry A. Galvin, ___________ and
___________, as Regular Trustees (the "Regular Trustees"), The First National
Bank of Chicago, as Property Trustee (the "Property Trustee") and First Chicago
Delaware Inc., as Delaware Trustee (the "Delaware Trustee") (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Lyondell
Chemical Company, a Delaware corporation, as trust sponsor ("Lyondell" or the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration
of Trust dated as of November 9, 1998 (the "Original Declaration") in order to
establish Lyondell Trust III, a statutory business trust (the "Trust"), under
the Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware on
November 9, 1998; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Sections 3.03 and 3.04 hereof, (i) issuing and selling Preferred Securities (as
hereinafter defined) representing preferred undivided beneficial interests in
the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Lyondell issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Lyondell in exchange for cash
and investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
<PAGE>
Trustees declare that all Debentures referred to in clauses (i) and (ii) of the
previous paragraph purchased by the Trust will be held in trust for the benefit
of the Holders (as hereinafter defined) from time to time, of the Certificates
(as hereinafter defined) representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE 1
Definitions
Section 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C hereto
(the "Exhibits")) as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
2
<PAGE>
transfers of which shall be maintained and made through book entries by such
Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and State of
New York, Chicago, Illinois or Houston, Texas are authorized or required by law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S) 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section (Sec.) of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
3
<PAGE>
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
["Common Stock" means the common stock, par value $1.00 per share, of
Lyondell or any other class of stock, other securities, cash or other assets
into which the Debentures are then convertible.]
["Conversion Agent" has the meaning specified in Section 7.02.]
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Lyondell or of any of its Affiliates and (iii) the Holders from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of Subordinated Debentures issued by
Lyondell under the Indenture to the Property Trustee and entitled the "____%
Subordinated Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the Debentures.
4
<PAGE>
"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Conversion Agent, any Paying Agent, any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trustee,
Conversion Agent or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates.
"Indenture" means the Subordinated Indenture dated as of _______ __, ____
between Lyondell and the Debenture Trustee as supplemented by the _______
Supplemental Indenture thereto dated as of ____________, ____, pursuant to which
the Debentures are to be issued.
"Indenture Event of Default" means that an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
5
<PAGE>
"Lyondell" or "Sponsor" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in
Section 3.13.
"1934 Act Registration Statement" has the meaning specified in
Section 3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, and by
the Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller,
the Secretary or an Assistant Secretary of the Sponsor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 2.05 shall be the principal executive, financial or
accounting officer of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
6
<PAGE>
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Sponsor, which may be an employee of
the Sponsor but not an employee of the Trust or the Property Trustee, and who
shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel
pertaining to federal income tax matters may rely on published rulings of the
Internal Revenue Service.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of __________,
____ of Lyondell in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
7
<PAGE>
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Lyondell or any other Person which owns, directly or indirectly, 100% of the
outstanding voting securities of Lyondell.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Property Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities as
set forth in paragraph 4 of Exhibits B and C hereto.
"Sponsor" or " Lyondell" means Lyondell Chemical Company, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
8
<PAGE>
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.02(b).
"Successor Securities" has the meaning specified in Section 3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental Indenture dated as of
________, ____ between Lyondell and the Debenture Trustee, pursuant to which the
Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or " Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
9
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ____ among the Trust, the Sponsor and _______ and _________, as
representatives of the several underwriters named therein.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or
the rules and regulations of the Commission, shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee unless the Property Trustee is registrar for
the Securities, (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time that the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as
10
<PAGE>
is reasonably practicable, all information contained in Lists of Holders given
to it or which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under (S)(S)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Securities such reports as are required by (S) 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as required
by (S) 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by (S) 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by (S) 314(a)(4) and (c) of the Trust Indenture Act (provided that any
certificate to be provided pursuant to (S) 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each Fiscal Year).
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent provided for in this Declaration which relate to any of the matters
set forth in (S) 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to (S) 314(c) may be given in the
form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided above in Section 2.06(a) or below in this
Section 2.06(b), the Event of Default under this Declaration shall also not
be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided above in Section
2.06(a) or below in this Section 2.06(b), the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least the
proportion in aggregate liquidation amount of the Common
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Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to
have waived any such Event of Default and all Events of Defaults with respect to
the Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
Holders of Preferred Securities as provided in the Declaration, the Holders of
Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon waiver, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
Section 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the Holders
of the Securities in accordance with (S) 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to (S) 312 of the Trust Indenture Act, nor shall the
Property
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Trustee be held accountable by reason of mailing any material pursuant to a
request made under (S) 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.01. Name.
The Trust continued by this Declaration is named "Lyondell Trust III" as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
Section 3.02. Office.
The address of the principal office of the Trust is c/o Lyondell Chemical
Company, 1221 McKinney Street, Suite 1600, Houston, Texas 77010. Upon ten days'
written notice to the Holders, the Regular Trustees may change the location of
the Trust's principal office.
Section 3.03. Issuance of the Securities.
On __________, ____ the Sponsor, on behalf of the Trust and pursuant to the
Original Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver to (i) the underwriters named in the Underwriting Agreement, a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.04, in an aggregate amount of ___________
Preferred Securities having an aggregate liquidation amount of $__________,
against receipt of the aggregate purchase price of such Preferred Securities of
$___________, and (ii) the Sponsor, Common Securities Certificates, registered
in the name of the Sponsor, in an aggregate amount of ________ Common Securities
having an aggregate liquidation amount of $____________, against receipt of the
aggregate purchase price of such Common Securities of $___________. In the
event and to the extent the overallotment option granted by the Trust pursuant
to the Underwriting Agreement is exercised by such underwriters, on the Option
Closing Date the Regular Trustees, on behalf of the Trust, shall execute and
deliver to such underwriters a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of up to ___________ Preferred
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Securities having an aggregate liquidation amount of up to $___________, against
receipt of the aggregate purchase price of such Preferred Securities of up to
$____________.
Section 3.04. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and delivery
of this Declaration, the Regular Trustees, on behalf of the Trust, shall
purchase from the Sponsor with the proceeds received by the Trust from the sale
of the Securities on such date pursuant to Section 3.03, at a purchase price of
100% of the principal amount thereof, Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount equal to $___________,
and, in satisfaction of the purchase price for such Debentures, the Regular
Trustee, on behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of $___________. In the event the overallotment option granted
by the Trust with respect to the Preferred Securities pursuant to the
Underwriting Agreement is exercised by the underwriters named therein, on the
Option Closing Date the Regular Trustees, on behalf of the Trust, shall purchase
from the Sponsor with the proceeds received by the Trust from the sale of the
Preferred Securities on such date pursuant to Section 3.03, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Property Trustee and having an aggregate principal amount of up
to $__________, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased.
Section 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue and
sell Preferred Securities for cash and use the proceeds of such sales to acquire
from Lyondell Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii) to
issue and sell Common Securities to Lyondell for cash and use the proceeds of
such sale to purchase as trust assets an equal aggregate principal amount of
Debentures issued under the Indenture; and (b) except as otherwise limited
herein, to engage in only those other activities
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necessary, convenient or incidental thereto, including such other activities
specifically authorized in this Declaration. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge any
of its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
Section 3.06. Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and the
Property Account or unless otherwise provided in this Declaration, legal title
to all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have
undivided beneficial interests in the assets of the Trust.
Section 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty to
cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities and the issuance of Securities shall be
limited to (x) a one-time, simultaneous issuance of both Preferred Securities
and Common Securities on the Closing Date and (y) any subsequent issuance of
Preferred Securities on the Option Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting Agreement;
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(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 3.13 and to
execute, deliver and perform on behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to all of the Debentures to be vested
in, and the Debentures to be held of record in the name of, the Property Trustee
for the benefit of the Holders of the Preferred Securities and the Common
Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting Agreement and
such other agreements and arrangements as may be necessary or desirable in
connection with the sale of the Preferred Securities to the initial purchasers
thereof and the consummation thereof, and to take all action, and exercise all
discretion, as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining to
take any Ministerial Action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of (S) 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions, and exchanges, and to issue relevant notices to
Holders of the Preferred Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.10(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by (S)
314(a)(4)
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of the Trust Indenture Act, which certificate may be executed by any Regular
Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities, the Regular Trustees hereby initially appointing the
Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B
and C hereto;
(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes of the Trust and the
activities of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures will be
treated as indebtedness of the Sponsor for United States federal income tax
purposes;
(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust,
and to comply with any requirements imposed by any taxing authority on holders
of instruments treated as indebtedness for United States federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule 3a-7) and
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(S) 317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05, and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers or any of the authority of the Property Trustee set forth in Section
3.10.
The Regular Trustees shall take all actions on behalf of the Trust that are
not specifically required by this Declaration to be taken by any other Trustee.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.08
shall be reimbursed by the Sponsor.
Section 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in connection
with the purposes of the Trust or other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as otherwise
expressly provided herein;
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(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee or exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures, without, in each case, obtaining
the prior approval of the Holders of a Majority in liquidation amount of all
outstanding Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such Holders;
(j) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, unless in the case of
this clause (j) the Property Trustee shall have received an Opinion of Counsel
experienced in such matters to the effect that such amendment, modification or
termination will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a grantor
trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities exchange or
automated quotation system) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust, which express provision shall be in substantially
the following form, "The Holders of the Preferred Securities, in their
capacities as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and the parties hereto
hereby agree that the Holders of the Preferred Securities, in their capacities
as such, shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware."
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Section 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Article 5. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with
Section 6.01. Funds in the Property Account shall be held uninvested, and
without liability for interest thereon, until disbursed in accordance with
this Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the occurrence of
a Special Event or upon the election of the Holder of Common Securities to
distribute the Debentures to Holders of Securities and dissolve the Trust;
and
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(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject to
Section 3.10(e), shall for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures under the Indenture, subject
to the rights of the Holders of the Preferred Securities pursuant to the
terms of this Declaration, the Business Trust Act and the Trust Indenture
Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures. If the Property Trustee fails to
enforce its rights under the Debentures, a Holder of Preferred Securities, to
the extent permitted by applicable law, may, after a period of 30 days has
elapsed since such Holder's written request to the Property Trustee to enforce
such rights, institute a legal proceeding directly against the Sponsor to
enforce the Property Trustee's rights under the Debentures without first
instituting any legal proceeding against the Property Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Holder Direct Action") on or
after the respective due date specified in the Debentures. In connection with
such Holder Direct Action, the Company will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holders of Preferred Securities in such Holder Direct Action. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the Holders of
the Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities will
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not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to the Property Trustee,
transmit by mail, first class postage prepaid, to the holders of the Securities,
as their names and addresses appear upon the register, notice of such defaults
with respect to the Securities known to the Property Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 3.10(g) being hereby defined to be
an Indenture Event of Default, not including any periods of grace provided for
in the Indenture and irrespective of the giving of any notice provided therein);
provided, that, except in the case of default in the payment of the principal of
(or premium, if any) or interest on any of the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers, of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
The Property Trustee shall not be deemed to have knowledge of any default,
except (i) a default in the payment of principal, premium or interest on the
Debentures or (ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged with the administration
of this Declaration shall have obtained written notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds thereof
distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry only
form, the Preferred Securities and, subject to Section 3.08(q), may authorize
one or more Persons (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to the
Preferred Securities. Any such Paying Agent shall comply with (S) 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee,
after consultation with the Regular Trustees, at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee, subject to Section 3.08(q).
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(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from Lyondell of its election to
defer payments of interest on the Debentures by extending the interest payment
period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is consistent with
the purposes and functions of the Trust set out in Section 3.05, and the
Property Trustee shall not take any action which is inconsistent with the
purposes and functions of the Trust set forth in Section 3.05.
Section 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration. Except as set
forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of (S) 3807(a) of the
Business Trust Act. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
Section 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration, and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; provided, however,
that in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee hereunder or
under the Indenture, or exercising any trust or power conferred upon the
Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against such
risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
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established prior to taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, request and rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of its
employees) selected by it in good faith and with due care and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have offered to the
Property Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
Property Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured or waived) to exercise such of the
rights and powers vested in it by this Declaration, and to use the same
degree of care and skill in this exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; and
(v) any action taken by the Property Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to inquire
as to the authority of the Property Trustee to so act, or as to its
compliance with any of the terms and provisions of this Declaration, both
of which
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shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action.
(d) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
Section 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Lyondell, as the sponsor of
the Trust, was authorized (i) to file with the Commission and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (File
No. 333-60429) (the "1933 Act Registration Statement") including any pre-
effective or post-effective amendments thereto, relating to the registration
under the Securities Act of the Preferred Securities and (b) if Lyondell shall
deem it desirable, a Registration Statement on Form 8-A or other appropriate
form (the "1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act; (ii) if Lyondell shall deem it
desirable, to prepare and file with the New York Stock Exchange or one or more
national securities exchange(s) (each, an "Exchange") or the National
Association of Securities Dealers, Inc. (the "NASD") and execute on behalf of
the Trust a listing application or applications and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("Nasdaq"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and all other papers
and documents as Lyondell, on behalf of the Trust, may deem necessary or
desirable to register the Preferred Securities under the securities or "Blue
Sky" laws of such jurisdictions as Lyondell on behalf of the Trust, may deem
necessary or desirable; and (iv) to negotiate the terms and execute on behalf of
the Trust the Underwriting Agreement. In the event that any filing referred to
in clauses (i)-(iii) above is required by the rules and regulations of the
Commission, any Exchange, Nasdaq, the NASD or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, and Lyondell are hereby authorized
and directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee and
the Delaware Trustee, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, any
Exchange, Nasdaq, the NASD or state securities or blue sky laws. In connection
with all of the foregoing, Lyondell and each Trustee, solely in its capacity as
Trustee of the Trust, have constituted and appointed, and hereby confirm the
appointment of, Dan F. Smith, Jeffrey R. Pendergraft and Edward W. Rich and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for
Lyondell or such Trustee or in Lyondell's or such Trustee's name, place and
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stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as Lyondell or such Trustee might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State
of Delaware on November 9, 1998 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments, if any, to
the Certificate of Trust as the Trustees shall deem necessary or desirable.
Section 3.15. Execution of Documents by the Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, any Regular Trustee, or if there is only one, such Regular Trustee is
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall have existence until ___________, ____.
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Section 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, except as described
in Section 3.18(b) and (c) of this Declaration.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees and without the consent of the Holders, the Delaware Trustee or
the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities and this Declaration; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Securities rank
with respect to Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses the same powers and duties as the Property Trustee as the holder
of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities will
be listed upon notification of issuance, on any national securities
exchange or with another organization in which the Preferred Securities are
then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior to
such transaction, such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
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(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received an
Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as an
Investment Company; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Trust (or
the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Guarantee; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, convert into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an
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entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, conversion, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes or would cause the Holders
of the Securities not to be treated as owning an undivided interest in the
Debentures.
Section 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or compensation affecting the
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Securities or the rights of any Holder thereof to authorize the Property Trustee
to vote in respect of the claim of any Holder in any such proceeding.
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common Securities
issued by the Trust at the same time as the Preferred Securities to be issued on
such date are issued, such purchase to be in an amount equal to 3% of the total
capital of the Trust (including for this purpose the maximum amount of Preferred
Securities, if any, which may be issued on the Option Closing Date pursuant to
the exercise of the overallotment option set forth in the Underwriting
Agreement).
Section 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible
for and shall pay for all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the issuance
of the Preferred Securities to initial purchasers thereof, the fees and expenses
(including reasonable counsel fees and expenses) of the Trustees (including any
amounts payable under Article 10), the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
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Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this
Section 4.02.
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace, the
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of Lyondell;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and otherwise is permitted to
act as a Trustee hereunder under the laws of the State of Delaware, except
that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Property
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Trustee shall also be the Delaware Trustee and Section 3.11 shall have
no application; and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
[to come]
c/o LYONDELL CHEMICAL COMPANY
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(c) There shall at all times be one Trustee which shall act as the Property
Trustee. In order to act as the Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation,
national banking association or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If such
corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.01(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
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If at any time the Property Trustee shall cease to satisfy the requirements
of clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of (S) 310(b)
of the Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in (S) 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions of
(S) 310(b) of the Trust Indenture Act. The Preferred Guarantee and the Indenture
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in (S) 310(b) of the Trust
Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The First
National Bank of Chicago, whose address is as set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is First
Chicago Delaware Inc., whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
Section 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.
(b) (i) The Trustee that acts as the Property Trustee shall not be removed
in accordance with Section 5.02(a) until a Successor Property Trustee possessing
the qualifications to act as the Property Trustee under Section 5.01(c) (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
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and delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing the
qualifications to act as the Delaware Trustee under Section 5.01(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications to
act as the Property Trustee under Section 5.01(c) has been appointed
and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7, until the assets of the Trust
have been completely liquidated and the proceeds thereof distributed to
the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.02
within 60 days after delivery to the Sponsor and the Trust of a Resignation
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Request, the resigning Property Trustee or Delaware Trustee may petition any
court of competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee, as the case may be. Such court may thereupon
after prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the case
may be.
Section 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees
is not reduced pursuant to Section 5.01 or if the number of Trustees is
increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action
of the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
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vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any registration statement or amendment thereto or
other document or schedule filed with the Commission or making any other
governmental filing (including, without limitation, the filings referred to in
Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.07. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, shall be a party,
or any Person succeeding to all or substantially all of the corporate trust
business of the Property Trustee or the Delaware Trustee or the Regular Trustee,
as the case may be, shall be the successor of the Property Trustee or the
Delaware Trustee or the Regular Trustees, as the case may be, hereunder,
provided that such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 6
Distributions
Section 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant
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Holder's Securities as set forth in Exhibits B and C hereto ("Distributions").
If and to the extent that Lyondell makes a payment of interest (including
Compounded Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to promptly make a Distribution of
the Payment Amount to Holders in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto.
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue on behalf of the Trust Securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with Section 7.01(b) and for the consideration
specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee who shall have signed
any of the Certificates shall cease to be such Regular Trustee before the
Certificate so signed shall be delivered by the Trust, such Certificate
nevertheless may be delivered as though the person who signed such Certificate
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons as, at the actual date of the execution of
such Certificate, shall be the
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Regular Trustees, although at the date of the execution and delivery of this
Declaration any such person was not a Regular Trustee. Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or automated quotation system on which Securities may be
listed or traded, or with any rule or regulation of the Clearing Agency, or to
conform to usage. Pending the preparation of definitive Certificates, the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each temporary
Certificate shall be executed by the Regular Trustees (or, if there are more
than two Regular Trustees, by any two of the Regular Trustees) on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Lyondell the $10
constituting initial trust assets as set forth in the Original Declaration.
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[Section 7.02. Conversion Agent.
The Trust shall maintain an office or agency where Preferred Securities may be
presented for conversion ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may act as Conversion Agent. The Conversion
Agent shall be entitled to the rights and protections extended to the Property
Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the Conversion Agent for
the Preferred Securities.]
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders
of the Securities in accordance with the terms of the Securities; or
(ii) when all of the Debentures shall have been distributed to the Holders
of the Securities in exchange for all of the Securities in accordance with the
terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17[; or
(iv) upon the distribution of Common Stock to all Securities Holders upon
conversion of all outstanding Securities.]
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The
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Trustees shall so file such a certificate as soon as practicable after the
occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws). To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in the
immediately preceding sentence shall be void.
Section 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder
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upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
Section 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance (including Preferred
Securities, if any, issued on the Option Closing Date pursuant to the exercise
of the overallotment option set forth in the Underwriting Agreement), will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.07. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein in
Section 9.07 or in Rule 3a-7 (if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, shall have no obligation to the Preferred Security
Beneficial Owners;
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(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants, provided, that
solely for the purposes of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in
this Declaration, so long as definitive Preferred Security Certificates
have not been issued (pursuant to Section 9.07 hereof), the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in
whole or in part.
Section 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to be
given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to be
given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall, except
in Rule 3a-7 (if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7) with respect to the Property Trustee,
have no notice obligations to the Preferred Security Beneficial Owners.
Section 9.06. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
the Preferred Securities.
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Section 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such instructions.
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees) on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.08, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of Delaware.
Section 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by
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reason of gross negligence (or, in the case of the Property Trustee, negligence)
or willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the termination of this
Declaration or the resignation or removal of any Trustee.
Section 10.03. Outside Business.
The Sponsor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
Accounting
Section 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees shall
keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
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(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be prepared
and mailed to each Holder of Securities unaudited financial statements of the
Trust for such Fiscal Year, prepared in accordance with generally accepted
accounting principles; provided that if the Trust is required to comply with the
periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
such financial statements for such Fiscal Year shall be examined and reported on
by a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to each
Holder of Securities any annual United States federal income tax information
statement required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
Section 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Account and no other funds from the Trust shall be deposited in the
Property Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Property Trustee shall
designate the sole signatories for the Property Account.
Section 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding requirements
under United States federal, state and local law. The Trust shall request, and
the Holders shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit
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amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed overwithholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount to be
withheld was not withheld from a Distribution, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment or modification to this Declaration shall be
made, and any such purported amendment shall be void and ineffective: (A) unless
the Regular Trustees shall have first received: (x) an Officers' Certificate
that such amendment is permitted by, and conforms to, the terms of this
Declaration; and (y) an Opinion of Counsel that such amendment is permitted by,
and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a grantor trust; (y)
reduce or otherwise adversely affect the powers of the Property Trustee in
contravention of the Trust Indenture Act; or (z) cause the Trust to be deemed to
be an Investment Company required to be registered under the Investment Company
Act; (ii) at such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(iii) Section 4.02, Section 9.01(c) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities; (iv) no amendment
which adversely affects the rights, powers and privileges of the Property
Trustee or the Delaware Trustee shall be made without the consent of the
Property Trustee or the Delaware Trustee, respectively; (v) Article 4 shall not
be amended without the consent of the Sponsor; and (vi) the rights of the
Holders of Common Securities under Article 5 to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
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(b) Notwithstanding Section 12.02(a), this Declaration may be amended without
the consent of the Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration, (iii) add to the
covenants, restrictions or obligations of the Sponsor, (iv) conform to any
changes in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) or any change in
interpretation or application of Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or questions
arising under this Declaration which shall not be inconsistent with the other
provisions of this Declaration, (vi) modify, eliminate or add to any provisions
of this Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure that
the Trust will not be required to register as an Investment Company under the
Investment Company Act, and (vii) pursuant to Section 5.02, evidence the
acceptance of the appointment of a successor Trustee or fill a vacancy created
by an increase in the number of Regular Trustees, which amendment does not
adversely affect in any material respect the rights, preferences or privileges
of the Holders.
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which the Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange or
automated quotation system on which the Preferred Securities are then listed,
traded or quoted. The Regular Trustees shall call a meeting of the Holders of
Preferred Securities or Common Securities, if directed to do so by Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
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(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of the Holders of Securities:
(i) Notice of any such meeting shall be given by mail to all the Holders of
Securities having a right to vote thereat not less than seven (7) days nor
more than sixty (60) days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange or automated
quotation system on which the Preferred Securities are then listed, traded or
quoted, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by Holders of Securities owning
not less than the minimum aggregate liquidation amount of Securities that
would be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the Holders
of Securities for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted by
the Regular Trustees or by such other Person that the Regular Trustees may
designate.
(iv) Unless otherwise provided in the Business Trust Act, this Declaration
or the rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted,
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the Regular Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including notice of
the time, place or purpose of any meeting at which any matter is to be voted
on by any Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the exercise
of any such right to vote.
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(iii) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or notice
to, any banking authority which supervises or regulates the Property
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Trustee is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in Section
5.01(c).
Section 13.02. Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee represents and warrants
to the Trust and the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as the
Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware Trustee of
this Declaration have been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Declaration has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(iii) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Delaware
Trustee, if any, is required for the execution, delivery or performance by the
Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and is a Person that
satisfies for the Trust (S) 3807(a) of the Business Trust Act.
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ARTICLE 14
MISCELLANEOUS
Section 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by
first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular Trustees
on behalf of the Trust may give notice of to the Holders of the Securities):
Lyondell Trust III
c/o Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(b) if given to the Property Trustee, at the mailing address of the Property
Trustee set forth below (or such other address as the Property Trustee may give
notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Attention:
Telecopy:
(d) if given to the Holder of the Common Securities, at the mailing address of
the Sponsor set forth below (or such other address as the Holder of the Common
Securities may give notice of to the Trust):
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Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713)
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices shall be deemed to have been given, when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities by
his or her acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Declaration, or in any suit against the Property Trustee for
any action taken or omitted by it as Property Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 14.02 shall not apply to any suit instituted
by the Property Trustee, to any suit instituted by any Holder of Preferred
Securities, or group of Holders of Preferred Securities, holding more than 10%
in aggregate liquidation amount of the outstanding Preferred Securities, or to
any suit instituted by any Holder of Preferred Securities for the enforcement of
the payment of the principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed in such Debentures.
Section 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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Section 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature pages
and this Declaration may be executed by the affixing of the signature of the
Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be classified for
United States federal income tax purposes as an association taxable as a
corporation or partnership but that the Trust be treated as a grantor trust for
United States federal income tax purposes. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
Section 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 14.09. No Recourse.
The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions, or for any claim upon
the Securities or otherwise in respect thereof, shall be had against any Holder
of Securities or any Affiliate of a Holder of Securities, solely by reason of
such
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Person's being a Holder of Securities or an Affiliate of a Holder of Securities,
it being understood that the Holder of Securities, solely by reason of being a
Holder of Securities, has limited liability (in accordance with the provisions
of the Business Trust Act) for the liabilities and obligations of the Trust.
Nothing contained in this Section 14.09 shall be construed to limit the exercise
or enforcement, in accordance with the terms of this Declaration, the Preferred
Guarantee and the Indenture, of the rights and remedies against the Trust or the
Sponsor.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
LYONDELL CHEMICAL COMPANY,
as Sponsor
By:______________________________
Name:
Title:
_______________________________
Kerry A. Galvin,
as Regular Trustee
________________________________
[Name],
as Regular Trustee
________________________________
[Name],
as Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:_____________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:_____________________________
Name:
Title:
58
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EXHIBIT A
CERTIFICATE OF TRUST
OF
LYONDELL TRUST III
THIS CERTIFICATE OF TRUST of Lyondell Trust III (the "Trust"), dated as of
November 9, 1998, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code (S) 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust III.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust at
the time of filing this Certificate of Trust, have executed this Certificate of
Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
_________________________________
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
________________________________
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
________________________________
<PAGE>
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust III dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Preferred Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________) (including up to
_______________________________________________ Dollars ($___________) issuable
upon exercise of the overallotment option set forth in the Underwriting
Agreement), and each with a liquidation amount with respect to the assets of the
Trust of $[50][25] per Preferred Security, are hereby designated as "____%
Convertible Preferred Trust Securities, Series C". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange or automated quotation system on
which the Preferred Securities are then listed, traded or quoted. In connection
with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of Lyondell
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities and the Common Securities so issued and bearing
interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security will
be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $[50][25] per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded quarterly. The term "Distributions" as
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used herein means such periodic cash distributions and any such additional
distributions payable unless otherwise stated. A Distribution will be made by
the Property Trustee only to the extent that interest payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
___________, _____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year, commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the
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Preferred Securities remain in book-entry only form, the relevant record
dates shall be one business day prior to the relevant Distribution date, and
if the Preferred Securities are no longer in book-entry only form, the
relevant record dates will be the fifteenth (15th) day of the month prior to
the relevant Distribution date, which record and payment dates correspond to
the record and interest payment dates on the Debentures. Distributions
payable on any Preferred Securities that are not punctually paid on any
Distribution payment date as a result of Lyondell's having failed to make
the corresponding interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred Security is registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record
date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless Lyondell has elected to make
a full or partial payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws and regulations
and the provisions of the Declaration, each payment in respect of the
Preferred Securities will be made as described in paragraph 9 hereof. If any
date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Preferred Securities
and the Common Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
[(e) In the event of an election by the Holder to convert its Preferred
Securities through the Conversion Agent into Common Stock pursuant to the
terms of the Preferred Securities as set forth in this Exhibit B to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Preferred Securities, or be
required to be made; provided, however, that if a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a Distribution and before the
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opening of business on the corresponding Distribution date, then,
notwithstanding such conversion, the Distribution payable on such
Distribution date will be paid in cash to the person in whose name the
Preferred Security is registered at the close of business on such record
date, and (other than a Preferred Security or a portion of a Preferred
Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution date.]
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to the creditors of the Trust, an amount equal to
the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions thereon
to the date of payment (such amount being the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination, and
after satisfaction of liabilities to the creditors of the Trust, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and the Common Securities and bearing accrued and
unpaid interest in an amount equal to the accumulated and unpaid Distributions
on, such Preferred Securities and the Common Securities, shall be distributed
Pro Rata to the Holders of the Preferred Securities and the Common Securities in
exchange for such Securities.
If, upon any such dissolution, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation Distribution,
then the amounts payable directly by the Trust on the Preferred Securities and
the Common Securities shall be paid, subject to the next paragraph, on a Pro
Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro Rata
with Holders of Preferred Securities, except that if an Event of Default has
occurred
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<PAGE>
and is continuing, the Preferred Securities shall have a priority over
the Common Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding and may be canceled by the Regular Trustees, and
(ii) Certificates representing Preferred Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accumulated and unpaid Distributions
on, such Preferred Securities until such Certificates are presented to
Lyondell or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Lyondell, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less
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<PAGE>
than 30 nor more than 60 days' notice, at a redemption price of $[50][25]
per Preferred Security and Common Security plus an amount equal to
accumulated and unpaid Distributions thereon to the date of redemption,
payable in cash (the "Redemption Price"). The date of any such repayment or
redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in paragraph 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the
Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the
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theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) [Intentionally omitted.]
(f) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No
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defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities registered in
the name of and held of record by DTC (or successor Clearing Agency) or
any other nominee, the Preferred Securities will be redeemed from, and
the distribution of the proceeds of such redemption will be made to,
DTC (or successor Clearing Agency).
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that Lyondell has paid
the Property Trustee, in immediately available funds, a sufficient
amount of cash in connection with the related redemption or maturity of
the Debentures, the Property Trustee will deposit irrevocably with DTC
(or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give
DTC (or successor Clearing Agency) irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities and provided that
Lyondell has paid the Property Trustee, in immediately available funds,
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred Securities
by check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the redemption date, Distributions will cease to
accumulate on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be outstanding and all
rights of Holders of such Preferred Securities so called for redemption
will cease, except the right of the Holders of such Preferred
Securities to receive the
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Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Preferred Securities which
have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by Lyondell pursuant to the Preferred Guarantee,
Distributions on such Preferred Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), Lyondell or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
B-10
<PAGE>
[5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the
right at any time prior to the close of business on __________, ____ or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into shares of Common Stock in the manner described herein
on and subject to the following terms and conditions:
(a) The Preferred Securities will be convertible at the office of the
Conversion Agent maintained for such purpose in the Borough of Manhattan,
The City of New York, into fully paid and nonassessable shares of Common
Stock pursuant to the Holder's direction to the Conversion Agent to exchange
such Preferred Securities for a portion of the Debentures theretofore held
by the Trust on the basis of one Preferred Security per $[50][25] principal
amount of Debentures, and immediately convert such amount of Debentures into
fully paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50] [25] principal amount of Debentures (which
is equivalent to a conversion price of $___ per share of Common Stock,
subject to certain adjustments set forth in Sections __ and __ of the
Supplemental Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Preferred Securities into Common Stock, the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Preferred Securities on behalf of such
Holder (the "Conversion Request"), together, if the Preferred Securities are
in certificated form, with such Preferred Security Certificates. The
Conversion Request shall (i) set forth the number of Preferred Securities to
be converted and the name or names, if other than the Holder, in which the
shares of Common Stock should be issued and (ii) direct the Conversion Agent
(a) to exchange such Preferred Securities for a portion of the Debentures
held by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf of such
Holder into Common Stock, subject to certain adjustments set forth in the
Supplemental Indenture (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Trust of the Holder's
election to exchange Preferred Securities for a portion of the Debentures
held by the Trust and the Trust shall, upon receipt of such notice, deliver
to the Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. If a Preferred Security is
surrendered for conversion after the close of business on any regular record
date for payment of a
B-11
<PAGE>
Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash
to the person in whose name the Preferred Security is registered at the
close of business on such record date, and (other than a Preferred Security
or a portion of a Preferred Security called for redemption on a redemption
date occurring after such record date and on or prior to such Distribution
payment date) when so surrendered for conversion, the Preferred Security
must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date. Except as provided above, neither
the Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated
and unpaid Distributions accumulated on the Preferred Securities surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, and the delivery of
Common Stock upon conversion of the Preferred Securities shall be deemed to
constitute full payment for all accumulated and unpaid Distributions on the
Preferred Securities. Preferred Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Preferred Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share
to the Person or Persons entitled to receive the same, unless otherwise
directed by the Holder in the Notice of Conversion, and the Conversion Agent
shall distribute such certificate or certificates, together with the
applicable cash payment, if any, to such Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance thereof
appoints The First National Bank of Chicago as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of
the Holders of Preferred Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Preferred Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Preferred Securities in accordance
with this Section and (ii) to convert all or a portion of the Debentures
into
B-12
<PAGE>
Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a
new Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Preferred Securities
so converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver upon
conversion of Debentures, shares of Common Stock reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of the
Debentures to the converting Holder of Preferred Securities free and clear
of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Sponsor and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of Common Stock (and all requirements to list
Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common Stock
to the Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder of Preferred Securities upon conversion
of the Preferred Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock
B-13
<PAGE>
by the Trust upon conversion of the Preferred Securities. The Sponsor shall
not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the Preferred Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has
been paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Preferred
Securities or set forth in this Exhibit B to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.01 of the Declaration, then the Holders of outstanding
Securities will be entitled to vote on such amendment or proposal as a
single class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class of Securities will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
Majority in liquidation amount of such class of Securities and (B)
amendments to the Declaration shall be subject to such further requirements
as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with
B-14
<PAGE>
respect to such amendment, modification or termination. The Property Trustee
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Property Trustee may only vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above, the vote of Holders
of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
In addition to obtaining the foregoing approvals of such Holders of the
Preferred Securities and Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that for United States federal income tax purposes the
Trust will not be classified as other than a grantor trust on account of such
action.
If an Event of Default has occurred and is continuing, then the Holders of a
Majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
under the
B-15
<PAGE>
Debentures, a Holder of Preferred Securities, to the extent permitted by
applicable law, may, after a period of 30 days has elapsed since such Holder's
written request to the Property Trustee to enforce such rights, institute a
legal proceeding directly against the Sponsor to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person; provided further, that, if an
Event of Default has occurred and is continuing and such event is attributed to
the failure of the Sponsor to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such Holder (a
"Holder Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Holder Direct Action, the Company will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holders of Preferred Securities in such
Holder Direct Action. Except as provided in the preceding sentences, the Holders
of Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Lyondell or by any Affiliate of
Lyondell shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
B-16
<PAGE>
Except as provided in this paragraph 6, Holders of the Preferred Securities
will have no rights to increase or decrease the number of Trustees or to
appoint, remove or replace a Trustee, which voting rights are vested exclusively
in the Holders of the Common Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment thereon
will be made Pro Rata with the Common Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Preferred Securities
to payment in respect of Distributions and payments upon liquidation, redemption
or otherwise rank in priority to the rights of Holders of the Common Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Preferred Security will be made only upon surrender of such
Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee[, including the subordination provisions therein,] and
(ii) the Indenture and the Debentures, including the subordination provisions
of the Indenture.
B-17
<PAGE>
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no
preemptive or similar rights to subscribe to any additional Preferred Securities
or Common Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Preferred Securities without charge on written request to the Trust at its
principal place of business.
B-18
<PAGE>
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS
PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE
FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
LYONDELL TRUST III OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities: ____________
___________
Aggregate Liquidation Amount: $____________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
Lyondell Trust III
____% Convertible Preferred Trust Securities, Series C
(liquidation amount $[50][25] per Preferred Security)
B-19
<PAGE>
Lyondell Trust III, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _________ (the "Holder")
is the registered owner of _____ (______) preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
and designated the ____% Convertible Preferred Trust Securities, Series C
(liquidation amount $[50][25] per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of ___________, ____, as the same may be amended
from time to time (the "Declaration") including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred
Securities and the Common Securities issued by the Trust pursuant to the
Declaration represent undivided beneficial interests in the assets of the Trust,
including the Debentures (as defined in the Declaration) issued by Lyondell
Chemical Company, a Delaware corporation ("Lyondell"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement of Lyondell dated as of __________, ____
(the "Guarantee") to the extent provided therein. The Trust will furnish a copy
of the Declaration, the Guarantee and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have (i) agreed to the terms of the Indenture and the Debentures, including that
the Debentures are subordinate and junior in right of payment to all Senior Debt
(as defined in the Supplemental Indenture) as and to the extent provided in the
Indenture, and (ii) agreed to the terms of the Guarantee, including that the
Guarantee [is subordinate and junior in right of payment to] [is pari passu to]
all other liabilities of Lyondell, including the Debentures, except those made
[pari passu or] subordinate by their terms, and senior to all capital stock
[(other than the most senior preferred stock issued, from time to time, if any,
by Lyondell, which preferred stock will rank pari passu with the Guarantee)] now
or hereafter issued by Lyondell and to any guarantee now or hereafter entered
into by Lyondell in respect of any of its capital stock [(other than the most
senior preferred stock issued, from time to time, if any, by Lyondell)].
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
B-20
<PAGE>
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ____ day of __________, ____.
LYONDELL TRUST III
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
By:_________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
B-21
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from _________,
____, and will be payable quarterly in arrears, on ______, ______, ______ and
______ of each year, commencing on ________, ____, but only if and to the extent
that interest payments are made in respect of the Debentures held by the
Property Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for the
Debentures to defer payments of interest on the Debentures by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures. As a consequence of such deferral, Distributions
shall also be deferred. Despite such deferral, Distributions will continue to
accumulate with additional distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded quarterly during any
such Extension Period; provided that no Extension Period shall extend beyond the
stated maturity of the Debentures. Prior to the termination of any such
Extension Period, Lyondell may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, Lyondell may commence a new Extension Period, subject to the above
requirements. Payments of accumulated Distributions will be payable to Holders
of Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
B-22
<PAGE>
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock
(as defined in the Declaration), through (i) the exchange of Preferred
Securities for a portion of the Debentures and (ii) the immediate conversion of
such Debentures into Common Stock, in the manner and according to the terms set
forth in the Declaration.]
B-23
<PAGE>
[CONVERSION REQUEST
To: ________________, as Property Trustee of Lyondell Trust III
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust, dated as of ______, ____ (as amended from time to
time, the "Declaration"), by _________, ________ and __________ as Regular
Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The First
National Bank of Chicago, as the Property Trustee, Lyondell Chemical Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to the Declaration)
in accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
Lyondell Trust III (at the rate of exchange specified in the terms of the
Preferred Securities set forth as Exhibit B to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned into Common
Stock (at the conversion rate specified in the terms of the Preferred Securities
set forth as Exhibit B to the Declaration, subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration)).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
B-24
<PAGE>
Date: _______________, _____
in whole ___ in part ___
Number of Preferred Securities to be converted:
_______________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the shares of Common Stock are to be
issued, along with the address or addresses of such
person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:** _________
__________________
**(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership
B-25
<PAGE>
__________________
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
B-26
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax identification number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
B-27
<PAGE>
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust
of Lyondell Trust III dated as of ____________, ____ (as amended from time to
time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Common Securities of the
Trust with an aggregate liquidation amount at any time outstanding with respect
to the assets of the Trust of ___________________________________________
Dollars ($___________), and each with a liquidation amount with respect to the
assets of the Trust of $[50][25] per Common Security, are hereby designated as
"____% Convertible Common Trust Securities, Series C". The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Annex I, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice. The Common
Securities are to be issued and sold to Lyondell in consideration of
$_____________ in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Lyondell having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $[50][25] per Common Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded quarterly. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds
<PAGE>
on hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Common Securities will accumulate from
___________, ____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year commencing on ________________, ____,
except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Lyondell shall not be in default in the payment of
interest on the Debentures, Lyondell has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of
such deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Lyondell
may further extend such Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed 20 consecutive quarterly interest periods. Upon the termination
of any Extension Period and the payment of all amounts then due, Lyondell
may commence a new Extension Period, subject to the above requirements.
Payments of accumulated Distributions will be payable to Holders of Common
Securities as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by
the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be one business day prior to the relevant
Distribution date, and if the Preferred Securities are no longer in book-
entry only form, the relevant record dates for the Common Securities
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<PAGE>
will be the fifteenth (15th) day of the month prior to the relevant
Distribution date, which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions payable on any
Common Securities that are not punctually paid on any Distribution payment
date as a result of Lyondell's having failed to make the corresponding
interest payment on the Debentures will forthwith cease to be payable to the
person in whose name such Common Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Common Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Lyondell has elected to make a full or partial
payment of interest accrued on the Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions
are payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Common Securities and
the Preferred Securities will be paid Pro Rata (as defined below) to the
Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed Pro Rata among the Holders of the Preferred
Securities and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date of
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
C-3
<PAGE>
satisfaction of liabilities to the creditors of the Trust, an amount equal
to the aggregate of the stated liquidation amount of $[50][25] per Preferred
Security and Common Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and the Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on, such Preferred Securities and the
Common Securities, shall be distributed Pro Rata to the Holders of the
Preferred Securities and the Common Securities in exchange for such
Securities.
If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
the Preferred Securities and the Common Securities shall be paid, subject
to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination, Pro
Rata with Holders of Preferred Securities, except that if an Event of
Default has occurred and is continuing, the Preferred Securities shall have
a priority over the Common Securities with respect to such Liquidation
Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Preferred Securities and the Common Securities
of such Holder, in exchange for the Preferred Securities and Common
Securities of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Common Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
C-4
<PAGE>
interest equal to accumulated and unpaid Distributions on, such Common
Securities until such Certificates are presented to Lyondell or its agent
for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only if
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $[50][25] per Preferred Security and
Common Security plus an amount equal to accumulated and unpaid Distributions
thereon to the date of redemption, payable in cash (the "Redemption Price").
The date of any such repayment or redemption of Preferred Securities and
Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in paragraph 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Lyondell pursuant to the Indenture will redeem
Debentures only in whole and, as a result, the Trust may redeem the Common
Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Lyondell shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Debentures in whole or in part
for cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Redemption Price on a Pro Rata basis. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of
C-5
<PAGE>
Default has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the
Redemption Price.
"Tax Event" means that the Company and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that on or after ____________, ____ as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after _________, ____, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by Lyondell to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by Lyondell
for United States federal income tax purposes.
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Common
Securities unless all accumulated and unpaid Distributions have been paid on
all Common Securities for all quarterly Distribution periods terminating on
or prior to the date of redemption.
C-6
<PAGE>
(e) (i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed
will be redeemed Pro Rata from each Holder of Common Securities
(subject to adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this
paragraph 4 (which notice will be irrevocable), then immediately prior
to the close of business on the redemption date, provided that Lyondell
has paid to the Property Trustee in immediately available funds a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, Distributions will cease to accumulate on
the Common Securities called for redemption, such Common Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Common Securities so called for redemption will cease, except the
right of the Holders of such Common Securities to receive the
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any Common Securities which have
been so called for redemption. If any date fixed for redemption of
Common Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business
C-7
<PAGE>
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Common Securities is improperly
withheld or refused and not paid by the Property Trustee, Distributions
on such Common Securities will continue to accumulate, from the
original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to Holders of the Common Securities.
[5. CONVERSION RIGHTS.
The Holders of Common Securities shall have the right at any time prior to
the close of business on , ____ or, in the case of Common Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date, at their option, to cause the Conversion Agent to
convert Common Securities, on behalf of the converting Holders, into shares of
Common Stock in the manner described herein on and subject to the following
terms and conditions:
(a) The Common Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by the
Trust on the basis of one Common Security per $[50][25] principal amount of
Debentures, and immediately convert such amount of Debentures into fully
paid and nonassessable shares of Common Stock at an initial rate of __
shares of Common Stock per $[50][25] principal amount of Debentures (which
is equivalent to a
C-8
<PAGE>
conversion price of $__ per share of Common Stock, subject to certain
adjustments set forth in Sections __ and __ of the Supplemental Indenture
(as so adjusted, "Conversion Price")).
(b) In order to convert Common Securities into Common Stock, the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Common Securities on behalf of such Holder
(the "Conversion Request"), together, if the Common Securities are in
certificated form, with such Common Security Certificates. The Conversion
Request shall (i) set forth the number of Common Securities to be converted
and the name or names, if other than the Holder, in which the shares of
Common Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Common Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock, subject to certain adjustments set forth in the Supplemental
Indenture (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Common Securities for a portion of the Debentures held by the Trust, and the
Trust shall, upon receipt of such notice, deliver to the Conversion Agent
the appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the Sponsor
of the Holder's election to convert such Debentures into shares of Common
Stock. If a Common Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date,
then, notwithstanding such conversion, the Distribution payable on such
Distribution payment date will be paid in cash to the person in whose name
the Common Security is registered at the close of business on such record
date, and (other than a Common Security or a portion of a Common Security
called for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered for
conversion, the Common Security must be accompanied by payment of an amount
equal to the Distribution payable on such Distribution payment date. Except
as provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any conversion
on account of any accumulated and unpaid Distributions accumulated on the
Common Securities surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Common Stock issued upon
such conversion, and the delivery of Common Stock upon conversion of the
Common Securities shall be deemed to constitute full payment for all
accumulated and unpaid Distributions on the Common Securities.
C-9
<PAGE>
Common Securities shall be deemed to have been converted immediately prior
to the close of business on the day on which a Notice of Conversion relating
to such Common Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons entitled
to receive Common Stock issuable upon conversion of the Debentures shall be
treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the Conversion
Date, the Sponsor shall issue and deliver at the office of the Conversion
Agent a certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if any,
in lieu of any fraction of any share to the Person or Persons entitled to
receive the same, unless otherwise directed by the Holder in the Notice of
Conversion, and the Conversion Agent shall distribute such certificate or
certificates, together with the applicable cash payment, if any, to such
Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof appoints
The First National Bank of Chicago as the "Conversion Agent" for the purpose
of effecting the conversion of Common Securities in accordance with this
Section. In effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the Holders of
Common Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Common Securities from
time to time for Debentures held by the Trust in connection with the
conversion of such Common Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid by
the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Common Stock on the date such Common Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which in
turn will make such payment to the Holder or Holders of Common Securities so
converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time
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<PAGE>
to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Sponsor shall be entitled to
deliver upon conversion of Debentures, shares of Common Stock reacquired and
held in the treasury of the Sponsor (in lieu of the issuance of authorized
and unissued shares of Common Stock), so long as any such treasury shares
are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock received
upon conversion of the Debentures to the converting Holder of Common
Securities free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of the
Sponsor and the Trust shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Common Stock
(and all requirements to list Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Sponsor
to lawfully issue Common Stock to the Trust upon conversion of the
Debentures and the Trust to lawfully deliver Common Stock to each Holder of
Common Securities upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Common Securities. The Sponsor shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that in which the Common Securities so converted were registered, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Common
Securities or set forth in this Exhibit C to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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<PAGE>
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment,
removal or replacement to be approved by Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on such amendment or
proposal as a single class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class of Securities will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a Majority in liquidation amount
of such class of Securities, (B) the rights of Holders of Common Securities
under Section 5.02 of the Declaration to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the consent
of each Holder of Common Securities, and (C) amendments to the Declaration shall
be subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take
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<PAGE>
any action in accordance with the directions of the Holders of Securities unless
the Property Trustee shall have received, at the expense of the Sponsor, an
Opinion of Counsel experienced in such matters to the effect that the Trust will
not be classified for United States federal income tax purposes as other than a
grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee of the Indenture (the "Debenture Trustee"),
or exercising any trust or power conferred on such Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable under
Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Common Securities and Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities
and Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an Opinion of Counsel experienced in such matters to the
effect that for United States federal income tax purposes the Trust will not be
classified as other than a grantor trust on account of such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
C-13
<PAGE>
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote to be mailed to each Holder of
record of Common Securities. Each such notice will include a statement setting
forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for
the Trust to redeem and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration.
7. PRO RATA TREATMENT. A reference in these terms of the Common Securities
to any payment, Distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon will
be made Pro Rata with the Preferred Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of
C-14
<PAGE>
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of the
Trust by check mailed to the address of the persons entitled thereto and that
the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
12. MISCELLANEOUS. These terms shall constitute a part of the Declaration.
The Trust will provide a copy of the Declaration and the Indenture to a Holder
of Common Securities without charge on written request to the Trust at its
principal place of business.
C-15
<PAGE>
Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
________________ ____________________
Certificate Evidencing Common Securities
of
Lyondell Trust III
____% Convertible Common Trust Securities, Series C
(liquidation amount $[50][25] per Common Security)
Lyondell Trust III, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of ____________________________ (_________)
common securities of the Trust representing common undivided beneficial
interests in the assets of the Trust and designated the "____% Convertible
Common Trust Securities, Series C" (liquidation amount $[50][25] per Common
Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for transfer
and satisfaction of the other conditions set forth in the Declaration (as
defined below) including, without limitation, Section 9.01(c) thereof. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this Certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Declaration of
Trust of the Trust dated as of __________, ____, as the same may be amended from
time to time (the "Declaration") including the designation of the terms of
Common Securities as set forth in Exhibit C thereto. The Common Securities and
the Preferred Securities issued by the Trust
C-16
<PAGE>
pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Debentures (as defined in the Declaration)
issued by Lyondell Chemical Company, a Delaware corporation ("Lyondell"), to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust will
furnish a copy of the Declaration and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to
have agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Supplemental Indenture) as and to the extent provided in the
Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration and
is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ___ day of _____________, ____.
LYONDELL TRUST III
By ________________________, as Regular Trustee
Name:
Title: Regular Trustee
By _________________________, as Regular Trustee
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:___________________________
Authorized Signature
C-17
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $[50][25]
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will accumulate additional distributions thereon at the
Coupon Rate per annum (to the extent permitted by applicable law) compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Common Securities will accumulate from _________, ____
and will be payable quarterly in arrears, on _____________, ____________,
_____________ and _____________ of each year, commencing on ________, ____, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Lyondell shall not be in
default in the payment of interest on the Debentures, Lyondell has the right
under the Indenture for the Debentures to defer payments of interest on the
Debentures by extending the interest payment period at any time and from time to
time on the Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions thereon
(to the extent permitted by applicable law but not at a rate greater than the
rate at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures.
Prior to the termination of any such Extension Period, Lyondell may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period and
the payment of all amounts then due, Lyondell may commence a new Extension
Period, subject to the above requirements. Payments of accumulated
Distributions will be payable to Holders of Common Securities as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period.
C-18
<PAGE>
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock (as
defined in the Declaration), through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock, in the manner and according to the terms set forth in the
Declaration.]
C-19
<PAGE>
[CONVERSION REQUEST
To: ______________________,
as Property Trustee of Lyondell Trust III
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock (as that term is defined in the Amended and
Restated Declaration of Trust dated as of ______________, ____ (as amended from
time to time, the "Declaration"), by _________, _____________ and ____________,
as Regular Trustees, First Chicago Delaware Inc., as the Delaware Trustee, The
First National Bank of Chicago, as the Property Trustee, Lyondell Chemical
Company, as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to the
Declaration) in accordance with and subject to the terms and conditions of the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by Lyondell Trust III (at the rate of exchange specified in the terms of
the Common Securities set forth as Exhibit C to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Exhibit C to the Declaration), subject to certain adjustments set
forth in the Supplemental Indenture (as that term is defined in the
Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: _____________, _____
in whole ___ in part ___
Number of Common Securities to be converted:
_______________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the
C-20
<PAGE>
shares of Common Stock are to be issued, along with the
address or addresses of such person or persons:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Signature (for conversion only)
Please Print or Type Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
__________________________________
__________________________________
__________________________________
Signature Guarantee:* ____________
______________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
C-21
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
C-22
<PAGE>
CERTIFICATE OF TRUST
OF
LYONDELL TRUST II
THIS CERTIFICATE OF TRUST of Lyondell Trust II (the "TRUST"), dated as of
November 9, 1998, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code (S) 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust II.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the
time of its filing with the Secretary of State of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust
at the time of filing this Certificate of Trust, have executed this Certificate
of Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
--------------------------------
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
--------------------------------
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
--------------------------------
2
<PAGE>
CERTIFICATE OF TRUST
OF
LYONDELL TRUST III
THIS CERTIFICATE OF TRUST of Lyondell Trust III (the "TRUST"), dated as of
November 9, 1998, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code (S) 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Lyondell
Trust III.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective at the
time of its filing with the Secretary of State of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust
at the time of filing this Certificate of Trust, have executed this Certificate
of Trust as of the date first above written.
First Chicago Delaware Inc.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
--------------------------------
Name: Sandra L. Caruba
Title: Vice President
The First National Bank of Chicago,
as Property Trustee
By: /s/ Sandra L. Caruba
---------------------------------
Name: Sandra L. Caruba
Title: Vice President
Kerry A. Galvin,
as Regular Trustee
By: /s/ Kerry A. Galvin
---------------------------------
2
<PAGE>
==============================================================
LYONDELL CHEMICAL COMPANY
GUARANTEE AGREEMENT
LYONDELL TRUST __
-----------------
Dated as of __________, ____
-----------------
==============================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
Definitions
Section 1.01. Definitions............................................. 1
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application........................ 5
Section 2.02. Lists of Holders of Preferred Securities................ 5
Section 2.03. Reports by the Guarantee Trustee........................ 6
Section 2.04. Periodic Reports to the Guarantee Trustee............... 6
Section 2.05. Evidence of Compliance with Conditions Precedent........ 6
Section 2.06. Events of Default; Waiver............................... 6
Section 2.07. Disclosure of Information............................... 6
Section 2.08. Conflicting Interest.................................... 7
ARTICLE 3
Powers, Duties and Rights of The Guarantee Trustee
Section 3.01. Powers and Duties of the Guarantee Trustee.............. 7
Section 3.02. Certain Rights and Duties of the Guarantee Trustee...... 8
Section 3.03. Not Responsible for Recitals or Issuance of Guarantee... 10
ARTICLE 4
Guarantee Trustee
Section 4.01. Qualifications.......................................... 10
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee................................................. 11
ARTICLE 5
Guarantee
Section 5.01. Guarantee............................................... 12
Section 5.02. Waiver of Notice........................................ 12
Section 5.03. Obligations Not Affected................................ 12
Section 5.04. Enforcement of Guarantee................................ 13
Section 5.05. Guarantee of Payment.................................... 14
Section 5.06. Subrogation............................................. 14
Section 5.07. Independent Obligations................................. 14
i
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of __________, ____, is executed and
delivered by LYONDELL CHEMICAL COMPANY, a Delaware corporation (the
"Guarantor"), and The First National Bank of Chicago, a national banking
association, as the initial Guarantee Trustee (as defined herein) for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of Lyondell Trust __, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________, ____ among the trustees of the
Issuer named therein, LYONDELL CHEMICAL COMPANY, as Sponsor, and the Holders
from time to time of preferred undivided beneficial interests in the assets of
the Issuer, the Issuer may issue up to _______________ aggregate liquidation
amount of its $_____ Convertible Preferred Trust Securities, Series __ (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in Exhibit B to the
Declaration, of which $_____________ liquidation amount of Preferred Securities
is being issued as of the date hereof. Up to the remaining $______________
liquidation amount of Preferred Securities may be issued by the Issuer if and to
the extent that the over-allotment option granted by the Guarantor and the
Issuer pursuant to the Underwriting Agreement (as defined in the Declaration) is
exercised by the Underwriters named in the Underwriting Agreement; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities, the
Guarantor desires to irrevocably and unconditionally agree, to the extent set
forth herein, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
NOW, THEREFORE, in consideration of the purchase by the initial purchasers
thereof of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.
ARTICLE 1
Definitions
Section 1.01. Definitions. (a) Capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01;
<PAGE>
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Debentures" means the series of Subordinated Debentures issued by the
Guarantor under the Indenture to the Property Trustee and entitled the "_____%
Subordinated Debentures due ____."
"Distributions" means the periodic distributions and other payments payable
to Holders in accordance with the terms of the Preferred Securities set forth in
Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
-------- -------
except with respect to a default in payment of any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
2
<PAGE>
"Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions and the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case the Guarantor has made a payment to the Property
Trustee of interest or principal on the Debentures and (ii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to Holders in exchange for
Preferred Securities or the redemption of all the Preferred Securities upon the
maturity or redemption of the Debentures as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer as required by applicable law (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, a national
banking association, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee Agreement,
and thereafter means each such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
-------- -------
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of ______ __, ____
between the Guarantor and The First National Bank of Chicago, as trustee, as
supplemented by the ________ Supplemental Indenture thereto dated as of
___________, ____ (the "Supplemental Indenture"), pursuant to which the
Debentures are to be issued to the Property Trustee.
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class, who are the record
owners of Preferred Securities whose liquidation amount (including the stated
amount that
3
<PAGE>
would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board, Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of such
Person, and delivered to the Guarantee Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 2.05 shall be the principal
executive, financial or accounting officer of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under the
Declaration.
"Redemption Price" means the amount payable on redemption of the Preferred
Securities in accordance with the terms of the Preferred Securities.
4
<PAGE>
"Responsible Officer" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice president, the
secretary, the treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Guarantee Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by (SS) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(c) the application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.
Section 2.02. Lists of Holders of Preferred Securities. (a) The Guarantor
shall provide the Guarantee Trustee (unless the Guarantee Trustee is otherwise
the registrar of the Preferred Securities) with a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, (i) within one Business Day (as
defined in the Declaration) after May 15 and November 15 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the
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Guarantee Trustee; provided, that the Guarantor shall not be obligated to
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provide such List of Holders at any time that the Guarantor certifies in writing
to the Guarantee Trustee that the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the Guarantor. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) the Guarantee Trustee shall comply with its obligations under (SS)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Guarantee Trustee. Within 60 days after May 15
of each year, commencing May 15, ____, the Guarantee Trustee shall provide to
the Holders such reports as are required by (S) 313 of the Trust Indenture Act,
if any, in the form, in the manner and at the times provided by (S) 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the other
requirements of (S) 313 of the Trust Indenture Act.
Section 2.04. Periodic Reports to the Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Commission and the Holders, as
applicable, such documents, reports and information as required by (S)
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by (S) 314(a)(4) and (c) of the Trust Indenture Act, any
such certificates to be provided in the form, in the manner and at the times
required by (S) 314(a)(4) and (c) of the Trust Indenture Act (provided that any
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certificate to be provided pursuant to (S) 314(a)(4) of the Trust Indenture Act
shall be provided within 120 days of the end of each fiscal year of the Issuer).
Section 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in (S) 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to (S) 314(c) may be given in the form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver. (a) The Holders of a Majority in
liquidation amount of the Preferred Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default, or impair any right consequent thereon.
(b) The right of any Holder to receive payment of the Guarantee Payments
in accordance with this Guarantee Agreement, or to institute suit for the
enforcement of any such payment, shall not be impaired without the consent of
each such Holder.
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Section 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders in accordance with (S) 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law, or any law
hereafter enacted which does not specifically refer to (S) 312 of the Trust
Indenture Act, nor shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under (S) 312(b) of the Trust
Indenture Act.
Section 2.08. Conflicting Interest. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
Powers, Duties and Rights of The Guarantee Trustee
Section 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04(iv). The right, title and interest of the
Guarantee Trustee to this Guarantee Agreement shall vest automatically in each
Person who may hereafter be appointed as Guarantee Trustee in accordance with
Article 4. Such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee in respect of the Guarantee Payments will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of, or for the
benefit of, the Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default known to the Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders, as their names and addresses appear upon
the register, notice of all such Events of Default, unless such defaults shall
have been cured before the giving of such notice; provided, that, the Guarantee
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Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible
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Officers, of the Guarantee Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders. The Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default except any Event of
Default as to which the Guarantee Trustee shall have received written notice or
a Responsible Officer charged with the administration of this Guarantee
Agreement shall have obtained written notice of such Event of Default.
(e) The Guarantee Trustee shall continue to serve as a trustee until a
Successor Guarantee Trustee has been appointed and accepted that appointment in
accordance with Article 4.
Section 3.02. Certain Rights and Duties of the Guarantee Trustee. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or the Trust Indenture Act
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are specifically required to be furnished to the Guarantee Trustee,
the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Guarantee Agreement or the Trust Indenture Act, as the case may be;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount of
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officers' Certificate, which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which may
be counsel to the Guarantor or any of its Affiliates and may include any of
its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
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shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have offered
to the Guarantee Trustee reasonable security and indemnity against the
costs, expenses (including its attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; provided that nothing contained in this clause (iv) shall
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relieve the Guarantee Trustee of the obligation, upon the occurrence of an
Event of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Guarantee Agreement, and to use
the same degree of care and skill in this exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders and the signature of the Guarantee Trustee
or its agents alone shall be sufficient and effective to perform any such
action; and no third party shall be required to inquire as to the authority
of the Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's taking
such action.
Section 3.03. Not Responsible for Recitals or Issuance of Guarantee. The
recitals contained in this Guarantee Agreement shall be taken as the statements
of the Guarantor and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.
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ARTICLE 4
Guarantee Trustee
Section 4.01. Qualifications. There shall at all times be a Guarantee
Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a national banking association or corporation organized and
doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this clause (ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02.
If the Guarantee Trustee has or shall acquire any "conflicting interest" within
the meaning of (S) 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of (S) 310(b) of
the Trust Indenture Act.
Section 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause by the Guarantor upon 60 days' prior written
notice.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until
his successor shall have been appointed or until its removal or resignation.
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(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that no such resignation of the Guarantee
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Trustee shall be effective until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
Guarantee
Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
Section 5.02. Waiver of Notice. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
extend the interest payment period on the Debentures and the Guarantor shall not
be obligated hereunder to make any Guarantee Payment during any Extended
Interest Payment Period (as defined in the Supplemental Indenture) with respect
to the Distributions on the Preferred Securities.
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Section 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for
payment of Distributions that result from any Extended Interest Payment
Period), Redemption Price, Liquidation Distribution (as defined in the
Declaration) or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions
that result from any Extended Interest Payment Period);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the Guarantor
with respect to the Guarantee Payments shall be absolute and unconditional
under any and all circumstances.
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There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.04. Enforcement of Guarantee. The Guarantor and the Guarantee
Trustee expressly acknowledge that (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or other power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) if the Guarantee Trustee fails to enforce this Guarantee
Agreement as provided in clauses (ii) and (iii) above, any Holder may institute
a legal proceeding directly against the Guarantor to enforce its rights under
this Guarantee Agreement, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may
directly institute a proceeding against the Guarantor for enforcement of this
Guarantee Agreement for such payment without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not merely of collection. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon the
distribution of the Debentures to the Holders as provided in the Declaration.
Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
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that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
Section 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
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terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
Limitation of Transactions; [Subordination] [Pari Passu]
Section 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock (other than (a)
dividends or distributions in shares of, or options, warrants, rights to
subscribe for or purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
as a result of a reclassification of the Guarantor's capital stock or the
exchange or the conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock, (d) the
payment of accrued dividends and the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or (e) purchases of the Guarantor's common stock related to the issuance of the
Guarantor's common stock or rights under any of the Guarantor's benefit plans
for its directors, officers or employees, any of the Guarantor's dividend
reinvestment plans or stock purchase plans, or any of the benefit plans of any
of the Guarantor's Affiliates, for such Affiliate's directors, officers or
employees) or make any guarantee payment with respect thereto, if at such time
(i) the Guarantor shall be in default with respect to its Guarantee Payments or
other payment obligations hereunder, (ii) there shall have occurred any event of
default under the Declaration or (iii) the Guarantor shall have given notice of
its election of an Extended Interest Payment Period and such period, or any
extension thereof, is continuing. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section 9.01 of the Declaration; provided that any
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permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's ownership of the Common Securities and (ii) will use reasonable
efforts to cause the Issuer to continue to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Debentures as provided in the Declaration.
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Section 6.02. [Subordination] [Pari Passu]. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank [(i)
subordinate and junior] [pari passu] in right of payment to all other
liabilities of the Guarantor, including the Debentures, except those made [pari
passu or] subordinate by their terms[, and (ii) senior to all capital stock
(other than the most senior preferred stock issued, from time to time, if any,
by the Guarantor, which preferred stock will rank pari passu with this Guarantee
Agreement) now or hereafter issued by the Guarantor and to any guarantee now or
hereafter entered into by the Guarantor in respect of any of its capital stock
(other than the most senior preferred stock issued, from time to time, if any,
by the Guarantor)]. The Guarantor's obligations under this Guarantee Agreement
will rank pari passu with respect to obligations under other guarantee
agreements which it may enter into from time to time to the extent that (i) such
agreements shall be entered into in substantially the form hereof and provide
for comparable guarantees by the Guarantor of payment on preferred securities
issued by other trusts, partnerships or other entities affiliated with the
Guarantor that are financing vehicles of the Guarantor and (ii) the debentures
or other evidences of indebtedness of the Company relating to such preferred
securities are senior, unsecured indebtedness of the Company.
ARTICLE 7
Termination
Section 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect (i) upon full payment of the Redemption Price of
all Preferred Securities, (ii) upon the distribution of Debentures to Holders
and holders of Common Securities in exchange for all of the Preferred Securities
and Common Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or under this
Guarantee Agreement.
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ARTICLE 8
Limitation of Liability; Indemnification
Section 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Holder for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
Section 8.02. Indemnification. To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
Section 8.03. Survive Termination. The provisions of Sections 8.01 and
8.02 shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
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ARTICLE 9
Miscellaneous
Section 9.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture, the Guarantor shall not assign its obligations
hereunder.
Section 9.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of Holders in any material respect (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Guarantor and the Holders of not less
than a Majority in liquidation amount of the Preferred Securities. The
provisions of Section 12.02 of the Declaration concerning meetings of Holders
shall apply to the giving of such approval.
Section 9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Lyondell Chemical Company
1221 McKinney Street
Suite 1600
Houston, Texas 77010
Attention: Corporate Secretary
Telecopy: (713) 309-4718
(b) if given to the Guarantee Trustee, to the address set forth below or
such other address as the Guarantee Trustee may give notice of to the Holders:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Telecopy: (312) 407-1708
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(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 9.04. Genders. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
Section 9.05. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and subject to Section 3.01(a) is not separately transferable
from the Preferred Securities.
Section 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
Section 9.07. Counterparts. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
Section 9.08. Exercise of Overallotment Option. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of the overallotment
option referred to in the first WHEREAS clause, the Guarantor agrees to give
prompt notice thereof to the Guarantee Trustee but the failure to give such
notice shall not relieve the Guarantor of any of its obligations hereunder.
Section 9.09. Limited Liability. The Holders, in their capacities as such,
shall not be personally liable for any liabilities or obligations of the
Guarantor arising out of this Guarantee Agreement, and the parties hereby agree
that the Holders, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to the stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
19
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
LYONDELL CHEMICAL
COMPANY
By:
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
As Guarantee Trustee
By:
--------------------------
Name:
Title:
20
<PAGE>
STATE OF ________ )
)
COUNTY OF ________ )
BEFORE ME, the undersigned authority, on this ____ day of ____________,
____, personally appeared _______________ of LYONDELL CHEMICAL COMPANY, known to
me (or proved to me by introduction upon the oath of a person known to me) to be
the person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such company for
the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, ____.
[SEAL]
______________________________________
NOTARY PUBLIC, STATE OF ______________
Print Name:___________________________
Commission Expires:___________________
21
<PAGE>
STATE OF ________ )
)
COUNTY OF ________ )
BEFORE ME, the undersigned authority, on this ____ day of ____________,
____, personally appeared _______________ of THE FIRST NATIONAL BANK OF CHICAGO,
known to me (or proved to me by introduction upon the oath of a person known to
me) to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he/she executed the same as the act of
such company for the purposes and consideration herein expressed and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, ____.
[SEAL]
____________________________________
NOTARY PUBLIC, STATE OF ____________
Print Name:_________________________
Commission Expires:_________________
22
<PAGE>
EXHIBIT 5.1
<TABLE>
<CAPTION>
<S> <C> <C>
AUSTIN BAKER & BOTTS
DALLAS L.L.P.
MOSCOW ONE SHELL PLAZA
NEW YORK 910 LOUISIANA TELEPHONE: (713) 229-1234
WASHINGTON, D.C. HOUSTON, TEXAS 77002-4995 FACSIMILE: (713) 229-1522
</TABLE>
March 31, 1999
Lyondell Chemical Company
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
Gentlemen:
We have acted as counsel for the Registrants (as hereinafter defined)
in connection with the Registration Statement on Form S-3 (Reg. No. 333-60429),
as amended to date (the "Registration Statement"), filed by Lyondell Trust I,
Lyondell Trust II and Lyondell Trust III, each a statutory business trust formed
under the laws of the State of Delaware (each, a "Trust" and collectively, the
"Trusts"), and Lyondell Chemical Company, a Delaware corporation (the
"Company" and together with the Trusts, the "Issuers"), with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to (i) senior debt securities and subordinated
debt securities of the Company (the "Debt Securities"), (ii) shares of preferred
stock, par value $.01 per share, of the Company (the "Preferred Stock"), (iii)
shares of common stock, par value $1.00 per share, of the Company (the "Common
Stock"), (iv) preferred trust securities of the Trusts (the "Trust Preferred
Securities"), (v) subordinated debt securities of the Company for issuance
directly to a Trust (the "Subordinated Debt Trust Securities") and (vi) the
Company's guarantee with respect to the Trust Preferred Securities (each, a
"Guarantee," and collectively, the "Guarantees"), to be issued and sold by the
Issuers from time to time pursuant to Rule 415 under the Act for an aggregate
initial offering price not to exceed $4,000,000,000. The Debt Securities, the
Preferred Stock, the Common Stock, the Trust Preferred Securities, the
Subordinated Debt Trust Securities and the Guarantees are hereinafter referred
to as the "Securities."
In our capacity as your counsel in the connection referred to above,
we have examined (i) the Amended and Restated Certificate of Incorporation and
Amended and Restated By-Laws of the Company, each as amended to date (together,
the "Charter Documents"), (ii) the form of the Indenture to be filed as
Exhibit 4.1 to the Registration Statement to be executed by the Company and the
trustee thereunder (the "Senior Debt Indenture"), pursuant to which senior Debt
Securities may
<PAGE>
BAKER & BOTTS
L.L.P.
Lyondell Chemical Company - 2 - March 31, 1999
be issued, (iii) the form of the Indenture to be filed as Exhibit 4.2 to the
Registration Statement to be executed by the Company and the trustee thereunder
(the "Subordinated Debt Indenture"), pursuant to which subordinated Debt
Securities may be issued, (iv) the form of the Subordinated Indenture filed as
Exhibit 4.3 to the Registration Statement to be executed by the Company and The
First National Bank of Chicago, as Trustee (the "Subordinated Debt Trust
Securities Indenture"), as such Subordinated Indenture will be supplemented by a
form of Supplemental Indenture to be filed as Exhibit 4.8 to the Registration
Statement, pursuant to which each series of Subordinated Debt Trust Securities
will be issued (each, a "Supplemental Indenture" and collectively, the
"Supplemental Indentures"), (v) the form of the Amended and Restated Declaration
of Trust for each of the Trusts filed as Exhibits 4.5.1, 4.5.2 and 4.5.3 to the
Registration Statement, (vi) the form of the Guarantees filed as Exhibit 4.10 to
the Registration Statement (a "Guarantee Agreement") and (vii) the originals, or
copies certified or otherwise identified, of corporate records of the Company,
including minute books of the Company as furnished to us by the Company,
certificates of public officials and of representatives of the Company and the
Trusts, statutes and other instruments and documents as a basis for the opinions
hereafter expressed. In giving such opinions, we have relied upon certificates
of officers of the Company with respect to the accuracy of the material factual
matters contained in such certificates. In making our examination, we have
assumed that all signatures on documents examined by us are genuine, that all
documents submitted to us as originals are authentic and that all documents
submitted to us as certified or photostatic copies conform with the original
copies of such documents.
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective; (ii) a Prospectus Supplement will have
been prepared and filed with the Commission describing the Securities offered
thereby; (iii) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner stated in the
Registration Statement and the appropriate Prospectus Supplement; (iv) a
definitive purchase, underwriting or similar agreement with respect to any
Securities offered will have been duly authorized and validly executed and
delivered by the Company and the other parties thereto; (v) any securities
issuable upon conversion, exchange, redemption or exercise of any Securities
being offered will be duly authorized, created and, if appropriate, reserved for
issuance upon such conversion, exchange, redemption or exercise and (vi) with
respect to shares of Common Stock or Preferred Stock offered, there will be
sufficient shares of Common Stock or Preferred Stock authorized under the
Charter Documents and not otherwise reserved for issuance.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware.
<PAGE>
BAKER & BOTTS
L.L.P.
Lyondell Chemical Company - 3 - March 31, 1999
2. With respect to shares of Common Stock, when (i) the Board of
Directors of the Company or, to the extent permitted by the General Corporation
Law of the State of Delaware and the Charter Documents, a duly constituted and
acting committee thereof (such Board of Directors or committee being hereinafter
referred to as the "Board") has taken all necessary corporate action to approve
the issuance thereof and the terms of the offering of shares of Common Stock and
related matters, and (ii) certificates representing the shares of Common Stock
have been duly executed, countersigned, registered and delivered either (a) in
accordance with the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor (not
less than the par value of the Common Stock) provided for therein, or (b) upon
conversion, exchange, redemption or exercise of any other Security, in
accordance with the terms of such Security or the instrument governing such
Security providing for such conversion, exchange, redemption or exercise as
approved by the Board, for the consideration approved by the Board (not less
than the par value of the Common Stock), the shares of Common Stock will be duly
authorized, validly issued, fully paid and non-assessable.
3. With respect to shares of Preferred Stock, when (i) the Board has
taken all necessary corporate action to approve and establish the terms of the
shares of Preferred Stock, to approve the issuance thereof and the terms of the
offering thereof and related matters, including the adoption of a Certificate of
Designations relating to such Preferred Stock (a "Certificate of Designations")
and the filing of such Certificate of Designations with the Secretary of State
of the State of Delaware, and (ii) certificates representing the shares of
Preferred Stock have been duly executed, countersigned, registered and delivered
either (a) in accordance with the applicable definitive purchase, underwriting
or similar agreement approved by the Board upon payment of the consideration
therefor (not less than the par value of the Preferred Stock) provided for
therein, or (b) upon conversion, exchange, redemption or exercise of any other
Security, in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion, exchange, redemption or
exercise as approved by the Board, for the consideration approved by the Board
(not less than the par value of the Preferred Stock), the shares of Preferred
Stock will be duly authorized, validly issued, fully paid and non-assessable.
4. With respect to Debt Securities to be issued under the Senior
Debt Indenture, when (i) the Senior Debt Indenture has been duly authorized and
validly executed and delivered by each of the parties thereto; (ii) the Senior
Debt Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "TIA"); (iii) the Board has taken all necessary corporate action to
approve and establish the terms of such Debt Securities, to approve the issuance
thereof and the terms of the offering thereof and related matters; and (iv) such
Debt Securities have been duly executed, authenticated, issued and delivered in
accordance with both the provisions of the Senior Debt Indenture and either (a)
the provisions of the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor
provided for therein or (b) upon conversion, exchange, redemption or exercise of
any other Security, in accordance with the terms of such Security or the
instrument governing such Security providing for
<PAGE>
BAKER & BOTTS
L.L.P.
Lyondell Chemical Company - 4 - March 31, 1999
such conversion, exchange, redemption or exercise as approved by the Board, for
the consideration approved by the Board, such Debt Securities will constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforceability thereof is
subject to the effect of (x) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting creditors' rights
generally and (y) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5. With respect to Debt Securities to be issued under the
Subordinated Debt Indenture, when (i) the Subordinated Debt Indenture has been
duly authorized and validly executed and delivered by each of the parties
thereto; (ii) the Subordinated Debt Indenture has been duly qualified under the
TIA; (iii) the Board has taken all necessary corporate action to approve and
establish the terms of such Debt Securities, to approve the issuance thereof and
the terms of the offering thereof and related matters; and (iv) such Debt
Securities have been duly executed, authenticated, issued and delivered in
accordance with both the provisions of the Subordinated Debt Indenture and
either (a) the provisions of the applicable definitive purchase, underwriting or
similar agreement approved by the Board upon payment of the consideration
therefor provided for therein or (b) upon conversion, exchange, redemption or
exercise of any other Security, in accordance with the terms of such Security or
the instrument governing such Security providing for such conversion, exchange,
redemption or exercise as approved by the Board, for the consideration approved
by the Board, such Debt Securities will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforceability thereof is subject to the effect of
(x) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws relating to or affecting creditors' rights generally and (y) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
6. With respect to a series of Subordinated Debt Trust Securities to
be issued under the Subordinated Debt Trust Securities Indenture, when (i) the
Subordinated Debt Trust Securities Indenture and the Supplemental Indenture
relating to such series of Subordinated Debt Trust Securities have been duly
authorized and validly executed and delivered by each of the parties thereto;
(ii) the Subordinated Debt Trust Securities Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended; (iii) the Board has taken all
necessary corporate action to approve and establish the terms of such series of
Subordinated Debt Trust Securities, to approve the issuance thereof and the
terms of the offering thereof and related matters; and (iv) such Subordinated
Debt Trust Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Subordinated Debt Trust
Securities Indenture and the Supplemental Indenture relating to such series of
Subordinated Debt Trust Securities and either (a) the provisions of the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor provided for therein or (b)
upon conversion, exchange, redemption or exercise of any other Security, in
accordance with the terms of such Security or the
<PAGE>
BAKER & BOTTS
L.L.P.
Lyondell Chemical Company - 5 - March 31, 1999
instrument governing such Security providing for such conversion, exchange,
redemption or exercise as approved by the Board, for the consideration approved
by the Board, such Subordinated Debt Trust Securities will constitute legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof is subject to
the effect of (x) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws relating to or affecting creditors' rights generally
and (y) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
7. With respect to a Guarantee to be issued pursuant to the
applicable Guarantee Agreement, when (i) such Guarantee Agreement has been duly
authorized, validly executed and delivered by each of the parties thereto and
(ii) such Guarantee Agreement has been duly qualified under the Trust Indenture
Act of 1939, as amended, such Guarantee will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof is subject to the effect of
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws relating to or affecting creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
The opinions set forth above are limited in all respects to matters of
Delaware corporate law and the contract law of the State of New York as in
effect on the date hereof. We hereby consent to the filing of this opinion of
counsel as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our Firm under the caption "Legal Matters" in each of the
Prospectuses forming a part of the Registration Statement. In giving this
consent, we do not hereby
<PAGE>
BAKER & BOTTS
L.L.P.
Lyondell Chemical Company - 6 - March 31, 1999
admit that we are in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
Baker & Botts LLP
<PAGE>
[Letterhead of Richards, Layton & Finger, P.A.]
March 30, 1999
Lyondell Trust I
c/o Lyondell Chemical Company
1221 McKinney Street
One Houston Center, Suite 1600
Houston, Texas 77010
RE: LYONDELL TRUST I
----------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Lyondell Chemical
Company, a Delaware corporation (the "Company"), and Lyondell Trust I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of July 29, 1998
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on July 29, 1998;
(b) The Declaration of Trust of the Trust, dated as of July 29, 1998,
among the Company and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus (the "Prospectus"),
relating to the Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as proposed to be filed
by the Company, the Trust and others with the Securities and Exchange Commission
on or about March 30, 1999;
<PAGE>
Lyondell Trust I
March 30, 1999
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust
(including Exhibits A, B and C thereto) (the "Declaration"), to be entered into
among the Company, as sponsor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 30,
1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Declaration and the Registration Statement, and (viii) that
First Chicago Delaware Inc. satisfies for the Trust the requirements of Section
3807(a) of the Business Trust Act. We have not participated in the preparation
of the Registration Statement and assume no responsibility for its contents.
<PAGE>
Lyondell Trust I
March 30, 1999
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER, P.A.
BJK
<PAGE>
[Letterhead of Richards, Layton & Finger, P.A.]
March 30, 1999
Lyondell Trust II
c/o Lyondell Chemical Company
1221 McKinney Street
One Houston Center, Suite 1600
Houston, Texas 77010
RE: LYONDELL TRUST II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Lyondell Chemical
Company, a Delaware corporation (the "Company"), and Lyondell Trust II, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 9,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on November 9, 1998;
(b) The Declaration of Trust of the Trust, dated as of November 9,
1998, among the Company and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus (the "Prospectus"),
relating to the Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as proposed to be filed
by the Company, the Trust and others with the Securities and Exchange Commission
on or about March 30, 1999;
<PAGE>
Lyondell Trust II
March 30, 1999
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust
(including Exhibits A, B and C thereto) (the "Declaration"), to be entered into
among the Company, as sponsor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 30,
1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Declaration and the Registration Statement, and (viii) that
First Chicago Delaware Inc. satisfies for the Trust the requirements of Section
3807(a) of the Business Trust Act. We have not participated in the preparation
of the Registration Statement and assume no responsibility for its contents.
<PAGE>
Lyondell Trust II
March 30, 1999
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER, P.A.
BJK
<PAGE>
[Letterhead of Richards, Layton & Finger, P.A.]
March 30, 1999
Lyondell Trust III
c/o Lyondell Chemical Company
1221 McKinney Street
One Houston Center, Suite 1600
Houston, Texas 77010
RE: LYONDELL TRUST III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Lyondell Chemical
Company, a Delaware corporation (the "Company"), and Lyondell Trust III, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November 9,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on November 9, 1998;
(b) The Declaration of Trust of the Trust, dated as of November 9,
1998, among the Company and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus (the "Prospectus"),
relating to the Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as proposed to be filed
by the Company, the Trust and others with the Securities and Exchange Commission
on or about March 30, 1999;
<PAGE>
Lyondell Trust III
March 30, 1999
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust
(including Exhibits A, B and C thereto) (the "Declaration"), to be entered into
among the Company, as sponsor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 30,
1999, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Declaration and the Registration Statement, and (viii) that
First Chicago Delaware Inc. satisfies for the Trust the requirements of Section
3807(a) of the Business Trust Act. We have not participated in the preparation
of the Registration Statement and assume no responsibility for its contents.
<PAGE>
Lyondell Trust III
March 30, 1999
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER, P.A.
BJK
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of this Registration Statement on Form S-3 of our report dated
February 26, 1999 relating to the consolidated financial statements of Lyondell
Chemical Company (formerly Lyondell Petrochemical Company) appearing on page 53
of Lyondell Chemical Company's Annual Report on Form 10-K for the year ended
December 31, 1998, our report dated February 26, 1999 relating to the financial
statements of Equistar Chemicals, LP appearing on page 84 of Lyondell Chemical
Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
our report dated February 6, 1998 relating to the financial statements of
LYONDELL-CITGO Refining LP (formerly LYONDELL-CITGO Refining Company Ltd.)
appearing on page 107 of Lyondell Chemical Company's Annual Report on Form 10-K
for the year ended December 31, 1998. We also consent to the reference to us
under the heading "Experts" in such Prospectuses.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
April 1, 1999
<PAGE>
EXHIBIT 23.1.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-60429 of Lyondell Chemical Company on Form S-3 of
our report dated February 11, 1999, appearing in the Annual Report on Form 10-K
of Lyondell Chemical Company for the year ended December 31, 1998, and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
such Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
April 1, 1999
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
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 FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip code)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
LYONDELL CHEMICAL COMPANY
(Exact name of obligor as specified in its charter)
Delaware 95-4160558
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(Address of principal executive offices) (Zip Code)
JUNIOR SUBORDINATED DEBT SECURITIES
SUBORDINATED DEBT TRUST SECURITIES
GUARANTEE OF PREFERRED SECURITIES OF LYONDELL
TRUST I, LYONDELL TRUST II AND LYONDELL TRUST III
(Title of Indenture Securities)
<PAGE>
Item 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and State of Illinois, on the 30th day of March, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 30, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Lyondell Chemical
Company and The First National Bank of Chicago, the undersigned, in accordance
with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by Federal or
State authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
---------------------------- ------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency ----
and coin(1).................................................... 0081 5,585,982 1.a
b. Interest-bearing balances(2)................................... 0071 4,623,842 1.b
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A)...................................... 1754 0 2.a
b. Available-for-sale securities (from
Schedule RC-B, column D)...................................... 1773 11,181,405 2.b
3. Federal funds sold and securities purchased
under agreements to resell....................................... 1350 9,853,544 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................................... 2122 31,155,998 4.a
b. LESS: Allowance for loan and lease losses..................... 3123 411,963 4.b
c. LESS: Allocated transfer risk reserve......................... 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 30,740,151 4.d
5. Trading assets (from Schedule RD-D).............................. 3545 7,635,778 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 739,925 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 4,827 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)........................ 2130 202,359 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 269,516 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 291,665 10.
11. Other assets (from Schedule RC-F)................................ 2160 3,071,912 11.
12. Total assets (sum of items 1 through 11)......................... 2170 74,200,906 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
----------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of -----
columns A and C from Schedule RC-E, part 1)................ 2200 22,524,140 13.a
(1) Noninterest-bearing(1)................................. 6631 10,141,937 13.a1
(2) Interest-bearing....................................... 6636 12,382,203 13.a2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II)..................... 2200 19,691,237 13.b
(1) Noninterest bearing.................................... 6631 408,126 13.b1
(2) Interest-bearing....................................... 6636 19,283,111 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 9,113,686 14
15. a. Demand notes issued to the U.S. Treasury................... RCON 2840 120,599 15.a
b. Trading Liabilities(from Schedule RC-D).................... RCFD 3548 6,797,927 15.b
RCFD
-----
16. Other borrowed money:
a. With original maturity of one year or less................. 2332 5,385,355 16.a
b. With original maturity of more than one year.............. A547 327,126 16.b
c. With original maturity of more than three years .......... A548 316,411 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....... 2920 269,516 18.
19. Subordinated notes and debentures............................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................ 2930 2,137,443 20.
21. Total liabilities (sum of items 13 through 20)................ 2948 69,083,440 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................. 3838 0 23.
24. Common stock.................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...... 3839 3,201,435 25.
26. a. Undivided profits and capital reserves..................... 3632 1,695,446 26.a
b. Net unrealized holding gains (losses)
on available-for-sale securities........................... 8434 6,349 26.b
27. Cumulative foreign currency translation adjustments........... 3284 13,378 27.
28. Total equity capital (sum of items 23 through 27).............. 3210 5,117,466 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28).............. 3300 74,200,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the --------- Number
bank by independent external auditors as of any date during 1996............... RCFD 6724 | N/A | M.1
---------
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting (may be required by state chartering
firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public
accounting firm which submits a report on the 6 = Compilation of the bank's financial
consolidated holding company (but not on the bank statements by external auditors
separately)
7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank preparation work)
conducted in accordance with generally accepted
auditing standards by a certified public accounting 8 = No external audit work
firm (may be required by state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
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 FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. employer
identification number)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(Address of principal executive offices) (Zip code)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
LYONDELL TRUST I
(Exact name of obligor as specified in its charter)
Delaware application pending
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
One Houston Center, Suite 1600
1221 McKinney Street
Houston, Texas 77010
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
ITEM 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and State of Illinois, on the 30th day of March, 1999.
The First National Bank of Chicago,
Trustee
By /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 30, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Lyondell Trust I
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
---------------------------- ------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency ----
and coin(1).................................................... 0081 5,585,982 1.a
b. Interest-bearing balances(2)................................... 0071 4,623,842 1.b
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A)...................................... 1754 0 2.a
b. Available-for-sale securities (from
Schedule RC-B, column D)...................................... 1773 11,181,405 2.b
3. Federal funds sold and securities purchased
under agreements to resell....................................... 1350 9,853,544 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................................... 2122 31,155,998 4.a
b. LESS: Allowance for loan and lease losses..................... 3123 411,963 4.b
c. LESS: Allocated transfer risk reserve......................... 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 30,740,151 4.d
5. Trading assets (from Schedule RD-D).............................. 3545 7,635,778 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 739,925 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 4,827 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)........................ 2130 202,359 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 269,516 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 291,665 10.
11. Other assets (from Schedule RC-F)................................ 2160 3,071,912 11.
12. Total assets (sum of items 1 through 11)......................... 2170 74,200,906 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
----------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of -----
columns A and C from Schedule RC-E, part 1)................ 2200 22,524,140 13.a
(1) Noninterest-bearing(1)................................. 6631 10,141,937 13.a1
(2) Interest-bearing....................................... 6636 12,382,203 13.a2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II)..................... 2200 19,691,237 13.b
(1) Noninterest bearing.................................... 6631 408,126 13.b1
(2) Interest-bearing....................................... 6636 19,283,111 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 9,113,686 14
15. a. Demand notes issued to the U.S. Treasury................... RCON 2840 120,599 15.a
b. Trading Liabilities(from Schedule RC-D).................... RCFD 3548 6,797,927 15.b
RCFD
-----
16. Other borrowed money:
a. With original maturity of one year or less................. 2332 5,385,355 16.a
b. With original maturity of more than one year.............. A547 327,126 16.b
c. With original maturity of more than three years .......... A548 316,411 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....... 2920 269,516 18.
19. Subordinated notes and debentures............................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................ 2930 2,137,443 20.
21. Total liabilities (sum of items 13 through 20)................ 2948 69,083,440 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................. 3838 0 23.
24. Common stock.................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...... 3839 3,201,435 25.
26. a. Undivided profits and capital reserves..................... 3632 1,695,446 26.a
b. Net unrealized holding gains (losses)
on available-for-sale securities........................... 8434 6,349 26.b
27. Cumulative foreign currency translation adjustments........... 3284 13,378 27.
28. Total equity capital (sum of items 23 through 27).............. 3210 5,117,466 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28).............. 3300 74,200,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the --------- Number
bank by independent external auditors as of any date during 1996............... RCFD 6724 | N/A | M.1
---------
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting (may be required by state chartering
firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public
accounting firm which submits a report on the 6 = Compilation of the bank's financial
consolidated holding company (but not on the bank statements by external auditors
separately)
7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank preparation work)
conducted in accordance with generally accepted
auditing standards by a certified public accounting 8 = No external audit work
firm (may be required by state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
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 FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS
CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
LYONDELL TRUST II
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE APPLICATION PENDING
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE HOUSTON CENTER, SUITE 1600
1221 MCKINNEY STREET
HOUSTON, TEXAS 77010
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 30th day of March, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
VICE PRESIDENT
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 30, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Lyondell Trust II
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
VERY TRULY YOURS,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ SANDRA L. CARUBA
SANDRA L. CARUBA
VICE PRESIDENT
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
---------------------------- ------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency ----
and coin(1).................................................... 0081 5,585,982 1.a
b. Interest-bearing balances(2)................................... 0071 4,623,842 1.b
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A)...................................... 1754 0 2.a
b. Available-for-sale securities (from
Schedule RC-B, column D)...................................... 1773 11,181,405 2.b
3. Federal funds sold and securities purchased
under agreements to resell....................................... 1350 9,853,544 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................................... 2122 31,155,998 4.a
b. LESS: Allowance for loan and lease losses..................... 3123 411,963 4.b
c. LESS: Allocated transfer risk reserve......................... 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 30,740,151 4.d
5. Trading assets (from Schedule RD-D).............................. 3545 7,635,778 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 739,925 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 4,827 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)........................ 2130 202,359 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 269,516 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 291,665 10.
11. Other assets (from Schedule RC-F)................................ 2160 3,071,912 11.
12. Total assets (sum of items 1 through 11)......................... 2170 74,200,906 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
----------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of -----
columns A and C from Schedule RC-E, part 1)................ 2200 22,524,140 13.a
(1) Noninterest-bearing(1)................................. 6631 10,141,937 13.a1
(2) Interest-bearing....................................... 6636 12,382,203 13.a2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II)..................... 2200 19,691,237 13.b
(1) Noninterest bearing.................................... 6631 408,126 13.b1
(2) Interest-bearing....................................... 6636 19,283,111 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 9,113,686 14
15. a. Demand notes issued to the U.S. Treasury................... RCON 2840 120,599 15.a
b. Trading Liabilities(from Schedule RC-D).................... RCFD 3548 6,797,927 15.b
RCFD
-----
16. Other borrowed money:
a. With original maturity of one year or less................. 2332 5,385,355 16.a
b. With original maturity of more than one year.............. A547 327,126 16.b
c. With original maturity of more than three years .......... A548 316,411 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....... 2920 269,516 18.
19. Subordinated notes and debentures............................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................ 2930 2,137,443 20.
21. Total liabilities (sum of items 13 through 20)................ 2948 69,083,440 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................. 3838 0 23.
24. Common stock.................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...... 3839 3,201,435 25.
26. a. Undivided profits and capital reserves..................... 3632 1,695,446 26.a
b. Net unrealized holding gains (losses)
on available-for-sale securities........................... 8434 6,349 26.b
27. Cumulative foreign currency translation adjustments........... 3284 13,378 27.
28. Total equity capital (sum of items 23 through 27).............. 3210 5,117,466 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28).............. 3300 74,200,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the --------- Number
bank by independent external auditors as of any date during 1996............... RCFD 6724 | N/A | M.1
---------
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting (may be required by state chartering
firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public
accounting firm which submits a report on the 6 = Compilation of the bank's financial
consolidated holding company (but not on the bank statements by external auditors
separately)
7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank preparation work)
conducted in accordance with generally accepted
auditing standards by a certified public accounting 8 = No external audit work
firm (may be required by state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
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 FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
One First National Plaza, Chicago, Illinois 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------------
LYONDELL TRUST III
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
Delaware application pending
(State or other jurisdiction of (I.R.S. employer
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
One Houston Center, Suite 1600
1221 MCKINNEY STREET
HOUSTON, TEXAS 77010
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
ITEM 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.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 30th day of March, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 30, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Lyondell Trust III
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Sandra L. Caruba
SANDRA L. CARUBA
VICE PRESIDENT
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
---------------------------- ------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency ----
and coin(1).................................................... 0081 5,585,982 1.a
b. Interest-bearing balances(2)................................... 0071 4,623,842 1.b
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A)...................................... 1754 0 2.a
b. Available-for-sale securities (from
Schedule RC-B, column D)...................................... 1773 11,181,405 2.b
3. Federal funds sold and securities purchased
under agreements to resell....................................... 1350 9,853,544 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................................... 2122 31,155,998 4.a
b. LESS: Allowance for loan and lease losses..................... 3123 411,963 4.b
c. LESS: Allocated transfer risk reserve......................... 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......................... 2125 30,740,151 4.d
5. Trading assets (from Schedule RD-D).............................. 3545 7,635,778 5.
6. Premises and fixed assets (including capitalized leases)......... 2145 739,925 6.
7. Other real estate owned (from Schedule RC-M)..................... 2150 4,827 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)........................ 2130 202,359 8.
9. Customers' liability to this bank on acceptances outstanding..... 2155 269,516 9.
10. Intangible assets (from Schedule RC-M)........................... 2143 291,665 10.
11. Other assets (from Schedule RC-F)................................ 2160 3,071,912 11.
12. Total assets (sum of items 1 through 11)......................... 2170 74,200,906 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
----------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of -----
columns A and C from Schedule RC-E, part 1)................ 2200 22,524,140 13.a
(1) Noninterest-bearing(1)................................. 6631 10,141,937 13.a1
(2) Interest-bearing....................................... 6636 12,382,203 13.a2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II)..................... 2200 19,691,237 13.b
(1) Noninterest bearing.................................... 6631 408,126 13.b1
(2) Interest-bearing....................................... 6636 19,283,111 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 9,113,686 14
15. a. Demand notes issued to the U.S. Treasury................... RCON 2840 120,599 15.a
b. Trading Liabilities(from Schedule RC-D).................... RCFD 3548 6,797,927 15.b
RCFD
-----
16. Other borrowed money:
a. With original maturity of one year or less................. 2332 5,385,355 16.a
b. With original maturity of more than one year.............. A547 327,126 16.b
c. With original maturity of more than three years .......... A548 316,411 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....... 2920 269,516 18.
19. Subordinated notes and debentures............................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................ 2930 2,137,443 20.
21. Total liabilities (sum of items 13 through 20)................ 2948 69,083,440 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................. 3838 0 23.
24. Common stock.................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...... 3839 3,201,435 25.
26. a. Undivided profits and capital reserves..................... 3632 1,695,446 26.a
b. Net unrealized holding gains (losses)
on available-for-sale securities........................... 8434 6,349 26.b
27. Cumulative foreign currency translation adjustments........... 3284 13,378 27.
28. Total equity capital (sum of items 23 through 27).............. 3210 5,117,466 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28).............. 3300 74,200,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the --------- Number
bank by independent external auditors as of any date during 1996............... RCFD 6724 | N/A | M.1
---------
1 = Independent audit of the bank conducted in 4. = Directors' examination of the bank
accordance with generally accepted auditing performed by other external auditors
standards by a certified public accounting (may be required by state chartering
firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding 5 = Review of the bank's financial statements
company conducted in accordance with generally by external auditors
accepted auditing standards by a certified public
accounting firm which submits a report on the 6 = Compilation of the bank's financial
consolidated holding company (but not on the bank statements by external auditors
separately)
7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank preparation work)
conducted in accordance with generally accepted
auditing standards by a certified public accounting 8 = No external audit work
firm (may be required by state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
