<PAGE>
As filed with the Securities and Exchange Commission on June 29, 1999
Registration No. 333-
333-
333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
LYONDELL CHEMICAL COMPANY
LYONDELL CHEMICAL WORLDWIDE, INC.
LYONDELL CHEMICAL NEDERLAND, LTD.
(Exact name of each co-registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 2911 95-4160558
Delaware 2911 51-0104393
Delaware 2911 51-0110124
(State or other jurisdiction (Primary Standard Industrial Classification Code (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
</TABLE>
Robert J. Millstone
Vice President and General Counsel
1221 McKinney Street, Suite 700 1221 McKinney Street, Suite 700
Houston, Texas 77010 Houston, Texas 77010
(713) 652-7200 (713) 652-7200
(Address, including zip code, and (Name, address, including zip code, and
telephone number, telephone number,
including area code, of each co- including area code, of agent for service
registrant's principal for each co-registrant)
executive offices)
Copy to:
Stephen A. Massad
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002
(713) 229-1234
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable following the effectiveness of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
under Rule 462(b) pursuant to the Securities Act of 1933, as amended (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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [_]
----------------
Calculation of Registration Fee
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<TABLE>
<CAPTION>
Proposed maximum Proposed
Title of each class of securities Amount to offering price maximum aggregate Amount of
to be registered be registered per note (a) offering price (a) registration fee (b)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 5/8% Senior Secured Notes, Series A,
due 2007............................... $ 900,000,000 100% $ 900,000,000 $250,200
9 7/8% Senior Secured Notes, Series B,
due 2007............................... $1,000,000,000 100% $1,000,000,000 $278,000
10 7/8% Senior Subordinated Notes due
2009................................... $ 500,000,000 100% $ 500,000,000 $139,000
Guarantees of 9 5/8% Senior Secured
Notes, Series A, due 2007.............. -- -- -- --
Guarantees of 9 7/8% Senior Secured
Notes, Series B, due 2007.............. -- -- -- --
Guarantees of 10 7/8% Senior Subordi-
nated Notes due 2009................... -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
TOTAL................................. $2,400,000,000 $2,400,000,000 $667,000
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
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(a) Estimated solely for the purpose of calculating the registration fee under
Rule 457(f) pursuant to the Securities Act.
(b) Pursuant to Rule 457(n) of the Securities Act, no separate registration fee
is payable for the guarantees.
The co-registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the co-registrants
will file a further amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the Registration Statement will become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS Subject to completion, dated June 29, 1999
Lyondell Chemical Company
$2,400,000,000
Offers to Exchange
$900,000,000 9 5/8% Outstanding for $900,000,000 9 5/8% Registered
Senior Secured Notes, Series A, due Senior Secured Notes, Series A,
2007 due 2007
$1,000,000,000 9 7/8% Outstanding for $1,000,000,000 9 7/8% Registered
Senior Secured Notes, Series B, due Senior Secured Notes, Series B,
2007 due 2007
$500,000,000 10 7/8% Outstanding for $500,000,000 10 7/8% Registered
Senior Subordinated Notes due 2009 Senior Subordinated Notes due 2009
The new notes:
. will be freely tradeable and registered under the Securities Act of 1933
. are otherwise substantially identical to the outstanding notes
. will accrue interest at the same rate per annum as the outstanding notes
payable semi-annually in arrears on each May 1 and November 1, beginning
November 1, 1999
. will rank equally with the outstanding notes that are not exchanged
. will not be listed on any securities exchange or on any automated dealer
quotation system
. are guaranteed by our subsidiaries Lyondell Worldwide and Lyondell Nederland
The exchange offers:
. expire at 5:00 p.m., New York City time, on , 1999,
unless extended or sooner terminated
. are not conditioned on any minimum aggregate principal amount of outstanding
notes being tendered
In addition, you should note that:
. all outstanding notes that are validly tendered and not validly withdrawn
will be exchanged for an equal principal amount of new notes that are
registered under the Securities Act of 1933
. tenders of outstanding notes may be withdrawn any time before the expiration
of the exchange offers
. the exchange of outstanding notes for new notes in the exchange offers will
not be a taxable event for U.S. federal income tax purposes
You should consider carefully the risk factors beginning on page 14 of this
prospectus before participating in the exchange offers.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the new notes or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 14
Cautionary Statements.................................................... 29
Forward-Looking Information.............................................. 29
The Exchange Offers...................................................... 29
Use of Proceeds.......................................................... 40
Capitalization........................................................... 41
Unaudited Pro Forma Financial Statements................................. 42
Selected Historical Financial Data....................................... 49
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 52
Business................................................................. 62
Description of Other Indebtedness........................................ 70
Description of New Notes................................................. 73
United States Federal Income Tax Considerations.......................... 121
Registration Rights Agreement............................................ 121
Book-entry; Delivery and Form............................................ 124
Plan of Distribution..................................................... 127
Legal Matters............................................................ 128
Experts.................................................................. 128
Where You Can Find More Information...................................... 129
Incorporation by Reference............................................... 129
</TABLE>
<PAGE>
Prospectus Summary
This summary highlights information from this prospectus. It is not complete
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the exchange offers, information about
our business and detailed financial data. We encourage you to read the detailed
information and financial statements and related notes appearing elsewhere in
this prospectus in their entirety. Pro forma disclosures assume that Lyondell
Chemical Worldwide, Inc., formerly ARCO Chemical Company, was acquired on
January 1, 1998.
Summary of the Exchange Offers
On May 17, 1999, we completed the private offering of the outstanding notes.
In connection with the private offering, we entered into a registration rights
agreement with the initial purchasers in the private offering. In this
agreement, we agreed to deliver this prospectus to you and to use our best
efforts to complete the exchange offers within 210 days after the date we
issued the outstanding notes. You are entitled to exchange your outstanding
notes for new notes that are registered with the SEC and are freely tradeable.
You should read the discussion under the headings "--Summary of Terms of the
New Notes" beginning on page 10 and "Description of New Notes" beginning on
page 73 for further information regarding the new notes.
We summarize the terms of the exchange offers below. You should read the
discussion under the heading "The Exchange Offers" beginning on page 29 for
further information regarding the exchange offers and resale of the new notes.
The Exchange Offers......... We are offering to issue to you in separate
exchange offers:
. registered 9 5/8% Senior Secured Notes, Series
A, due 2007 in exchange for your outstanding
unregistered 9 5/8% Senior Secured Notes,
Series A, due 2007;
. registered 9 7/8% Senior Secured Notes, Series
B, due 2007 in exchange for your outstanding
unregistered 9 7/8% Senior Secured Notes,
Series B, due 2007; and
. registered 10 7/8% Senior Subordinated Notes
due 2009 in exchange for your outstanding
unregistered 10 7/8% Senior Subordinated Notes
due 2009
in exchange for a like kind and principal amount
of outstanding notes properly tendered to us by
you.
Expiration Date............. Unless sooner terminated, the exchange offers
expire at 5:00 p.m., New York City time, on
, 1999, or at a later date and time to
which we extend them. We may choose to extend one
or more of the exchange offers without extending
the others.
Withdrawal of Tenders....... You may withdraw the tender of your outstanding
notes at any time before the expiration date of
the applicable exchange offer.
Conditions to the Exchange We will not be required to accept outstanding
Offers..................... notes for exchange if the exchange offers would
violate applicable law or if any legal action has
been instituted or threatened that would impair
our ability to proceed with the exchange offers.
We will not be required to exchange the
outstanding notes of any holder that does not
make specific representations to us. The exchange
offers are not conditioned on each other or on
any minimum aggregate principal amount of
outstanding notes being tendered.
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<PAGE>
Procedures for Tendering
Outstanding Notes..........
If you wish to participate in an exchange offer,
you must complete, sign and date the letter of
transmittal and fax, mail or deliver the letter
of transmittal, together with the outstanding
notes, to the exchange agent. If your outstanding
notes are held through The Depository Trust
Company (DTC), you may deliver your outstanding
notes by book-entry transfer.
In the alternative, if your outstanding notes are
held through the DTC and you wish to participate
in an exchange offer, you may do so instead
through the automated tender offer program of the
DTC. If you tender under this program, you will
agree to be bound by the letter of transmittal
that we are providing with this prospectus as
though you had actually signed the letter of
transmittal.
By signing or agreeing to be bound by the letter
of transmittal, you will represent to us, among
other things, that:
. any new notes you receive will be acquired in
the ordinary course of your business;
. you have no arrangement or understanding with
any person or entity to participate in the
distribution of the new notes;
. if you are not a broker-dealer, you are not
engaged in and do not intend to participate in
the distribution of the new notes;
. if you are a broker-dealer that will receive
new notes for your own account in exchange for
outstanding notes that were acquired as a
result of market-making activities, you will
deliver a prospectus, as required by law, in
connection with any resale of those new notes;
. you are not our "affiliate," as defined in Rule
405 of the Securities Act; and
. if you are our affiliate, you will comply with
any applicable registration and prospectus
delivery requirements of the Securities Act.
Special Procedures for
Beneficial Owners..........
If you beneficially own outstanding notes
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your outstanding notes in
an exchange offer, you should promptly contact
the registered holder and instruct it to tender
the outstanding notes on your behalf.
If you wish to tender your outstanding notes on
your own behalf, you must either arrange to have
your outstanding notes registered in your name or
obtain a properly completed bond power from the
registered holder prior to completing and
executing the letter of transmittal and
delivering your outstanding notes. The transfer
of registered ownership may take considerable
time.
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<PAGE>
Guaranteed Delivery If you wish to tender your outstanding notes and
Procedures................. cannot comply with the requirement to deliver the
letter of transmittal and your outstanding notes
or use the automated tender offer program of the
DTC before the expiration date, you must tender
your outstanding notes according to the
guaranteed delivery procedures described in "The
Exchange Offers--Guaranteed Delivery Procedures"
beginning on page 37.
U.S. Federal Income Tax
Considerations.............
The exchange of outstanding notes for new notes
in the exchange offers will not be a taxable
event for U.S. federal income tax purposes.
Use of Proceeds............. We will not receive any cash proceeds from the
issuance of the new notes.
Plan of Distribution........ All broker dealers who receive new notes in the
exchange offers have a prospectus delivery
obligation.
Broker-dealers who acquired the outstanding notes
as a result of market-making or other trading
activities may use this exchange offer
prospectus, as supplemented or amended, in
connection with the resales of the new notes.
Broker-dealers who acquired the outstanding notes
from Lyondell must comply with the registration
and prospectus delivery requirements of the
Securities Act, including being named as selling
noteholders, in order to resell the outstanding
notes or the new notes.
Consequences of Failure to
Exchange Outstanding
Notes...................... If you do not tender your outstanding notes, you
will continue to hold notes subject to the
existing transfer restrictions. Following
completion of the exchange offers, the liquidity
of the market for your outstanding notes could be
adversely affected. In most cases, we will have
no obligation to register the outstanding notes
once we complete the exchange offers.
3
<PAGE>
The Exchange Agent
We have appointed The Bank of New York as exchange agent for each of the
exchange offers. You should direct questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for the notice of guaranteed delivery to the exchange
agent addressed as follows:
For Delivery by Mail: For Overnight Delivery Only or by Hand:
The Bank of New York The Bank of New York
21 West 21 West
101 Barclay St., Floor 7E 101 Barclay St.
New York, NY 10286 Corporate Trust Services Window
Attn: Reorg. Dept. Ground Level
New York, NY 10286
Attn: Reorg. Dept.
By Facsimile Transmission (for eligible institutions only):
(212) 815-4699
Attn:
To Confirm Receipt:
(212) 815-2742
About Lyondell
Lyondell Chemical Company is a global chemical company with leading market
positions in all of its major products, world-scale production capacity and low
cost operations. Lyondell has advantages in the supply of raw materials through
its equity ownerships in its three joint ventures Equistar Chemicals, LP,
LYONDELL-CITGO Refining LP and Lyondell Methanol Company, L.P. Ownership in
these joint ventures enhances Lyondell's operating leverage and, together with
Lyondell's core business of less cyclical chemical products, mitigates the
impact of petrochemical and refining cycles affecting its joint ventures.
Lyondell's operations are comprised of four businesses: intermediate
chemicals and derivatives, petrochemicals and polymers, refining and methanol.
Intermediate Chemicals and Derivatives (Lyondell Worldwide)
Lyondell is the world's largest producer of propylene oxide (PO) and a
leading worldwide producer and marketer of PO derivatives, including polyether
polyols, propylene glycol, propylene glycol ethers and butanediol. PO is a key
component in the manufacture of urethanes and nonurethane products. Lyondell is
the world's second largest supplier of toluene diisocyanate (TDI), another key
component of urethanes. End uses for Lyondell's PO and its derivatives include:
. flexible foam for automotive seating and furniture;
. antifreeze and coolants;
. personal care products;
4
<PAGE>
. coatings, adhesives, sealants and elastomers;
. resins; and
. solvents.
Lyondell is also a major producer of styrene monomer and tertiary butyl
alcohol (TBA), co-products of its proprietary PO technology. Styrene monomer is
used to produce plastics and resins including polystyrene, used in household
goods such as disposable food service items and toys, and expandable
polystyrene, used in foam cups and containers, insulation and packaging.
Lyondell currently utilizes most of its TBA to make methyl tertiary butyl ether
(MTBE), a gasoline blending component used to reduce fuel emissions and enhance
octane. The intermediate chemicals and derivatives business is the only
business conducted through wholly owned Lyondell operations.
Petrochemicals and Polymers (Equistar)
Lyondell owns 41% of Equistar, which is an integrated, low-cost producer of
petrochemicals and polymers. Equistar is North America's largest producer of
ethylene, propylene and polyethylene and third largest producer of ethylene
oxide. End uses for its products consist of a wide range of consumer and
industrial products including:
. packaging film;
. trash bags;
. plastic bottles;
. plastic caps and other closures;
. rigid packaging; and
. carpet facing and backing.
Equistar was formed in December 1997 by combining the ethylene, propylene,
aromatics and polymers businesses of Lyondell and Millennium Chemicals Inc.
Equistar was expanded in May 1998 with the addition of the olefins, ethylene
oxide and derivatives businesses of Occidental Chemical Corporation. Dan Smith,
the chief executive officer of Lyondell, also serves as the chief executive
officer of Equistar.
Refining
Lyondell owns 58.75% of LYONDELL-CITGO Refining, which owns and operates
North America's largest extra heavy crude oil refinery, processing low cost
17(degrees) API crude oil. LYONDELL-CITGO Refining processes large volumes of
this extra heavy crude oil into premium petroleum products including:
. gasoline;
. low sulfur diesel;
. jet fuel;
. aromatics;
. lube oils; and
. other refined products.
5
<PAGE>
LYONDELL-CITGO Refining has a long-term crude oil supply agreement with
Petroleos de Venezuela, S.A. (PDVSA), the national oil company of Venezuela.
This agreement helps to stabilize earnings and cash flow through an
advantageous pricing formula. LYONDELL-CITGO Refining was formed in 1993 as a
joint venture with CITGO Petroleum Corporation, an indirect wholly owned
subsidiary of PDVSA.
Methanol (Lyondell Methanol)
Lyondell owns 75% of Lyondell Methanol, the third largest producer of
methanol in the United States. Lyondell Methanol was formed in December 1996 by
Lyondell and MCN Investment Corporation, a producer of natural gas, the primary
raw material for methanol.
Refinancing of Credit Facility
In May 1999, Lyondell completed a partial refinancing of the debt under its
credit facility. The refinancing reduced consolidated debt by approximately
$630 million and eliminated substantially all debt maturities through year end
2000 by refinancing with longer-term debt. The refinancing consisted of:
. the issuance of the outstanding notes for gross proceeds of $2.4 billion;
. the borrowing of an additional $1 billion under two new term loans under
the credit facility; and
. the issuance of 40.25 million shares of Lyondell common stock for gross
proceeds of $765 million.
6
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The following chart shows the organization of Lyondell.
[CHART APPEARS HERE]
7
<PAGE>
Lyondell's Strategy
Lyondell's mission is to maximize total return to its stockholders and
increase cash flow through growth, improved profitability and reduced earnings
volatility.
Lyondell has been a leader in the ongoing restructuring of the chemical
industry, taking a series of steps to reposition its business portfolio over
the past several years. The following is a list of major actions Lyondell has
taken to fulfill this strategy:
<TABLE>
<C> <C> <S>
1993 -- Formation of LYONDELL-CITGO Refining
1995 -- Acquisition of Alathon(TM) high density polyethylene business
1996 -- Formation of Lyondell Methanol
1997 -- Completion of $1.1 billion LYONDELL-CITGO Refining upgrade project
1997 -- Creation of Equistar
1998 -- Expansion of Equistar with the addition of the Occidental assets
1998 -- Acquisition of ARCO Chemical Company
</TABLE>
Lyondell will continue to identify and evaluate opportunities for strategic
business combinations, including partnership arrangements such as Equistar and
LYONDELL-CITGO Refining, as a means to provide profitable growth and further
enhance Lyondell's competitive positions. Lyondell actively seeks opportunities
to maximize efficiency or value through various transactions, including the
purchase or sale of assets, contractual arrangements or joint ventures. To the
extent permitted under the terms of Lyondell's credit facility and other debt
agreements, some of these transactions may be financed by additional borrowings
or by the issuance of Lyondell common stock.
Building on Leading Market Positions and Technologies to Achieve Profitable
Growth
Lyondell intends to build on its leading market positions and technologies
to achieve consistent profitable growth. Today, Lyondell and Equistar hold
leading market positions in the majority of their primary products, as shown
below.
<TABLE>
<CAPTION>
North American
Market Global
Product Position Market Position
- ------- -------------- ---------------
<S> <C> <C>
Lyondell:
PO............................................. 1 1
Urethanes:
Polyols...................................... 2 2
TDI.......................................... 2 2
Equistar:
Ethylene....................................... 1 2
Propylene...................................... 1 3
Polyethylene................................... 1 4
</TABLE>
Lyondell intends to increase sales by creating new markets for its products
through focused technological innovation and the development of higher value
products that create additional uses for Lyondell's primary products. To
achieve this goal, Lyondell is undertaking the following initiatives:
. participating in anticipated global demand growth in urethanes and
performance chemicals by using Lyondell's strengths in technology,
manufacturing, marketing and access to raw materials;
. taking advantage of additional opportunities derived from Equistar's
North American market leadership and low cost position in ethylene,
propylene and polyethylene;
8
<PAGE>
. strategically expanding Equistar's polymers technology and capacity by
focusing on higher value products with large market demand potential,
such as medium and high molecular weight high density polyethylene; and
. continuing to exploit LYONDELL-CITGO Refining's $1.1 billion refinery
upgrade by increasing the total processing volume of extra heavy, low
cost crude oil and producing a higher percentage of higher value
products. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Results of Operations--First Quarter
1999 Compared to Fourth Quarter 1998--Refining."
Improving Profitability and Reducing Earnings Volatility
Lyondell's current business portfolio is strategically positioned to provide
opportunities to improve profitability and reduce earnings cyclicality. In
addition, Lyondell intends to continue its ongoing cost reduction initiatives
to maximize efficiency of its operations.
Lyondell continues to integrate its businesses:
. by capitalizing on its advantages in the supply of raw materials between
Lyondell and Equistar and Equistar and LYONDELL-CITGO Refining in order
to capture profit margins across a wide range of products and to improve
stability of production volumes and earnings throughout Lyondell; and
. through increasing Equistar product sales and improving its marketing
efforts using the global expertise and market presence of Lyondell.
Lyondell continues its efforts to reduce costs:
. by completing the cost reduction programs in place at Lyondell, Equistar
and LYONDELL-CITGO Refining;
. through realizing identified cost savings and revenue enhancements across
Lyondell's business portfolio by optimizing manufacturing operations,
using more efficient purchase and distribution practices and reducing
overhead and staffing; and
. by maximizing value from the strategic flexibility and optimization
potential inherent in Equistar's large number of plant sites, raw
material flexibility and broad polymers product slate.
Debt Reduction and Refinancing Initiatives
Lyondell significantly increased its borrowed funds in 1998 to acquire
Lyondell Worldwide. The decision to take advantage of this acquisition
opportunity did not alter management's view of an optimal long-term capital
structure which calls for a lower debt-to-equity ratio and an investment grade
debt rating. Lyondell is looking to the cash flow of its businesses, potential
joint ventures involving strategic assets, new equity capital, working capital
initiatives, potential asset sales, refinancing plans and other cash generating
opportunities to achieve this goal.
Management believes that Lyondell is well positioned through its leading
market positions, world-scale production capacity and low cost operations to
continue to satisfy its ongoing cash requirements through its share of cash
distributions from both Equistar and LYONDELL-CITGO Refining and cash flow from
its intermediate chemicals and derivatives business. This positioning should
also generate significant additional cash flow when prices for some of
Lyondell's cyclical products emerge from their current troughs.
9
<PAGE>
Summary of Terms of the New Notes
Unlike the outstanding notes, the new notes will be registered under the
Securities Act and freely tradeable and will not have registration rights.
Otherwise, the new notes are substantially identical to the outstanding notes.
The new notes will evidence the same debt as the outstanding notes, and the
outstanding notes and the new notes will be governed by the same indentures.
Securities Offered.......... $900 million principal amount of registered 9
5/8% Senior Secured Notes, Series A, due 2007.
$1.0 billion principal amount of registered 9
7/8% Senior Secured Notes, Series B, due 2007.
$500 million principal amount of registered 10
7/8% Senior Subordinated Notes due 2009.
Maturity Dates.............. The Series A Senior Secured Notes and the Series
B Senior Secured Notes mature on May 1, 2007.
The Senior Subordinated Notes mature on May 1,
2009.
Interest Payment Dates...... Interest payments for the new notes will be made
semi-annually on each May 1 and November 1,
beginning November 1, 1999.
Optional Redemption......... We may redeem any of the Series A Senior Secured
Notes at any time at a redemption price equal to
a "make-whole" price, which we describe in more
detail beginning on page 80.
We may redeem any of the Series B Senior Secured
Notes at any time on or after May 1, 2004 at the
redemption prices described on page 81.
We may redeem any of the Senior Subordinated
Notes at any time on or after May 1, 2004 at the
redemption prices described on page 82.
On or before May 1, 2002, we may redeem up to 35%
of the Senior Subordinated Notes with the
proceeds of common stock offerings at a
redemption price equal to 110.875% of the
principal amount of the notes redeemed.
Change of Control........... Upon the occurrence of the change of control
events described beginning on page 82, you may
require us to repurchase some or all of your new
notes at 101% of their principal amount, plus
accrued interest. The occurrence of those change
of control events may, however, be an event of
default under our credit facility. We cannot
assure you that we will have sufficient resources
to repurchase your new notes in these
circumstances.
Subsidiary Guarantees....... The new notes will be unconditionally guaranteed
by our subsidiaries Lyondell Worldwide and
Lyondell Nederland. The guarantees of the Senior
Secured Notes will be general obligations of each
guarantor and will rank equally with all existing
and future
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<PAGE>
unsubordinated debt of each guarantor. The
guarantees of the Senior Subordinated Notes will
be general obligations of each guarantor and will
rank junior to all existing and future
unsubordinated debt of each guarantor, including
the guarantees of the Senior Secured Notes.
Security.................... The Senior Secured Notes will be secured by a
lien equally and ratably with all debt
outstanding under our credit facility and, with
respect to some of our manufacturing plants, some
Lyondell Worldwide bonds as well. The liens will
constitute first-priority liens, subject to
exceptions and permitted liens, on the following:
. Lyondell's and Lyondell Worldwide's personal
property;
. substantially all the stock of the domestic
subsidiaries directly owned by Lyondell and
Lyondell Worldwide;
. 65% of the stock of foreign subsidiaries
directly owned by Lyondell and Lyondell
Worldwide;
. the rights of some of Lyondell's subsidiaries
to receive distributions from Lyondell's
existing joint ventures in which they own
equity interests; and
. mortgages on Lyondell Worldwide's facilities
located in Bayport, Texas, Channelview, Texas
and Lake Charles, Louisiana.
The Senior Secured Notes could become unsecured.
Any lien for the benefit of the holders of the
Senior Secured Notes will be automatically
released, without the consent of the holders,
upon a release of that lien under the terms of
the security documents or if the release is
approved by the requisite lenders under our
credit facility. In addition, the collateral
agent and Lyondell may amend the provisions of
the security documents with the consent of the
requisite lenders and without the consent of the
holders of the Senior Secured Notes. The lenders
under the existing credit facility will have the
sole ability to control remedies with respect to
the collateral, including any sale or liquidation
after acceleration of the new notes or the debt
under the credit facility.
Ranking..................... The Senior Secured Notes will rank equally with
all our existing and future unsecured senior debt
and before all such debt to the extent of the
value of the collateral available to the holders
of the Senior Secured Notes. This collateral is
shared by the holders of the new notes on a
ratable basis with the holders of Lyondell's
other senior secured debt, including the debt
under the credit facility and some debt of
Lyondell Worldwide.
The Senior Subordinated Notes will rank junior to
all our existing and future unsubordinated debt,
including the Senior Secured Notes, the debt
under our credit facility and some debt of
Lyondell Worldwide.
The new notes will also effectively rank junior
to all liabilities of our subsidiaries that have
not guaranteed the new notes and all liabilities
of our joint ventures.
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<PAGE>
The new notes will rank equal in right of payment
with any outstanding notes that are not
exchanged.
At May 31, 1999:
. Lyondell and the guarantors had outstanding
approximately $5.8 billion of unsubordinated
debt that was secured, including the Senior
Secured Notes; and
. Lyondell's joint ventures, which have not
guaranteed the new notes, had approximately
$4.0 billion of outstanding liabilities,
including trade payables, that are effectively
senior to the new notes.
Restrictive Covenants....... The new notes will be issued under the same
indentures as the outstanding notes. The
indentures contain restrictive covenants for your
benefit that restrict our ability, and the
ability of our subsidiaries, to:
. incur additional debt or issue subsidiary
preferred stock;
. increase dividends on our capital stock;
. redeem or repurchase capital stock or
repurchase subordinated debt;
. engage in transactions with affiliates, except
on an arms-length basis;
. create liens or engage in sale and leaseback
transactions;
. make some types of investments and sell assets;
and
. consolidate or merge with, or sell
substantially all our assets to, another
person.
Some of these covenants will no longer apply if
the new notes are rated "BBB-" by Standard &
Poor's or "Baa3" by Moody's, even if the new
notes are subsequently downgraded to a lower
rating.
Form of New Notes........... The new notes will be represented by one or more
permanent global securities deposited with the
DTC. You will not receive certificates for your
new notes unless one of the events described
under the heading "Book-Entry; Delivery and
Form--Certificated Notes" on page 124 occurs.
Instead, beneficial ownership interests in the
new notes will be shown on the book-entry records
maintained by the DTC. Transfers of beneficial
ownership of the new notes will be effected only
through the book-entry records maintained by the
DTC.
Liquidated Damages.......... If we fail to complete the exchange offers as
required by the registration rights agreement, we
will be obligated to pay liquidated damages to
holders of the outstanding notes as described on
page 123.
Use of Proceeds............. We will not receive any cash proceeds from the
issuance of the new notes.
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Risk Factors
Please read and carefully consider the "Risk Factors" beginning on page 14
before participating in the exchange offers.
Principal Executive Offices
The principal executive offices for Lyondell, Lyondell Worldwide and
Lyondell Nederland are located at 1221 McKinney Street, Suite 700, Houston,
Texas 77010, and our telephone number is (713) 652-7200.
Selected Historical Financial Data and Unaudited Pro Forma
Financial Statements
Please read "Selected Historical Financial Data" beginning on page 49 for
the selected financial data for Lyondell for the years ended December 31, 1994,
1995, 1996, 1997 and 1998, for Lyondell Worldwide for the years ended December
31, 1994, 1995, 1996 and 1997 and for Lyondell for the three-month periods
ended March 31, 1998 and 1999. Please read "Unaudited Pro Forma Financial
Statements" beginning on page 42 for our unaudited pro forma financial data for
the year ended December 31, 1998 and the three-month periods ended March 31,
1998 and 1999.
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Risk Factors
You should carefully consider the following risks before participating in
the exchange offers.
Risk Factors Relating to the New Notes and the Exchange Offers
If you fail to exchange your outstanding notes, the existing transfer
restrictions will remain in effect; the market value of your outstanding notes
may be adversely affected because of a smaller float and reduced liquidity.
If you do not exchange your outstanding notes for new notes under the
exchange offers, the existing transfer restrictions on the outstanding notes
will continue to apply. In general, the outstanding notes may not be offered or
sold unless they are registered or exempt from registration under the
Securities Act and applicable state securities laws. Except as required by the
registration rights agreement, we do not intend to register resales of the
outstanding notes.
The tender of outstanding notes under the exchange offers will reduce the
aggregate principal amount of the outstanding notes traded or held in the
marketplace. This may have an adverse effect upon, and increase the volatility
of, the market price of any outstanding notes that you continue to hold due to
a reduction in liquidity.
There is no public market for the new notes, and we do not intend to list them
on any securities exchange or automated quotation system; an active trading
market for the new notes may not develop.
There is no existing public market for the new notes. We cannot provide any
assurance regarding:
. the liquidity of any markets that may develop for the new notes;
. your ability to sell your new notes; or
. the prices at which you will be able to sell your new notes.
Future trading prices of the new notes will depend on many factors,
including:
. prevailing interest rates;
. our operating results;
. ratings of the new notes; and
. the market for similar securities.
The initial purchasers of the outstanding notes have advised us that they
presently intend to make a market in the new notes after completion of the
exchange offers. However, the initial purchasers do not have any obligation to
do so, and they may discontinue any market-making activities at any time
without any notice.
We do not intend to apply for listing of the new notes on any securities
exchange or for quotation of the new notes on any automated dealer quotation
system.
Risk Factors Relating to Lyondell's Debt
Our balance sheet is highly leveraged; in order to fulfill our debt repayment
obligations, we may need to refinance our debt, delay acquisitions or capital
expenditures, or take other action to raise cash or reduce expenses.
At May 31, 1999, Lyondell had $6.3 billion of consolidated debt, which
amounted to approximately 82 percent of its total capitalization. Lyondell's
consolidated debt amounts do not include $3.1 billion in joint venture debt,
$713 million of which is Equistar debt for which Lyondell remains contingently
liable.
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Lyondell's ability to pay or to refinance its debt will depend on future
operating performance, which will be affected by general economic, financial,
competitive, legislative, regulatory, business and other factors. Many of these
factors are beyond Lyondell's control. Lyondell anticipates that its operating
cash flow, together with money Lyondell can borrow under its credit facility,
will be sufficient to meet anticipated future operating expenses and capital
expenditures. However, if future operating cash flows are less than currently
anticipated, Lyondell may be forced to:
. reduce or delay capital acquisitions or capital expenditures;
. sell assets; or
. reduce operating expenses.
Approximately $240 million of Lyondell's remaining outstanding debt will be
required to be repaid by December 31, 2000. Lyondell expects that most of this
debt will be repaid using cash from operations. The remaining debt is expected
to be repaid from proceeds of capital markets issuances, asset sales and/or
joint venture transactions. In addition, Lyondell's amended credit facility
requires Lyondell to issue up to approximately $470 million of additional
subordinated notes (or more junior securities) by June 2002, unless specified
financial tests are satisfied. This $470 million requirement will be reduced by
$2 for every $1 of common stock issued in the future and will be eliminated if
Lyondell achieves either:
. a total debt to adjusted EBITDA ratio, as defined in the credit facility,
of 3.0 to 1.0; or
. a rating for its senior secured debt of BB by Standard & Poor's and Ba2
by Moody's.
Lyondell cannot assure you that it will be able to sell these securities on
satisfactory terms, if at all.
Our debt agreements may restrict our ability to take some actions regardless of
whether these actions may be beneficial to holders of the new notes, our
stockholders or Lyondell.
Our Indentures
The indentures governing the new notes contain covenants that limit
Lyondell's ability to engage in some types of transactions. Among other things,
these covenants limit Lyondell's and Lyondell's subsidiaries' ability to:
. incur additional debt or issue subsidiary preferred stock;
. increase dividends on its capital stock;
. redeem or repurchase capital stock or repurchase subordinated debt;
. engage in transactions with affiliates, except on an arms-length basis;
. create liens or engage in sale and leaseback transactions;
. make some types of investments and sell assets; and
. consolidate or merge with, or sell substantially all its assets to,
another person.
Our credit facility
Lyondell's credit facility also contains restrictive covenants and prohibits
Lyondell from prepaying other debt, including the new notes, until some loans
under the credit facility are repaid in full and Lyondell's senior unsecured
debt is rated investment grade. The credit facility also requires Lyondell to
maintain specified financial ratios and satisfy financial condition tests.
Lyondell's ability to meet those financial ratios and tests can be affected by
events beyond its control, and Lyondell cannot assure you that it will be able
to satisfy those ratios and tests. The credit facility covenants also limit
Lyondell's ability to:
. increase dividends on its capital stock;
. make some types of investments; and
. allow its subsidiaries to incur some types and amounts of debt.
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A breach of any of these provisions could permit the lenders to accelerate
the debt under the credit facility to be immediately due and payable and to
terminate all commitments to extend further credit. If Lyondell were unable to
repay this debt, the lenders could proceed against the collateral granted to
them as security. Lyondell has pledged a substantial portion of its assets as
security for obligations under the credit facility and the Senior Secured
Notes. Lyondell cannot assure you that, if its lenders accelerate the repayment
of borrowings under the credit facility, Lyondell will have sufficient assets
to repay the new notes.
Most of the covenants under the new notes do not apply to our joint ventures;
our joint ventures could increase their debt leverage, default on their debt
obligations or take other action limiting their ability to pay distributions to
Lyondell for which you will have no recourse.
Lyondell conducts a substantial amount of its operations through its joint
ventures Equistar, LYONDELL-CITGO Refining and Lyondell Methanol. None of these
joint ventures is a "subsidiary" or a "restricted subsidiary" of Lyondell, as
those terms are defined in the indentures. Therefore, the covenants described
above do not apply to the joint ventures in which Lyondell participates.
As a result, holders of the new notes will have no recourse if Equistar,
LYONDELL-CITGO Refining or Lyondell Methanol substantially increases its debt
leverage. The indentures obligate Lyondell to use its best efforts to ensure
that its joint ventures do not agree to restrictions on their ability to pay
dividends to Lyondell, but that obligation is modified by significant
exceptions. For more information on these exceptions, you should read the
section called "Description of New Notes--Restrictive Covenants--Dividend and
Other Payment Restrictions Affecting Subsidiaries and Joint Ventures."
Equistar, LYONDELL-CITGO Refining and Lyondell Methanol could enter into
agreements that would restrict their ability to pay dividends or make other
distributions to Lyondell despite Lyondell's best efforts to the contrary.
Additionally, under applicable state law, Lyondell's joint ventures may be
limited in amounts that they are permitted to pay as distributions on their
equity interests. Any restriction on dividends from Lyondell's joint ventures
could have a material adverse effect on Lyondell.
Moreover, a default on debt obligations by a joint venture that is not a
"restricted subsidiary" would not give rise to a default under the indentures
governing the new notes. This is the case even though creditors of the
defaulting joint venture would have remedies against the joint venture. As a
result, holders of the new notes will have no recourse if any of these joint
ventures defaults on any of its debt.
A default by any of Lyondell's joint ventures under any of its material debt
instruments would give rise to a default under the credit facility. A default
by any joint venture on its debt could also result in a dividend blockage,
which could have a material adverse effect on Lyondell.
The new notes are subordinated to debt of our subsidiaries and joint ventures;
the Senior Subordinated Notes are subordinated to Lyondell's senior debt.
Subsidiary and joint venture liabilities
None of Lyondell's joint ventures have guaranteed the new notes. Lyondell's
subsidiaries Lyondell Worldwide and Lyondell Nederland are guarantors of the
new notes and are guarantors under the credit facility. No other subsidiaries
of Lyondell will guarantee the new notes. As a result, the new notes are not
debt of Lyondell's joint ventures or subsidiaries, other than Lyondell
Worldwide and Lyondell Nederland. Holders of the debt and other liabilities of
Lyondell's joint ventures and other subsidiaries will effectively be senior to
claims against those entities by holders of the new notes. At May 31, 1999,
these joint ventures had $4.0 billion of outstanding liabilities, including
trade payables.
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Subordination provisions of the Senior Subordinated Notes
The Senior Subordinated Notes rank junior to all existing and future senior
debt of Lyondell and the guarantors. At May 31, 1999, Lyondell and the
guarantors had approximately $5.8 billion of senior debt, substantially all of
which was secured.
As a result of this subordination, if either:
. Lyondell is insolvent or enters into bankruptcy or a similar proceeding;
. Lyondell fails to make a payment when due on senior debt; or
. any senior debt is accelerated;
then the holders of this senior debt must be paid in full before the holders
of the Senior Subordinated Notes may be paid.
In addition, Lyondell cannot make any cash payments to holders of Senior
Subordinated Notes if it has failed to make payments to holders of designated
senior debt. Under some circumstances, Lyondell cannot make any payments to
holders of Senior Subordinated Notes for a period of up to 179 days if
Lyondell has defaulted on covenants under designated senior debt but there has
been no payment default or acceleration.
Additional Pari Passu Debt
If Lyondell incurs any additional debt that ranks equally with the new
notes, the holders of that debt will be entitled to share ratably with the
holders of the new notes in any proceeds distributed in connection with any
insolvency, liquidation, reorganization, dissolution or other winding-up of
Lyondell. This may have the effect of reducing the amount of cash repaid to
holders of the new notes.
Lyondell may not be able to repurchase your new notes upon a change of
control.
Upon the occurrence of some change of control events described in the
indentures, you may require Lyondell to purchase your new notes at 101% of
their principal amount, plus accrued interest. Lyondell may not have the
financial resources to purchase your new notes, particularly if a change of
control event triggers a similar repurchase requirement for, or results in the
acceleration of, other debt. The credit facility provides that some change of
control events will constitute a default under the credit facility and could
result in the acceleration of the maturity of all debt under the credit
facility. Future debt may also contain similar provisions.
Holders of the Senior Secured Notes may not be able to fully realize the value
of their liens; in such case, holders of the Senior Secured Notes will have an
unsecured claim against Lyondell to the extent that amounts due on the Senior
Secured Notes exceed the proceeds from the sale of the secured assets.
The security for the benefit of the holders of the Senior Secured Notes can
be released without their consent.
The liens for the benefit of the Senior Secured Notes may be released
without any vote or consent by the holders of the Senior Secured Notes under
the following guidelines:
. the security documents generally provide for an automatic release of all
liens on any asset that is disposed of in compliance with the provisions
of the security documents;
. any lien can be released if approved by the requisite number of lenders
under our credit facility;
. the collateral agent and Lyondell may amend the provisions of the
security documents with the consent of the requisite number of lenders
under our credit facility and without the consent of the holders of any
of the Senior Secured Notes; and
. the lenders under our credit facility will have the sole ability to
control remedies with respect to the collateral, including the sale or
liquidation of the collateral after acceleration of the new notes or the
debt under the credit facility.
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<PAGE>
As a result, Lyondell cannot assure you that the Senior Secured Notes will
continue to be secured by a substantial portion of Lyondell's assets. Holders
of the Senior Secured Notes will have no recourse if the lenders under
Lyondell's credit facility approve the release of any or all the collateral.
This is the case even if that release adversely affects any rating of the
Senior Secured Notes.
The collateral may not be valuable enough to satisfy all the obligations
secured by the collateral.
Lyondell will secure its obligations under the Senior Secured Notes by the
pledge of some of its and Lyondell Worldwide's assets. This pledge is also for
the benefit of the lenders under the credit facility and the holders of
Lyondell Worldwide's outstanding debentures.
The security documents and the indentures allow Lyondell to apply the
proceeds of any sale of assets, including the collateral and excluding sales
after acceleration of the credit facility, to repay debt under the credit
facility and Lyondell Chemical Worldwide's 9.9% Debentures due 2000 before
repaying amounts owed under the Senior Secured Notes.
The value of the pledged assets in the event of a liquidation will depend
upon numerous factors, including market and economic conditions and the
availability of buyers. No independent appraisals of the pledged property have
been prepared in connection with the sale of the outstanding notes or the
exchange offers. Accordingly, Lyondell cannot assure you that the proceeds of
any sale of the pledged assets following an acceleration of the Senior Secured
Notes to maturity would be sufficient to satisfy, or would not be
substantially less than, amounts due on the Senior Secured Notes and the other
debt secured thereby. If the proceeds of any sale of the pledged assets were
not sufficient to repay all amounts due on any Senior Secured Notes, the
holders of Senior Secured Notes would have only an unsecured claim against the
remaining assets of Lyondell for the remainder of the amounts due.
By their nature, some or all of the pledged assets will be illiquid and may
have no readily ascertainable market value. Likewise, Lyondell cannot assure
holders of Senior Secured Notes that the pledged assets will be saleable. If
the pledged assets are saleable, there may be substantial delays in connection
with a liquidation. To the extent that liens, rights and easements granted to
third parties encumber assets located on property owned by Lyondell or
constitute subordinate liens on the pledged assets, third parties may exercise
rights and remedies with respect to the property subject to these
encumbrances, including rights to require marshaling of assets. These rights
of third parties could adversely affect the value of the subject pledged
assets and the ability of the collateral agent to realize or foreclose on the
subject pledged assets.
Bankruptcy laws may limit your ability to realize value from the
collateral.
If Lyondell defaults under the indentures for the Senior Secured Notes, the
collateral agent's right to repossess and dispose of the pledged assets is
likely to be significantly impaired if a bankruptcy case is commenced by or
against Lyondell before the collateral agent repossesses and disposes of the
pledged assets. Under the bankruptcy code, a secured creditor is prohibited
from repossessing its security from a debtor in a bankruptcy case, or from
disposing of security repossessed from that debtor, without approval of the
bankruptcy court. Moreover, the bankruptcy code permits the debtor in default
to continue to retain and use the collateral so long as the secured creditor
receives "adequate protection" by court order.
The meaning of the term "adequate protection" may vary according to
circumstances. In general, it is intended to protect the value of a secured
creditor's interest in the collateral and may include cash payments or the
granting of additional security for any decrease in the value of the
collateral as a result of the stay of repossession or the disposition or use
of the collateral by the debtor during the bankruptcy case. Generally,
adequate protection payments are not required to be paid by a debtor to a
secured creditor unless the bankruptcy court determines that the value of the
secured creditor's interest in the collateral is declining during
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<PAGE>
the course of the bankruptcy case. Due to the lack of a precise definition for
the term "adequate protection" and the broad discretionary powers of a
bankruptcy court, it is impossible to predict:
. how long payments under the Senior Secured Notes could be delayed
following the beginning of the bankruptcy case;
. whether or when the collateral agent could repossess or dispose of the
pledged assets; or
. whether or to what extent holders of the Senior Secured Notes would be
compensated for any delay in payment or loss of value of the pledged
assets through the requirement of "adequate protection."
The collateral is subject to casualty risks and no mortgage title insurance
has been obtained.
Lyondell is obligated under the security documents at all times to properly
insure the pledged assets against loss or damage by fire or other hazards to
the extent that these assets are usually insured by corporations operating
assets of a similar nature in the same or similar localities. There are,
however, some types of losses which may be either uninsurable or not
economically insurable. Further, the insurance proceeds may not compensate
Lyondell fully for its losses. In the event there is a total or partial loss of
any of the pledged assets, the proceeds received by Lyondell may not be
sufficient to satisfy all the secured obligations, including the Senior Secured
Notes.
In the event of a total or partial loss to any of the mortgaged facilities,
some items of equipment may not be easily replaced because they are
sufficiently large or customized that replacement units generally are not
readily available. Accordingly, notwithstanding any insurance coverage, the
large size of some of Lyondell's equipment and the extended period needed to
manufacture replacement units could cause significant delays in replacement.
Additionally, Lyondell is not required under the security documents to
purchase any title insurance insuring the collateral agent's lien on the
mortgaged properties. If a loss occurs from any mortgaged property because of a
title defect, Lyondell might not be able to replace the property with
collateral of equal value.
Fraudulent transfer statutes may limit your rights as a note holder; a court
could invalidate our obligations under the new notes or the liens or
subordinate your rights as a note holder to the rights of other creditors.
The incurrence by Lyondell of debt, including the new notes, to refinance
the debt incurred under the credit facility to acquire Lyondell Worldwide could
be reviewed under relevant federal and state fraudulent transfer laws in a
bankruptcy case or a lawsuit by or on behalf of unpaid creditors of Lyondell.
The collateral for the Senior Secured Notes includes mortgages on a substantial
portion of the domestic operating assets of Lyondell Worldwide. These assets
are not burdened by any liens and are available for claims of Lyondell
Worldwide's creditors before the claims of Lyondell's creditors. Creditors of
Lyondell Worldwide might claim that the granting of the liens on these assets
is a fraudulent transfer under federal or state laws.
Federal or state fraudulent transfer laws permit a court to do all of the
following:
. avoid all or a portion of Lyondell's obligations to holders of the new
notes;
. subordinate Lyondell's obligations to holders of the new notes to
Lyondell's other existing and future debt, thereby entitling other
creditors to be paid in full before any payment is made on the new notes;
or
. take other action detrimental to holders of the new notes, including, in
some circumstances, invalidating the new notes or the liens securing the
Senior Secured Notes.
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If a court were to take any of these actions, holders of the new notes might
not ever be repaid.
Under federal and state fraudulent transfer laws, to take any of those
actions, courts will typically need to find that, at the time the new notes
were issued, Lyondell either:
. issued the new notes with the intent of hindering, delaying or defrauding
current or future creditors; or
. received less than fair consideration or reasonably equivalent value for
incurring the debt represented by the new notes and:
(1) was insolvent or was rendered insolvent by reason of the issuance
of the new notes;
(2) was engaged, or about to engage, in a business or transaction for
which Lyondell's assets were unreasonably small; or
(3) intended to incur, or believed or should have believed it would
incur, debts beyond its ability to pay as the debts mature.
All of the terms used above are defined in or interpreted under the applicable
fraudulent transfer laws.
Different jurisdictions define "insolvency" differently. However, Lyondell
generally would be considered insolvent at the time it incurred the debt
constituting the new notes if either:
. the fair market value, or fair saleable value, of its assets is less than
the amount required to pay its total existing debts and liabilities,
including the probable liability on contingent liabilities, as they
become absolute or matured; or
. Lyondell was incurring debts beyond its ability to pay as the debts
mature.
Lyondell cannot assure holders of the new notes:
. what standard a court would apply to determine if Lyondell was
"insolvent" on the date it issued the new notes;
. that a court would not determine that Lyondell was insolvent on the date
it issued the new notes under either valuation method described above; or
. that a court would not determine that the payments constituted fraudulent
transfers on some other legal ground without regard to Lyondell's
solvency.
Fraudulent transfer statutes may limit your rights under the guarantees; a
court could invalidate the guarantees or subordinate your rights under the
guarantees to the rights of other creditors.
Our obligations under the new notes are guaranteed by Lyondell Worldwide and
Lyondell Nederland, two of our subsidiaries. The guarantees may be reviewed
under various laws enacted for the protection of creditors. It is possible that
the creditors of a guarantor may challenge a guarantee as a fraudulent transfer
under relevant federal and state laws, by claiming, for example, that the
obligations of the guarantor were incurred for less than reasonably equivalent
value or fair consideration because the guarantee was incurred for the benefit
of Lyondell and only indirectly, if at all, for the benefit of the guarantor.
Under some circumstances, including a finding that a guarantor was insolvent at
the time its guarantee was issued, a court could hold that the obligations of
the guarantors under the guarantees may be voided or are subordinate to other
obligations of the guarantors. In addition, it is possible that the amount for
which a guarantor is liable under a guarantee may be limited. In that case, the
analysis of insolvency described above would generally apply.
In an attempt to limit the applicability of fraudulent transfer laws, the
indentures limit the amount of the guarantees of Lyondell Worldwide and
Lyondell Nederland to the amount that will result in each guarantee not
constituting a fraudulent transfer or improper corporate distribution. However,
Lyondell cannot assure you as to what standard a court would apply in making a
determination as to what would be the maximum liability of a guarantor.
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Risk Factors Relating to Lyondell's Business
The chemical and refining industries are cyclical and volatile; the chemical
industry has experienced alternating periods of tight supply and overcapacity
which affect our results of operations and the market value of the new notes.
Lyondell's historical operating results reflect the cyclical and volatile
nature of both the chemical and refining industries. Both industries are mature
and capital intensive. Margins for these industries 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. These periods are typically followed by
periods of substantial capacity addition, resulting in oversupply and declining
prices and profit margins.
Due to the commodity nature of most of Lyondell's products, Lyondell 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
materials 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 Lyondell's competitors in various segments of the
chemical industry have announced plans for expansion of plant capacity.
Lyondell cannot assure holders of the new notes that future growth in product
demand will be sufficient to utilize this additional, or even current,
capacity. Excess industry capacity may lower Lyondell's production rates and
margins and its income and cash flow. As a result, Lyondell's earnings
fluctuate significantly.
External factors beyond Lyondell's control, including:
. general economic conditions;
. competitor action;
. international events and circumstances; and
. governmental regulation in the United States and abroad
can cause volatility in raw material prices, demand for Lyondell's products,
product prices and volumes, and margins. These factors can also magnify the
impact of economic cycles on Lyondell's business. A number of Lyondell's
products are highly dependent on durable goods markets that are particularly
cyclical, such as the housing and automotive markets. Any events or factors
that adversely affect Lyondell's results of operations may, in turn, also
adversely affect the market value of the new notes.
The chemical industry is highly competitive, with many of our competitors
having greater financial resources than we have; competition may affect our
results of operations and the market value of the new notes.
The chemical industry is highly competitive. Many of Lyondell's competitors
are larger and have greater financial resources than Lyondell. Among Lyondell's
chemical competitors are some of the world's largest chemical companies,
including:
. The Dow Chemical Company;
. Shell Chemical;
. BASF AG; and
. Bayer AG.
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
Lyondell.
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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 of potential substitute materials.
Changes in the competitive environment could have a material adverse effect on
the business and operations of Lyondell. These changes could include:
. the emergence of new competitors;
. the rate of capacity additions by competitors;
. the intensification of price competition in Lyondell's markets;
. the introduction of new or substitute products by competitors;
. technological innovations by competitors; and
. new environmental laws and regulatory requirements.
We may encounter difficulties in integrating recently acquired and combined
operations which may affect our results of operations and the market value of
the new notes.
Lyondell acquired Lyondell Worldwide in July 1998. Lyondell combined its
petrochemicals and polymers business with the business contributed by
Millennium Chemicals Inc. to form Equistar in December 1997. Equistar was
expanded by the addition of businesses previously held by Occidental Petroleum
Corporation in May 1998. The processes of integrating the operations of
Lyondell Worldwide with Lyondell and integrating the operations of Equistar are
not complete.
As is the case with any integration of major businesses that previously
operated independently, the integration processes for Lyondell Worldwide and
for Equistar require the dedication of significant management and operational
resources. The difficulties of combining operations may be magnified by:
. coordinating geographically separate organizations;
. integrating personnel with disparate business backgrounds; and
. combining different transaction processing and financial reporting
systems and processes and corporate cultures.
Lyondell's integration process could cause an interruption of or a loss of
momentum in business activities. In addition, Lyondell may suffer a loss of key
employees, customers or supplies, loss of revenues, increases in costs or other
difficulties, some of which may not have been foreseen. Lyondell may not be
able to realize the operating efficiencies, cost savings and other benefits
that are sought from these transactions. Difficulties encountered in the
integration processes could have a material adverse effect on the business and
operations of Lyondell.
Lyondell and Equistar actively pursue acquisitions, dispositions and joint
ventures which may affect our results of operations and the market price of the
new notes.
Lyondell and Equistar both actively seek opportunities to maximize
efficiency and value through various transactions, including purchases or sales
of assets or contractual arrangements or joint ventures. These transactions
generally are intended to result in the realization of savings, the creation of
efficiencies or the generation of cash to reduce debt. To the extent permitted
under Lyondell's and Equistar's credit facilities and other debt agreements,
these transactions may be financed by additional borrowings by Lyondell or
Equistar or by the issuance of common stock of Lyondell.
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These transactions may also affect the results of operations of Lyondell or
Equistar in the short term due to the costs associated with these transactions.
However, they are expected to yield longer-term benefits if the anticipated
efficiencies and cost savings of the transactions are realized. Factors such as
those described in the immediately preceding risk factor may make it difficult
or impossible to realize these expected efficiencies and cost savings.
Shared control of joint ventures involving Lyondell may delay decisions or
actions which may affect our results of operations and the market price of the
new notes.
Lyondell conducts a substantial amount of its operations through its joint
ventures. Lyondell shares control of these joint ventures with unaffiliated
third parties. Lyondell's forecasts and plans for its joint ventures assume
that its joint venture partners will observe their obligations with respect to
the joint ventures. If any of Lyondell's joint venture partners do not observe
their commitments, it is possible that the affected joint venture would not be
able to operate according to its business plans or that Lyondell would be
required to increase its level of commitment in order to give effect to the
business plans.
As with any joint venture arrangement, differences in views among the joint
venture participants may result in delayed decisions or in failures to agree on
major issues. This could potentially adversely affect the business and
operations of the joint venture and, in turn, the business and operations of
Lyondell.
LYONDELL-CITGO Refining's crude oil supply agreement with PDVSA may limit its
earnings and cash flow and decrease distributions to us; decreased
distributions could affect our results of operations and the market price of
the new notes.
Substantially all of the crude oil used by LYONDELL-CITGO Refining as a raw
material for its refinery is purchased under the crude supply agreement with
PDVSA. The crude supply agreement was entered into in 1993. Lyondell
experienced the full effects of the crude supply agreement beginning in 1997.
The crude supply agreement incorporates formula prices to be paid by LYONDELL-
CITGO Refining for the crude oil supplied. The formula prices are based on the
market value of a slate of refined products deemed to be produced from each
particular crude oil or raw material less:
. deemed refining costs adjustable for inflation and energy costs;
. actual costs, including crude oil transportation costs, import duties and
taxes; and
. a deemed margin, which varies according to the grade of crude oil or
other raw material delivered.
Deemed margins and deemed costs are adjusted periodically based on inflation
rates for specific deemed cost components. Adjustments to the crude supply
agreement 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 raw material 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 LYONDELL-CITGO Refining varies depending on, among other things, the
efficiency of LYONDELL-CITGO Refining's operations.
Although LYONDELL-CITGO Refining believes that the crude supply agreement
reduces the volatility of its earnings and cash flow, the crude supply
agreement also limits LYONDELL-CITGO Refining'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 LYONDELL-CITGO Refining refinery differ substantially
from those contemplated by the crude supply agreement, the benefits of the
crude supply agreement could be substantially diminished. This could result in
lower earnings and cash flow for LYONDELL-CITGO Refining. Furthermore, there
may be periods during which LYONDELL-CITGO Refining's costs for crude oil under
the crude supply agreement may be higher than crude oil available to LYONDELL-
CITGO Refining from other sources.
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The risk of enforcing judgments against non-United States affiliates of a
sovereign nation affects LYONDELL-CITGO Refining's crude oil supply agreement
with PDVSA; inability to enforce the crude supply agreement could result in
decreased distributions from LYONDELL-CITGO Refining to Lyondell that could
affect our results of operations and the market price of the new notes.
There are risks associated with enforcing the provisions of contracts with
companies such as PDVSA 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
companies whose assets are located outside of the United States and whose
management does not reside in the United States.
All of the crude oil supplied by PDVSA is produced in Venezuela, a country
that has experienced economic difficulties and 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, LYONDELL-CITGO Refining could experience significantly greater
volatility in its earnings and cash flows.
Each partner has a right to transfer their interest in LYONDELL-CITGO
Refining to unaffiliated third parties in some circumstances, subject to
reciprocal rights of first refusal. If CITGO were to transfer its interest in
LYONDELL-CITGO Refining to an unaffiliated third party, PDVSA 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 LYONDELL-CITGO Refining. LYONDELL-CITGO Refining would
have to purchase all of its crude oil in the open market, which could subject
LYONDELL-CITGO Refining to significant price fluctuations. Alternative crude
oil supplies providing similar margins might not be available for purchase by
LYONDELL-CITGO Refining.
The supply of crude oil to LYONDELL-CITGO Refining has been reduced due to
OPEC-mandated supply cuts; this could result in decreased distributions from
LYONDELL-CITGO Refining to Lyondell and affect our results of operations and
the market price of the new notes.
In late April 1998, LYONDELL-CITGO Refining received notice from PDVSA of
reduced delivery of crude oil related to announced OPEC production cuts. In
August 1998, LYONDELL-CITGO Refining began receiving reduced deliveries from
PDVSA. Following additional cutbacks announced by OPEC in late March 1999,
LYONDELL-CITGO Refining received notice from PDVSA in May 1999 of further
reductions in its delivery of crude oil under the crude supply agreement.
Historically, Venezuela has complied with OPEC-mandated supply cuts by
reducing its crude production. Decreased allocations of PDVSA crude oil tend to
reduce LYONDELL-CITGO Refining's pretax income and, accordingly, Lyondell's pro
rata share of LYONDELL-CITGO Refining's income. OPEC-mandated supply cuts are a
force majeure event under the crude supply agreement for which Lyondell has no
contractual remedy.
While to date LYONDELL-CITGO Refining has been able to obtain alternate
supplies of crude oil, the margin for this crude oil has been less than the
margin for the crude oil purchased under the crude supply agreement. PDVSA may
announce further cutbacks in production and thereby reduce LYONDELL-CITGO
Refining's allocation of crude oil. Lyondell cannot predict whether LYONDELL-
CITGO Refining will be able to continue to obtain adequate alternative supplies
of crude oil, or at what cost it will be able to obtain substitute crude oil.
Hazards associated with chemical manufacturing and petroleum refining may occur
and adversely affect our results of operations and the market price of the new
notes.
Material operating problems, including but not limited to the events
described below, could occur that might have a material adverse effect on the
productivity and profitability of a particular manufacturing facility, or on
Lyondell as a whole, during and after the period of operational difficulties.
Lyondell's revenues are dependent on the continued operation of its various
production facilities, including the ability to complete
24
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construction projects on a schedule. The usual hazards associated with chemical
manufacturing and refining and the related storage and transportation of raw
materials, products and wastes may occur in Lyondell's operations. These
hazards may include:
. 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 may cause personal injury and loss of life, severe damage to
or destruction of property and equipment and environmental damage. These
hazards may also result in suspension of operations and the imposition of civil
or criminal penalties. Furthermore, Lyondell is also subject to present and
future claims with respect to workplace exposure, workers' compensation and
other matters. Lyondell maintains property, business interruption and casualty
insurance which it believes complies with customary industry practices.
However, Lyondell is not fully insured against all potential hazards incident
to its business.
Extensive environmental, health and safety laws and regulations impact our
operations and assets; compliance with these regulations could affect our
results of operations and the market price of the new notes.
Lyondell's operations and ownership and use of real property are subject to
extensive environmental, health and safety laws and regulations. These laws and
regulations are 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 to natural resources; and
. provide for substantial fines and potential criminal sanctions for
violations.
The nature of the chemical and refining industries exposes Lyondell to risks
of liability under these 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
25
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for alleged personal injury or property damage due to exposure to chemicals at
Lyondell's facilities or to chemicals otherwise owned or controlled by
Lyondell.
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 raw materials 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 any company that:
. generated the waste;
. arranged for disposal of the waste;
. transported the waste to the disposal site;
. selected the disposal site; or
. presently or formerly owned or operated the disposal site.
All the responsible parties, or any one of them, including Lyondell, may be
required to bear all of the costs of cleanup regardless of fault, legality of
the original disposal or ownership of the disposal site.
Lyondell expects that the nature of its businesses will continue to subject
Lyondell to increasingly stringent environmental and health and safety laws and
regulations. It is difficult to predict the future interpretation and
development of these laws and regulations or their impact on Lyondell's future
earnings and operations. Lyondell anticipates that compliance will continue to
require increased capital expenditures and operating costs. In particular, the
ultimate effect of the Clean Air Act on Lyondell's operations will depend on
how the law is interpreted and implemented under regulations that are currently
being developed and on additional factors such as the development of
environmental control technologies.
Lyondell's policy is to accrue costs relating to environmental matters when
it is probable that the costs will be required and can be reasonably estimated.
Estimated costs for future environmental compliance and remediation or other
costs are necessarily imprecise due to factors which include:
. 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, Lyondell evaluates the status of all significant existing
or potential environmental issues, develops or revises estimates of costs to
satisfy known remediation requirements and adjusts its accruals accordingly. As
of May 31, 1999, the reserve was $44 million. Based upon information presently
available, Lyondell does not expect that future environmentally related 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. Future costs could be material to future quarterly or
annual results of operations.
Pending or future legislative initiatives or litigation may materially
adversely affect our MTBE sales or subject Lyondell to products liability,
which may affect our results of operations and affect the market price of the
new notes.
MTBE is present in some water supplies in California and other states due to
gasoline leaking from underground storage tanks and recreational water craft.
This has led to public concern that MTBE may
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contaminate drinking water supplies and result in a possible health risk. There
have been claims that MTBE travels more rapidly through soil, is more soluble
in water, and is more difficult and more costly to remediate than other
gasoline components.
Heightened public awareness about MTBE has resulted in 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. In April 1999, the governor of California announced
an intention to eliminate MTBE from gasoline sold in California by December 31,
2002. There is ongoing review of this issue and the ultimate resolution of the
appropriateness of using MTBE could result in a significant reduction in
Lyondell's MTBE sales.
In addition, Lyondell has a take-or-pay MTBE sales contract with Atlantic
Richfield Company that contributes significant pre-tax margin. If the
legislative initiatives described above are enacted, Atlantic Richfield Company
has indicated that it might attempt to invoke a force majeure provision in the
contract to reduce the quantities of MTBE it purchases under the contract or to
terminate the contract. Lyondell would vigorously dispute either 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 Lyondell's sales under the Atlantic
Richfield Company contract could have a negative impact on Lyondell's results
of operations.
Exchange rate fluctuations, exchange controls, political risks and other risks
relating to foreign operations affect Lyondell's international operations,
which may affect our results of operations and affect the market price of the
new notes.
A number of risks affect Lyondell's international operations and exports to
foreign markets including:
. currency exchange rate fluctuations;
. trade barriers;
. exchange controls;
. national and regional labor strikes;
. political risks;
. risks of increases in duties and taxes; and
. changes in laws and policies governing operations of foreign-based
companies.
Lyondell 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.
However, these techniques may not protect Lyondell's reported results against
loss and Lyondell may incur material losses on these hedge contracts. Foreign
income tax rules reducing cash flow available to meet required debt service and
other obligations of Lyondell may apply to earnings of foreign subsidiaries and
intercompany payments.
A number of Asian and Latin American economies have recently experienced
economic difficulties. 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 Lyondell.
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Lyondell's quarterly results vary significantly, which could affect the market
price of the notes.
Lyondell's quarterly results vary significantly depending on various
factors, most of which are beyond Lyondell's control, including:
. changes in product prices;
. changes in product demand;
. changes in 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 maintenance.
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Cautionary Statement
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission.
. You should rely only on the information or representations provided in
this prospectus.
. We have not authorized any person to provide information in this
prospectus other than that provided in this prospectus.
. We have not authorized anyone to provide you with different information.
. We are not making an offer of these securities in any jurisdiction where
the offer is not permitted.
. You should not assume that the information in this prospectus is accurate
as of any date other than the date on the front of this document.
Forward-Looking Information
Some of the statements in this prospectus include forward-looking
statements. Although Lyondell believes the expectations reflected in the
forward-looking statements are reasonable, they do involve assumptions, risks,
and uncertainties, and there are no assurances that these expectations will
prove to be correct. The actual results obtained by Lyondell could differ
materially from those anticipated in these forward-looking statements as a
result of factors beyond the control of Lyondell or its joint ventures. These
factors include:
. the cyclical and highly competitive nature of the chemical and refining
industries;
. uncertainties associated with the United States and world-wide economies;
. current and potential government regulatory actions in the United States
and other countries;
. substantial chemical capacity additions resulting in oversupply and
declining prices and margins;
. raw materials costs or supply arrangements;
. Lyondell'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.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise. You are cautioned against putting undue reliance on forward-looking
statements or projecting any future results based on these statements or
present or prior earnings levels. All oral or written forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements.
The Exchange Offers
We are offering to exchange our outstanding 9 5/8% Senior Secured Notes,
Series A, due 2007, 9 7/8% Senior Secured Notes, Series B, due 2007 and 10
7/8% Senior Subordinated Notes due 2009 for a like kind and principal amount
of our new 9 5/8% Senior Secured Notes, Series A, due 2007, 9 7/8% Senior
Secured Notes, Series B, due 2007 and 10 7/8% Senior Subordinated Notes due
2009. The offers to exchange the outstanding notes are separate, independent
offers. We may extend, delay or terminate one offer without extending,
delaying or terminating the other offers. The description of the exchange
offers contained in this prospectus applies to each of our exchange offers.
However, holders of a particular series of outstanding notes will need to
complete the exchange offer documentation related to that particular series of
notes. Holders who wish to exchange outstanding notes of more than one series
of notes must complete the separate exchange offer documentation related to
each series of notes they wish to tender.
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Purpose and Effect of the Exchange Offers
We are offering the new notes under this prospectus to satisfy our
obligations under the registration rights agreement we entered into with the
initial purchasers of the outstanding notes. Under this agreement, we agreed to
file a registration statement with the SEC relating to our offers to exchange
the outstanding notes for new notes. We also agreed to use our reasonable best
efforts to have the registration statement declared effective within 210 days
after May 17, 1999 and to consummate the exchange offers no later than 30
business days after the registration statement is declared effective.
However, the SEC has recently proposed the repeal of its interpretations
permitting the use of a registration statement in connection with exchange
offers like ours. We cannot predict whether the SEC will act on this proposal
before completion of the exchange offers. If those interpretations are repealed
before the exchange offers are completed, holders of outstanding notes will not
be able to receive new notes under the exchange offers. Rather, we will be
required to register the outstanding notes under a shelf registration statement
in connection with resales by the holders. Holders will be required to deliver
a prospectus to the purchasers and will be subject to some of the civil
liability provisions under the Securities Act in connection with their resales.
We will file with the SEC a shelf registration statement to cover resales of
any or all of the series of outstanding notes if any of the following events
occur:
. an exchange offer is not permitted by applicable law or SEC policy; or
. any holder of the outstanding notes which are Transfer Restricted
Securities as defined in the registration rights agreement gives timely
notice that:
(1) it is prohibited by law or SEC policy from participating in the
applicable exchange offer;
(2) it cannot resell the new notes to the public without delivering a
prospectus and this prospectus is not appropriate or available for
those resales by it; or
(3) it is a broker-dealer that holds outstanding notes acquired
directly from us or any of our affiliates.
If we are required to file a shelf registration statement, we will use our
reasonable best efforts to cause the SEC to declare effective the shelf
registration statement within 60 days of the deadline for filing the shelf
registration statement. In addition, each holder will be required to deliver
information to be used in connection with the shelf registration statement in
order to have its outstanding notes included in the shelf registration
statement. We will also use our reasonable best efforts to keep the shelf
registration statement effective for up to two years after May 17, 1999.
We have the ability to suspend the shelf registration statement for no more
than:
. 60 days during the first two years after May 17, 1999; and
. 90 days during any subsequent year
if we determine, in our reasonable best judgment upon written advice of
counsel, that continued effectiveness would require disclosure of confidential
information or interfere with any financing, acquisition, reorganization or
other material transaction involving Lyondell.
If we fail to comply with deadlines for completion of any of the exchange
offers, we will be required to pay liquidated damages to holders of the series
of outstanding notes so affected. Please read the section captioned
"Registration Rights Agreement" for more details regarding liquidated damages
and Lyondell's obligations under the registration rights agreement.
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To exchange an outstanding note for a freely transferable new note in an
exchange offer, you will be required to make all of the following
representations:
. any new note you receive will be acquired in the ordinary course of its
business;
. you have no arrangement or understanding with any person to participate
in the distribution of the outstanding notes or the new notes within the
meaning of the Securities Act;
. if you are not a broker-dealer or you are a broker-dealer but will not
receive new notes for your own account in exchange for outstanding notes,
that you are not engaged in and do not intend to participate in a
distribution of the new notes within the meaning of the Securities Act;
. if you are a broker-dealer that will receive new notes for your own
account in exchange for outstanding notes, that the new notes are being
acquired by you as a result of market-making activities or other trading
activities and that you will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of the
new notes; and
. you are not an "affiliate," as defined in Rule 405 of the Securities Act,
of Lyondell, Lyondell Worldwide or Lyondell Nederland or a broker-dealer
tendering outstanding notes acquired directly from Lyondell for your own
account.
Resale of New Notes
Based on interpretations of the SEC staff in "no action letters" issued to
third parties, we believe that each new note issued under each of the exchange
offers may be offered for resale and be resold and otherwise transferred by the
holder of that new note without compliance with the registration and prospectus
delivery provisions of the Securities Act if:
. you are not an "affiliate," within the meaning of Rule 405 under the
Securities Act, of Lyondell, Lyondell Worldwide or Lyondell Nederland;
. the new note is acquired in the ordinary course of your business; and
. you do not intend to participate in the distribution of new notes.
However, the SEC has not considered the legality of any of our exchange
offers in the context of a "no action letter," and there can be no assurance
that the staff of the SEC would make a similar determination with respect to
any of our exchange offers as in other circumstances.
If you tender your notes in an exchange offer with the intention of
participating in any manner in a distribution of the new notes, you:
. cannot rely on these interpretations in "no action letters" by the SEC
staff; and
. must comply with the registration and prospectus delivery requirements of
the Securities Act, including being named as a selling noteholder, in
connection with a secondary resale transaction.
Unless an exemption from registration is otherwise available, any security
holder intending to distribute new notes should be covered by an effective
registration statement under the Securities Act containing the selling security
holder's information required by Item 507 or Item 508, as applicable, of
Regulation S-K under the Securities Act. This prospectus may be used for an
offer to resell or a resale or other re-transfer of the new notes of any series
only as specifically described in this prospectus. Failure to comply with the
registration and prospectus delivery requirements by a holder subject to these
requirements could result in that holder incurring liability for which it is
not indemnified by Lyondell. Only broker-dealers that acquired the outstanding
notes as a result of market-making activities or other trading activities may
participate in the exchange offers. Please read the section captioned "Plan of
Distribution" for more details regarding the transfer of the new notes.
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Terms of the Exchange Offers
Upon the terms and subject to the conditions described in this prospectus
and in the applicable letter of transmittal, we will accept for exchange any
outstanding notes properly tendered and not withdrawn before the expiration
date for the applicable exchange offer. We will issue $1,000 principal amount
of new notes in exchange for each $1,000 principal amount and like kind of
outstanding notes surrendered under an exchange offer. Outstanding notes may be
tendered only in integral multiples of $1,000. No exchange offer is conditioned
upon any minimum aggregate principal amount of outstanding notes being tendered
for exchange. No exchange offer is dependent on the consummation of any other
exchange offer.
As of the date of this prospectus, $900 million of 9 5/8% Senior Secured
Notes, Series A, due 2007, $1 billion of 9 7/8% Senior Secured Notes, Series B,
due 2007 and $500 million of 10 7/8% Senior Subordinated Notes due 2009 are
outstanding. This prospectus and the applicable letter of transmittal are being
sent to all registered holders of these outstanding notes. There will be no
fixed record date for determining registered holders of outstanding notes
entitled to participate in any of the exchange offers.
We intend to conduct the exchange offers according to the provisions of the
registration rights agreement, the applicable requirements of the Securities
Act and the Securities Exchange Act of 1934 and the rules and regulations of
the SEC. Outstanding notes that are not tendered for exchange in an exchange
offer will remain outstanding and continue to accrue interest and will be
entitled to the rights and benefits the holders have under the applicable
indenture and the registration rights agreement.
We will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance
to the exchange agent and complied with the applicable provisions of the
registration rights agreement. The exchange agent will act as agent for the
tendering holders for the purposes of receiving the new notes.
If you tender outstanding notes in an exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the applicable letter of transmittal, transfer taxes with respect to the
exchange of your outstanding notes. We will pay all charges and expenses, other
than some applicable taxes as described below, in connection with the exchange
offers. It is important for holders to read the section labeled "--Fees and
Expenses" for more details regarding fees and expenses incurred in the exchange
offers.
We will return any outstanding notes that we do not accept for exchange for
any reason without expense to the tendering holder as promptly as practicable
after the expiration or termination of the exchange offers.
Expiration Date
Unless sooner terminated, the exchange offers will expire at 5:00 p.m., New
York City time on , 1999, unless, in our sole discretion, we
extend one or all of the exchange offers.
Extensions, Delay in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or from time to time to extend
the period of time during which any exchange offer is open. We may extend any
exchange offer independently of the expiration date of the other exchange
offers. During any extension, all outstanding notes previously tendered will
remain subject to the applicable exchange offer, and we may accept them for
exchange. To extend an exchange offer, we will notify the exchange agent orally
or in writing of any extension. We will also make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
If any of the conditions described below under "--Conditions to the Exchange
Offers" have not been satisfied, we reserve the right, in our sole discretion
to either:
. delay accepting for exchange any outstanding notes;
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. extend any or all of the exchange offers; or
. terminate any or all of the exchange offers
by giving oral or written notice of a delay, extension or termination to the
exchange agent. Subject to the terms of the registration rights agreement, we
also reserve the right to amend the terms of the exchange offers in any manner.
Any delay in acceptance, extension, termination or amendment of an exchange
offer will be followed, as promptly as practicable, by oral or written notice
to the registered holders of the applicable outstanding notes. If we amend an
exchange offer in a manner we determine to constitute a material change, we
will promptly disclose the amendment by means of a prospectus supplement and,
if required, a post effective amendment to the registration statement of which
this prospectus forms a part. We will distribute the supplement to the
registered holders of the applicable outstanding notes. Depending upon the
significance of the amendment to the exchange offer and the manner of
disclosure to the registered holders, we will extend an exchange offer if the
exchange offer would otherwise expire during that period.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment
of any or all of the exchange offers, we will have no obligation to publish,
advertise or otherwise communicate any public announcement, other than by
making a timely release to the Dow Jones News Service.
Conditions to the Exchange Offers
Despite any other term of the exchange offers, if in our reasonable judgment
any of the exchange offers, or the making of any exchange by a holder of
outstanding notes, would violate applicable law or any applicable
interpretation of the staff of the SEC:
. we will not be required to accept for exchange, or to exchange any new
notes for, any outstanding notes; and
. we may terminate either or both of the exchange offers as provided in
this prospectus before accepting any outstanding notes for exchange.
In addition, we will not be obligated to accept for exchange the outstanding
notes of any holder that has not made:
. the representations described under "--Purpose and Effect of the Exchange
Offers," "--Procedures for Tendering" and "Plan of Distribution"; and
. other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to make available to us an
appropriate form for registration of the new notes under the Securities
Act.
We expressly reserve the right to amend or terminate any or all of the
exchange offers, and to reject for exchange any outstanding notes not
previously accepted for exchange, upon the occurrence of any of the conditions
to the exchange offers specified above. We will give oral or written notice of
any extension, amendment, nonacceptance or termination to the exchange agent
and the holders of the outstanding notes as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times in our sole
discretion. If we fail at any time to exercise any of these rights, this
failure will not mean that we have waived our rights. Each right will be deemed
an ongoing right that we may assert at any time or at various times. In
addition, we will not accept for exchange any outstanding notes tendered and
will not issue new notes in exchange for any outstanding notes if, at that
time, any stop order has been threatened or is in effect with respect to:
. the registration statement of which this prospectus is a part; or
33
<PAGE>
. the qualification of the applicable indenture relating to the notes under
the Trust Indenture Act of 1939.
Procedures for Tendering
How to Tender Generally
Only a registered holder of outstanding notes may tender outstanding notes
in an exchange offer. To tender in an exchange offer, you must either:
(1) .complete, sign and date the applicable letter of transmittal;
. have the signature on the applicable letter of transmittal
guaranteed if the letter of transmittal so requires;
. mail, fax or deliver the applicable letter of transmittal to the
exchange agent before the expiration date of the applicable exchange
offer; and
. deliver the outstanding notes to be tendered to the exchange agent
with the applicable letter of transmittal prior to the expiration
date or make book-entry delivery of the outstanding notes to the
exchange agent, in which case the exchange agent must receive,
before the expiration date, a timely confirmation of book-entry
transfer of the outstanding notes into the exchange agent's account
at DTC according to the procedure for book-entry transfer described
below; or
(2) comply with the automated tender offer program procedures of DTC
described below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the applicable letter of transmittal and other required documents
at its address provided above under "Prospectus Summary--The Exchange Agent"
before the expiration date. Any tender by a holder that is not withdrawn before
the expiration date will constitute an agreement between the holder and us
according to the terms and subject to the conditions described in this
prospectus and in the applicable letter of transmittal.
If you wish to tender your outstanding notes and cannot comply with the
requirement to deliver the letter of transmittal and your outstanding notes or
use the automated tender offer program of the DTC before the expiration date,
you must tender your outstanding notes according to the guaranteed delivery
procedures described below.
The method of delivery of the outstanding notes, the applicable letter of
transmittal and all other required documents to the exchange agent is at the
holder's election and risk. Except as provided in the applicable letter of
transmittal, delivery of these items will be deemed made only when actually
received or confirmed by the exchange agent. Rather than mail these items, we
recommend that holders use an overnight or hand delivery service. In all cases,
holders should allow sufficient time to ensure delivery to the exchange agent
before the expiration date. Holders should not send the applicable letter of
transmittal or outstanding notes to us. Holders may request their brokers-
dealers, commercial banks, trust companies or other nominees to effect the
above transactions on their behalf.
Tendering Through DTC's Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender outstanding notes. Instead of physically completing and
signing the applicable letter of transmittal and delivering it to the exchange
agent, participants in the program may transmit their acceptance of the
exchange offers electronically. They may do so by causing DTC to transfer the
outstanding notes to the exchange agent according to its procedures for
transfer. DTC will then send an agent's message to the exchange agent.
The term "agent's message" means a message transmitted by DTC, received by
the exchange agent and forming part of the book-entry confirmation, stating
that:
. DTC has received an express acknowledgment from a participant in its
automated tender offer program that is tendering outstanding notes which
are the subject of book-entry confirmation;
34
<PAGE>
. the participant has received and agrees to be bound by the terms of the
applicable letter of transmittal or, in the case of an agent's message
relating to guaranteed delivery, that the participant has received and
agrees to be bound by the applicable notice of guaranteed delivery; and
. the agreement may be enforced against the participant.
How to Tender if You are a Beneficial Owner
If you beneficially own outstanding notes that are registered in the name of
a broker-dealer, commercial bank, trust company or other nominee and you wish
to tender those notes, you should contact the registered holder promptly and
instruct it to tender on your behalf. If you are a beneficial owner and wish to
tender on your own behalf, you must, before completing and executing the
applicable letter of transmittal and delivering your outstanding notes, either:
. make appropriate arrangements to register ownership of the outstanding
notes in your name; or
. obtain a properly completed bond power from the registered holder of your
outstanding notes.
The transfer of registered ownership may take considerable time and may not be
completed before the expiration date.
Signatures and Signature Guarantees
You must have the signatures on the applicable letter of transmittal or a
notice of withdrawal described below guaranteed by one of the following:
. a member firm of a registered national securities exchange;
. a member of the National Association of Securities Dealers, Inc.;
. a commercial bank or trust company having an office or correspondent in
the United States; or
. an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934 that is a member of one of the
recognized signature guarantee programs identified in the applicable
letter of transmittal
unless the outstanding notes are tendered either:
. by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the
applicable letter of transmittal and the new notes are being issued
directly to the registered holder of the outstanding notes tendered in
the exchange for those new notes; or
. for the account of a financial institution that is a participant in one
of the medallion guarantee programs specified in the applicable letter of
transmittal.
When Endorsements or Bond Powers are Needed
If the applicable letter of transmittal is signed by the registered holder
of the outstanding notes to be tendered and the new notes are to be issued to
the registered holder, then the outstanding notes are not required to be
endorsed and a bond power is not required. In any other case, a holder
tendering outstanding notes must either endorse the outstanding notes to be
tendered or provide a properly completed bond power. The bond power must be
signed by the registered holder as the registered holder's name appears on the
outstanding notes and a financial institution that is a participant in one of
the medallion guarantee programs specified in the applicable letter of
transmittal must guarantee the signature on the bond power.
If the applicable letter of transmittal or any outstanding notes or bond
powers are signed by trustees, executors, administrators, guardians, attorneys-
in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, those persons should so indicate when signing. They
should also submit evidence of their authority to deliver the applicable letter
of transmittal satisfactory to us unless we waive this requirement.
35
<PAGE>
Determinations Under the Exchange Offers
We will determine in our sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered outstanding notes
and withdrawal of tendered outstanding notes. Our determination will be final
and binding. We reserve the absolute right to reject any and all outstanding
notes not properly tendered or any outstanding notes our acceptance of which
would, in our opinion or the opinion of our counsel, be unlawful. We also
reserve the right to waive any defects, irregularities or conditions of tender
as to particular outstanding notes. Our interpretation of the terms and
conditions of an exchange offer, including the instructions in the applicable
letter of transmittal, will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of outstanding notes
must be cured within the time we will determine. Neither we, the exchange agent
nor any other person will be under any duty to give notification of defects or
irregularities with respect to tenders of outstanding notes, and none of the
aforementioned will incur liability for failure to give notification. Tenders
of outstanding notes will not be deemed made until any defects or
irregularities have been cured or waived. Any outstanding notes received by the
exchange agent that are not properly tendered and the defects or irregularities
of which have not been cured or waived will be returned to the tendering
holder, unless otherwise provided in the applicable letter of transmittal, as
soon as practicable following the expiration date.
When We Will Issue New Notes
In all cases, we will issue new notes for the outstanding notes that we have
accepted for exchange under an exchange offer only after the exchange agent
timely receives both:
. the outstanding notes or a timely book-entry confirmation of the
outstanding notes into the exchange agent's appropriate account at DTC;
and
. a properly completed and duly executed applicable letter of transmittal
and all other required documents or a properly transmitted agent's
message.
Return of Outstanding Notes Not Accepted or Exchanged
If we do not accept any tendered outstanding notes for exchange for any
reason described in the terms and conditions of the exchange offers or if
outstanding notes are submitted for a greater principal amount than the holder
desires to exchange, the unaccepted or nonexchanged outstanding notes will be
returned without expense to their tendering holder. In the case of outstanding
notes tendered by book-entry transfer into the exchange agent's account at DTC
according to the procedures described below, the outstanding notes not
exchanged will be credited to an account maintained with DTC. These actions
will occur as promptly as practicable after the expiration or termination of
the applicable exchange offer.
Your Representations to Us
By signing or agreeing to be bound by the applicable letter of transmittal,
you will represent, among other things, that:
. any new notes that you receive will be acquired in the ordinary course of
your business;
. you have no arrangement or understanding with any person to participate
in the distribution of the new notes;
. if you are not a broker-dealer or are a broker-dealer but will not
receive new notes for your own account in exchange for outstanding notes,
that you are not engaged in and do not intend to participate in a
distribution of the new notes;
. if you are a broker-dealer that will receive new notes for your own
account in exchange for outstanding notes which were acquired for your
own account, that the new notes are being acquired by you as a result of
market-making activities or other trading activities and that you will
deliver a
36
<PAGE>
prospectus, meeting the requirements of the Securities Act, in connection
with any resale of the new notes; and
. that you are not an "affiliate," as defined in Rule 405 of the Securities
Act, of Lyondell, Lyondell Worldwide or Lyondell Nederland or a broker-
dealer tendering outstanding notes acquired directly from Lyondell for
your own account.
Book-entry Transfer
The exchange agent will make a request to establish an account with respect
to each series of the outstanding notes at DTC for purposes of the exchange
offers promptly after the date of this prospectus. Any financial institution
participating in DTC's system may make book-entry delivery of outstanding
notes by causing DTC to transfer the outstanding notes into the exchange
agent's respective account at DTC according to DTC's procedures for transfer.
Holders whose outstanding notes are not immediately available or who are
unable to deliver confirmation of the book-entry tender of their outstanding
notes into the exchange agent's account at DTC or all other documents required
by the applicable letter of transmittal to the exchange agent on or before the
applicable expiration date must tender their outstanding notes according to
the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If you wish to tender your outstanding notes but your outstanding notes are
not immediately available or you cannot deliver your outstanding notes, the
applicable letter of transmittal or any other required documents to the
exchange agent or comply with the applicable procedures under DTC's automated
tender offer program before the expiration date, you may tender if:
. the tender is made by or through a financial institution that is a
participant in one of the medallion guarantee programs specified in the
applicable letter of transmittal;
. before the applicable expiration date, the exchange agent receives from
the eligible guarantor financial institution, either a properly completed
and duly executed notice of guaranteed delivery or a properly transmitted
agent's message and notice of guaranteed delivery:
(1) stating your name and address, the registration number(s) of your
outstanding notes and the total principal amount of outstanding
notes tendered;
(2) stating that the tender is being made; and
(3) guaranteeing that, within five business days after the expiration
date, the applicable letter of transmittal or an agent's message in
lieu thereof, together with the outstanding notes or a book-entry
confirmation and any other documents required by the applicable
letter of transmittal, will be deposited by the eligible guarantor
institution with the exchange agent; and
. the exchange agent receives the properly completed and executed
applicable letter of transmittal, as well as all tendered outstanding
notes in proper form for transfer or a book-entry confirmation and all
other documents required by the applicable letter of transmittal, within
five business days after the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures described above.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time before 5:00 p.m., New York City time, on the expiration
date unless previously accepted for exchange. For a withdrawal to be
effective:
37
<PAGE>
. the exchange agent must receive a written notice of withdrawal at one of
the addresses listed above under "Prospectus Summary--The Exchange
Agent"; or
. you must comply with the appropriate procedures of DTC's automated tender
offer program system.
Any notice of withdrawal must comply with the following requirements:
. specify the name of the person who tendered the outstanding notes to be
withdrawn as depositor;
. identify the outstanding notes to be withdrawn, including the
registration numbers of the outstanding notes and the total principal
amount of the outstanding notes;
. contain the signature of the depositor in the same manner as the original
signature on the applicable letter of transmittal used to deposit those
outstanding notes or be accompanied by documents of transfer sufficient
to permit the trustee for the outstanding notes to register the transfer
into the name of the depositor withdrawing the tender; and
. specify the name in which the outstanding notes are to be registered, if
different from that of the depositor.
If outstanding notes have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn outstanding
notes and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal. Our determination will be final and
binding on all parties. We will deem any outstanding notes so withdrawn not to
have been validly tendered for exchange for purposes of the exchange offers.
Any outstanding notes that have been tendered for exchange but are not
exchanged for any reason will be returned to their holder without cost to the
holder. In the case of outstanding notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described
above, the outstanding notes will be credited to an account maintained with
DTC for the outstanding notes. This return or crediting will take place as
soon as practicable after withdrawal, rejection of tender or termination of
the applicable exchange offer. Holders may re-tender properly withdrawn
outstanding notes by following one of the procedures described under the
caption "--Procedures for Tendering" above at any time on or before the
expiration date.
Fees and Expenses
We will bear the expenses of soliciting tenders of the outstanding notes.
The principal solicitation is being made by mail. However, we may make
additional solicitation by telephone or in person by our officers and regular
employees and the officers and regular employees of our affiliates.
We have not retained any dealer-manager in connection with any of the
exchange offers and will not make any payments to broker-dealers or others
soliciting acceptances of any of the exchange offers. We will, however, pay
the exchange agent reasonable and customary fees for its services and
reimburse it for its related reasonable out-of-pocket expenses. We may also
pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of
this prospectus, the applicable letter of transmittal and related documents to
the beneficial owners of the outstanding notes and in handling or forwarding
the tendered outstanding notes for exchange.
We will pay the cash expenses to be incurred in connection with each of the
exchange offers, including:
. SEC registration fees;
. fees and expenses of the exchange agent and trustee;
. accounting and legal fees and printing costs; and
. related fees and expenses.
38
<PAGE>
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under an exchange offer. The tendering holder, however, will
be required to pay any transfer taxes, whether imposed on the registered holder
or any other person, if:
. new notes or outstanding notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the outstanding
notes tendered;
. tendered outstanding notes are registered in the name of any person other
than the person signing the applicable letter of transmittal; or
. a transfer tax is imposed for any reason other than the exchange of the
outstanding notes under the applicable exchange offer.
If satisfactory evidence of payment of any applicable transfer taxes or an
exemption from payment of any applicable taxes is not submitted with the
applicable letter of transmittal, the amount of the transfer taxes will be
billed directly to that tendering holder and the exchange agent will retain
possession of an amount of new notes with a face amount at least equal to the
amount of the transfer taxes due pending receipt by the exchange agent of the
amount of the taxes due.
Consequences of Failure to Exchange
If you do not exchange your outstanding notes for new notes under the
exchange offers, your notes will remain subject to the existing restrictions on
transfer of the outstanding notes. In general, you may not offer or sell your
outstanding notes unless they are registered under the Securities Act or the
offer or sale of the outstanding notes is exempt from registration under the
Securities Act and applicable state securities laws. Except as required by the
registration rights agreement, we do not intend to register resales of the
outstanding notes under the Securities Act. Based on interpretations of the SEC
staff, you may offer for resale, or may resell or otherwise transfer new notes
issued in the exchange offers without compliance with the registration and
prospectus delivery provisions of the Securities Act, if you:
. are not our "affiliate" within the meaning of Rule 405 under the
Securities Act;
. acquired the new notes in the ordinary course of their business; and
. have no arrangement or understanding with respect to the distribution of
the new notes to be acquired in the exchange offers.
If you tender in an exchange offer for the purpose of participating in a
distribution of the new notes, you both:
. cannot rely on the applicable interpretations of the SEC; and
. must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
Accounting Treatment
We will not recognize a gain or loss for accounting purposes upon the
consummation of any of the exchange offers. We will amortize expenses of each
of the exchange offers over the terms of the respective new notes under
generally accepted accounting principles.
Other
Participation in the exchange offers is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decision on what action to take.
39
<PAGE>
We may, in the future, seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. We have no present plans to acquire any outstanding notes that
are not tendered in the exchange offers or to file a registration statement to
permit resales of any untendered outstanding notes.
Use of Proceeds
We will not receive any cash proceeds from the issuance of the new notes. In
consideration for issuing the new notes, we will receive in exchange a like
principal amount of outstanding notes. The outstanding notes surrendered in
exchange for the new notes will be retired and canceled and cannot be re-
issued. Accordingly, the issuance of the new notes will not result in any
change in our capitalization.
We used the net proceeds from the May 1999 sale of the outstanding notes,
together with the net proceeds from our May 1999 offering of common stock and
new borrowings under the credit facility, to repay in full the $3.25 billion
outstanding under term loan C and term loan D of the credit facility and to
partially repay amounts outstanding under term loan A of our credit facility.
40
<PAGE>
Capitalization
The following table shows the capitalization of Lyondell as of March 31,
1999 on an historical basis and as adjusted to reflect the May 1999 sale of the
outstanding notes, together with the concurrent offering of common stock and
borrowings under the credit facility, and the application of the proceeds from
these activities.
You should read this table in conjunction with "Use of Proceeds,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the financial statements and the related notes and other financial
and operating data included elsewhere in this prospectus.
<TABLE>
<CAPTION>
As of
March 31, 1999
-------------------
Actual As Adjusted
------ -----------
(dollars in
millions)
<S> <C> <C>
Cash and cash equivalents................................. $ 260 $ 260
====== ======
Debt, including current maturities of long-term debt (a):
Secured debt
Credit facility (b)................................... $6,288 $3,258
Senior Secured Notes.................................. -- 1,900
Debentures (c)........................................ 624 624
Senior Subordinated Notes............................... -- 500
Other debt.............................................. 5 5
------ ------
Total debt, including current maturities of long-term
debt................................................. 6,917 6,287
------ ------
Minority interest......................................... 190 190
------ ------
Stockholders' equity:
Common stock, 250,000,000 shares authorized; 80,000,000
issued (historical); 120,250,000 issued pro forma as
adjusted............................................... 80 120
Additional paid-in capital.............................. 158 854
Retained earnings....................................... 372 339 (d)
Accumulated comprehensive income........................ (14) (14)
Treasury stock, at cost, 2,934,558 shares............... (82) (82)
------ ------
Total stockholders' equity............................ 514 1,217
------ ------
Total capitalization...................................... $7,621 $7,694
====== ======
</TABLE>
- --------
(a) Does not include $3.1 billion in joint venture debt as of March 31, 1998,
$713 million of which is Equistar debt for which Lyondell remains
contingently liable.
(b) The decrease reflects application of proceeds net of credit facility
amendment fees and debt issuance costs aggregating $106 million. As of
March 31, 1999, debt under the credit facility was secured by a pledge of
subsidiary stock and a pledge of Lyondell's rights to distributions from
some existing joint ventures. Lyondell granted additional security in
connection with the credit facility amendments in May 1999.
(c) Debentures were not secured as of March 31, 1999, but were secured at the
time the credit facility amendments became effective in May 1999.
(d) The decrease reflects write-offs of the deferred debt issuance costs and
credit facility amendment fees, net of tax.
41
<PAGE>
Unaudited Pro Forma Financial Statements
The unaudited pro forma balance sheet shown below gives effect to all of the
following:
. the May 1999 refinancing of $3.4 billion of debt under the credit
facility through the gross proceeds of the borrowing of an $850 million
term loan E and a $150 million term loan F under the credit facility and
the sale of the outstanding notes;
. the May 1999 offering of 40,250,000 shares of common stock at an offering
price of $19 per share and the application of the net proceeds to reduce
amounts outstanding under the credit facility; and
. the amended terms of the credit facility;
as if the transactions were completed as of March 31, 1999.
The unaudited pro forma income statements for the periods ended March 31,
1999, March 31, 1998 and December 31, 1998 shown below give effect to the
transactions described above in addition to all of the following:
. the acquisition of Lyondell Worldwide in a transaction accounted for as a
purchase;
. the repayment of a $345 million note payable to Equistar; and
. the repayment of some other debt of Lyondell and Lyondell Worldwide;
as if all the transactions were completed as of January 1, 1998.
The unaudited pro forma financial statements do not necessarily reflect the
results of operations or financial position of Lyondell that would have
resulted had the transactions above actually been consummated as of the dates
specified. Also, they are not necessarily indicative of the future results of
operations or future financial position of Lyondell.
You should read the unaudited pro forma financial statements in conjunction
with the historical financial statements and notes of Lyondell and its joint
ventures which are included in this prospectus and incorporated by reference to
Lyondell's annual report on Form 10-K for the year ended December 31, 1998 and
quarterly report on Form 10-Q for the quarterly period ended March 31, 1999.
42
<PAGE>
Lyondell Chemical Company
Unaudited Pro Forma Balance Sheet
As of March 31, 1999
<TABLE>
<CAPTION>
Actual Pro forma
Lyondell Adjustments Lyondell
-------- ----------- ---------
(dollars in millions)
<S> <C> <C> <C>
Cash and cash equivalents..................... $ 260 $ 260
Accounts receivable, net...................... 434 434
Inventories................................... 516 516
Prepaid expenses and other current assets..... 17 17
------ ------- ------
Total current assets...................... 1,227 1,227
Property, plant and equipment, net............ 4,430 4,430
Investments and long-term receivables......... 1,066 1,066
Deferred charges and other assets............. 874 $ (46)(a)
119 (b) 947
Goodwill...................................... 1,421 1,421
------ ------- ------
Total assets.............................. $9,018 $ 73 $9,091
====== ======= ======
Accounts payable.............................. $ 194 $ 194
Current maturities of long-term debt.......... 1,694 $(1,685)(c)
10 (d) 19
Other accrued liabilities..................... 391 391
------ ------- ------
Total current liabilities................. 2,279 (1,675) 604
Long-term debt, less current maturities....... 5,223 3,390 (d)
(2,345)(c) 6,268
Other liabilities and deferred credits........ 398 398
Deferred income taxes......................... 414 414
Minority interest............................. 190 190
Stockholders' equity
Common stock, 250,000,000 shares authorized;
80,000,000 issued (historical); 120,250,000
issued pro forma as adjusted............... 80 40 (e) 120
Additional paid-in capital.................. 158 696 (e) 854
Retained earnings........................... 372 (33)(a) 339
Accumulated comprehensive income............ (14) (14)
Treasury stock, at cost, 2,934,558 shares... (82) (82)
------ ------- ------
Total stockholders' equity................ 514 703 1,217
------ ------- ------
Total liabilities and stockholders'
equity................................... $9,018 $ 73 $9,091
====== ======= ======
</TABLE>
See notes to Unaudited Pro Forma Financial Statements.
43
<PAGE>
Lyondell Chemical Company
Unaudited Pro Forma Income Statement
For the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Actual Refinancing Pro forma
Lyondell adjustments Lyondell
-------- ----------- ---------
(dollars in millions,
except per share amounts)
<S> <C> <C> <C>
Sales and other operating revenues............ $ 855 $ 855
Operating costs and expenses:
Cost of sales............................... 630 630
Amortization of goodwill and other
intangibles................................ 24 24
Selling, general and administrative, and
research and development expenses.......... 72 72
------ ---- -------
Operating income.............................. 129 129
Interest expense.............................. (146) $(91)(f)
76 (g)
10 (h)
(3)(i) (154)
Interest income............................... 6 6
Other income (expense), net................... (7) (7)
Income from equity investments................ 21 21
------ ---- -------
Income before income taxes and extraordinary
items........................................ 3 (8) (5)
Provision for income taxes.................... 1 (3)(j) (2)
------ ---- -------
Income before extraordinary items............. $ 2 $ (5) $ (3)
====== ==== =======
Basic and diluted income before extraordinary
items per common share....................... $ 0.02 $ (0.02)
Basic and diluted weighted average shares
outstanding (in thousands)................... 77,072 117,322(e)
</TABLE>
See notes to Unaudited Pro Forma Financial Statements.
44
<PAGE>
Lyondell Chemical Company
Unaudited Pro Forma Income Statement
For the Three Months Ended March 31, 1998
<TABLE>
<CAPTION>
Lyondell Pro forma
Worldwide combined
(formerly ARCO Lyondell
Chemical Company) and Pro
Actual through Acquisition Lyondell Refinancing forma
Lyondell March 31, 1998 adjustments Worldwide adjustments Lyondell
-------- ----------------- ----------- --------- ----------- --------
(dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Sales and other
operating revenues..... $ -- $934 $ 934 $ 934
Operating costs and
expenses:
Cost of sales......... -- 722 $ (2)(k) 720 720
Amortization of
goodwill and other
intangibles.......... -- -- 20 (l) 20 20
Selling, general and
administrative, and
research and
development
expenses............. 6 67 73 73
Net unusual charges... 4 -- 4 4
------ ---- ----- ------ -------
Operating income........ (10) 145 (18) 117 117
Interest expense........ (7) (18) 25 (m) $(91)(f)
(139)(n) 76 (g)
(14)(o) (153) 10 (h)
(3)(i) (161)
Interest income......... 4 6 10 10
Other income, net....... -- 2 2 2
Income from equity
investments............ 117 -- 117 117
------ ---- ----- ------ ---- -------
Income before income
taxes and extraordinary
items.................. 104 135 (146) 93 (8) 85
Provision for income
taxes.................. 39 43 (44)(j) 38 (3)(j) 35
------ ---- ----- ------ ---- -------
Income before
extraordinary items.... $ 65 $ 92 $(102) $ 55 $ (5) $ 50 (j)(p)
====== ==== ===== ====== ==== =======
Basic and diluted income
before extraordinary
items per common
share.................. $ 0.82 (q) $ 0.69 (q) $ 0.42 (q)
Basic weighted average
shares outstanding (in
thousands)............. 78,713 78,713 118,963 (e)
Diluted weighted average
shares outstanding (in
thousands)............. 78,789 78,789 119,039 (e)
</TABLE>
See notes to Unaudited Pro Forma Financial Statements.
45
<PAGE>
Lyondell Chemical Company
Unaudited Pro Forma Income Statement
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Lyondell Pro forma
Worldwide combined
(formerly ARCO Lyondell
Chemical Company) and Pro
Actual through Acquisition Lyondell Refinancing forma
Lyondell July 31, 1998 adjustments Worldwide adjustments Lyondell
-------- ----------------- ----------- --------- ----------- --------
(dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Sales and other
operating revenues..... $1,447 $2,106 $3,553 $ 3,553
Operating costs and
expenses:
Cost of sales......... 1,089 1,584 $ (5)(k) 2,668 2,668
Amortization of
goodwill and other
intangibles.......... 41 16 48 (l)
(1)(r) 104 104
Selling, general and
administrative, and
research and
development
expenses............. 152 192 344 344
Net unusual charges... 61 (20) 41 41
------ ------ ----- ------ -------
Operating income........ 104 334 (42) 396 396
Interest expense........ (287) (45) 65 (m) $(364)(f)
(326)(n) 303 (g)
(31)(o) (624) 42 (h)
(11)(i) (654)(p)
Interest income......... 25 8 33 33
Other income, net....... 12 20 32 32
Income from equity
investments............ 235 -- 235 235
------ ------ ----- ------ ----- -------
Income before income
taxes and extraordinary
items.................. 89 317 (334) 72 (30) 42
Provision for income
taxes.................. 37 93 (100)(j) 30 (13)(j) 17
------ ------ ----- ------ ----- -------
Income before
extraordinary items.... $ 52 $ 224 $(234) $ 42 $ (17) $ 25 (p)
====== ====== ===== ====== ===== =======
Basic and diluted income
before extraordinary
items per common
share.................. $ 0.67 (q) $ 0.54 (q) $ 0.21 (q)
Basic weighted average
shares outstanding (in
thousands)............. 77,669 77,669 117,919 (e)
Diluted weighted average
shares outstanding (in
thousands)............. 77,699 77,699 117,949 (e)
</TABLE>
See notes to Unaudited Pro Forma Financial Statements.
46
<PAGE>
Lyondell Chemical Company
Notes to Unaudited Pro Forma Financial Statements
(a) To reflect the write-off of deferred debt issuance costs and credit
facility amendment fees of term loan C and term loan D and the partial
write-off of deferred debt issuance costs and credit facility amendment
fees of term loan A, offset by the impact of deferred taxes.
(b) To reflect payment and capitalization of debt issuance costs and credit
facility amendment fees. Payments were made from proceeds of debt and
equity offerings.
(c) To reflect the repayment of term loan C and term loan D and the partial
repayment of term loan A with net proceeds from the sales of common stock
and Senior Secured Notes and Senior Subordinated Notes and the borrowing of
term loan E and term loan F.
(d) To reflect the sale of Senior Secured Notes and Senior Subordinated Notes
and the borrowing of term loan E and term loan F.
(e) To reflect issuance of 40,250,000 shares of common stock at $19 per share
less underwriting discounts.
(f) To reflect interest expense related to the sale of $900 million of 9 5/8%
Senior Secured Notes, Series A, $1.0 billion of 9 7/8% Senior Secured
Notes, Series B, and $500 million of 10 7/8% Senior Subordinated Notes, the
borrowing of a $850 million term loan E and a $150 million term loan F and
a 1.25% increase in the interest rate on the remaining portions of term
loan A and term loan B. The impact of an increase in the LIBOR rate of 1/8
of 1% would be to increase pro forma interest expense by approximately $4
million for the year ended December 31, 1998 and $1 million each for the
three months ended March 31, 1998 and 1999.
(g) To reflect elimination of interest expense as a result of repayment of term
loan C and term loan D and the partial repayment of term loan A.
(h) To eliminate amortization expense of debt issuance costs due to repayment
of term loan C and term loan D and the partial repayment of term loan A.
(i) To reflect amortization expense resulting from $89 million in debt issuance
costs amortized over the life of the notes and term loan E and term loan F
and a $17 million credit facility amendment fee amortized over the life of
the credit facility, as amended.
(j) To reflect the tax effect of the pro forma adjustments and to adjust the
tax provision to Lyondell's estimated income tax rate of 41.5% for the
periods presented. State income tax is the primary difference between the
estimated tax rate and the 35% federal statutory rate.
(k) To adjust depreciation expense for the estimated fair value of the acquired
Lyondell Worldwide property, plant and equipment over an average useful
life of 25 years. The purchase price allocation is preliminary. Lyondell is
awaiting additional information related to the fair value of some assets
acquired and liabilities assumed. Management does not expect the final
determination of these matters to have a material effect on the purchase
price allocation.
(l) To reflect amortization of goodwill and additional amortization expense for
the estimated increase in other intangibles over periods ranging from four
to 40 years.
(m) To reflect elimination of the historical Lyondell and Lyondell Worldwide
interest expense.
(n) To reflect interest expense related to the issuance of the $2 billion term
loan A, $1.25 billion term loan C and $2 billion term loan D, each at LIBOR
plus 2%, combined with the historical interest expense on the $624 million
Lyondell Worldwide debentures. LIBOR was 5.5% for the periods presented.
(o) To reflect amortization expense resulting from $129 million in debt
issuance costs from financings under the credit facility over periods
ranging from one to seven years.
(p) The unaudited pro forma income statement does not reflect a $50 million
extraordinary charge, net of tax, related to repayment of term loan C and
term loan D and the partial repayment of term loan A. The extraordinary
charge represents the write-off of unamortized debt issuance costs and
credit facility amendment fees related to the portion of the debt being
repaid.
47
<PAGE>
(q) Net unusual charges in 1998 include a $20 million reversal of a charge
related to the restructuring and the asset reviews by Lyondell Worldwide,
$57 million write-off of in-process research and development costs, $19
million related to the formation of Equistar and $6 million for Lyondell's
share of the LYONDELL-CITGO Refining unusual charge related to a
renegotiation of a labor agreement. Net unusual charges for the three
months ended March 31, 1998 include $7 million related to the formation of
Equistar. Basic and diluted earnings per share before the effects of the
net unusual charges, net of tax, on both a historical and pro forma basis
are as follows:
<TABLE>
<S> <C>
Three Months Ended March 31, 1998--Historical...................... $0.88
Three Months Ended March 31, 1998--Pro Forma Combined.............. $0.75
Three Months Ended March 31, 1998--Pro Forma for the Refinancing... $0.45
Year ended December 31, 1998--Historical........................... $1.29
Year ended December 31, 1998--Pro Forma Combined................... $1.01
Year ended December 31, 1998--Pro Forma for the Refinancing........ $0.52
</TABLE>
(r) To eliminate Lyondell Worldwide historical goodwill amortization.
48
<PAGE>
Selected Historical Financial Data
The following tables show selected historical financial data for Lyondell
and Lyondell Worldwide. These data have been derived from the audited financial
statements of Lyondell and Lyondell Worldwide. You should read these data in
conjunction with Lyondell and Lyondell Worldwide financial statements and the
notes to those statements, and the other financial and operating data included
elsewhere in this prospectus, and incorporated by reference to Lyondell's
annual report on Form 10-K for the year ended December 31, 1998 and quarterly
report on Form 10-Q for the quarterly period ended March 31, 1999.
Historical Lyondell Chemical Company
<TABLE>
<CAPTION>
For the three
months ended
For the year ended December 31, March 31,
------------------------------------------- ---------------
1994(a) 1995(a) 1996(b) 1997(c) 1998(d) 1998(e) 1999
------- ------- ------- ------- ------- ------- ------
(dollars in millions, except per share amounts and
ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Income statement data:
Sales and other
operating revenues..... $3,857 $4,936 $5,052 $2,878 $1,447 $ -- $ 855
Gain on sale of assets.. -- -- 30 -- -- -- --
------ ------ ------ ------ ------ ------ ------
3,857 4,936 5,082 2,878 1,447 -- 855
Cost of sales........... 3,296 4,026 4,570 2,250 1,089 -- 630
Selling, general and
administrative, and
research and
development expenses... 137 204 234 186 152 6 72
Amortization of goodwill
and other intangible
assets................. -- -- -- -- 41 -- 24
Unusual charges......... -- -- -- 24 61 4 --
------ ------ ------ ------ ------ ------ ------
Operating income
(loss)................. 424 706 278 418 104 (10) 129
Interest expense........ (74) (80) (81) (75) (287) (7) (146)
Interest income......... 5 6 3 14 25 4 6
Other income (expense),
net.................... (6) (14) (4) (17) 12 -- (7)
Income from equity
investments............ -- -- -- 116 235 117 21
------ ------ ------ ------ ------ ------ ------
Income before income
taxes.................. 349 618 196 456 89 104 3
Provision for income
taxes.................. 126 229 70 170 37 39 1
------ ------ ------ ------ ------ ------ ------
Net income.............. $ 223 $ 389 $ 126 $ 286 $ 52 $ 65 $ 2
====== ====== ====== ====== ====== ====== ======
Earnings per share--
basic and diluted...... $ 2.78 $ 4.86 $ 1.58 $ 3.58 $ .67 $ .82 $ .02
Weighted average common
shares outstanding (in
thousands):
Basic................... 80,000 80,000 80,000 79,796 77,669 78,713 77,072
Diluted................. 80,061 80,072 80,045 79,813 77,699 78,789 77,072
Other data:
Depreciation and
amortization(f)........ $ 65 $ 86 $ 110 $ 84 $ 138 -- 85
Capital
expenditures(g)........ 252 982 609 49 64 -- 32
Ratio of earnings to
fixed charges.......... 4.8x 6.8x 2.2x 4.6x 1.2x 3.9x 1.0x
Balance sheet data:
Total assets............ $1,663 $2,606 $3,276 $1,559 $9,225 $1,397 $9,018
Total debt(h)(i)........ 737 1,060 1,366 445 6,994 395 6,917
Total stockholders'
equity................. 63 380 431 619 574 652 514
</TABLE>
See notes to Selected Historical Financial Data.
49
<PAGE>
Historical Lyondell Worldwide
(formerly ARCO Chemical Company)
<TABLE>
<CAPTION>
For the year ended December
31,
------------------------------
1994 1995 1996 1997
------ ------ ------ ------
(dollars in millions,
except ratios)
<S> <C> <C> <C> <C>
Income statement data:
Sales and other operating revenues............ $3,423 $4,282 $3,955 $3,995
Cost of sales................................. 2,586 3,102 3,067 3,230
Selling, general and administrative, and
research and development expenses............ 332 357 348 334
Unusual charges............................... 30 -- -- 175
------ ------ ------ ------
Operating income.............................. 475 823 540 256
Interest expense.............................. (85) (89) (86) (80)
Interest income............................... 8 16 25 10
Other income (expense), net................... 18 6 8 (18)
Income before income taxes.................... 416 756 487 168
Provision for income taxes.................... 147 248 139 57
------ ------ ------ ------
Net income(j)................................. $ 269 $ 508 $ 348 $ 111
====== ====== ====== ======
Other operating data:
Depreciation and amortization................. $ 235 $ 233 $ 222 $ 229
Capital expenditures.......................... 186 195 244 263
Ratio of earnings to fixed charges............ 4.8x 7.6x 5.2x 2.4x
Balance sheet data:
Total assets.................................. $3,737 $4,135 $4,394 $4,116
Total debt(h)................................. 936 912 1,019 913
Total stockholders' equity.................... 1,659 1,969 2,014 1,793
</TABLE>
See notes to Selected Historical Financial Data.
50
<PAGE>
Notes to Selected Historical Financial Data
(a) Financial information for 1994 and 1995 includes 12 months of operating
results for LYONDELL-CITGO Refining on a consolidated basis.
(b) Financial information for 1996 includes 12 months of operating results for
LYONDELL-CITGO Refining and one month of operating results for Lyondell
Methanol, each accounted for on a consolidated basis.
(c) Financial information for 1997 includes 12 months of operating results for
Lyondell Methanol on a consolidated basis. It also includes 12 months of
operating results for LYONDELL-CITGO Refining and one month of operating
results for Equistar, each accounted for as an equity investment.
(d) Financial information for 1998 includes 5 months of operating results for
Lyondell Worldwide on a consolidated basis. It also includes 12 months of
operating results for Equistar, LYONDELL-CITGO Refining and Lyondell
Methanol, each accounted for as an equity investment.
(e) Financial information for the three months ended March 31, 1998 is before
the acquisition of Lyondell Worldwide which occurred in July 1998.
(f) Includes amortization of debt issuance costs of $23 million for 1998 and
$14 million for the three months ended March 31, 1999.
(g) Includes $135 million in 1994, $458 million in 1995, $473 million in 1996
and $45 million in 1997 for the upgrade project at LYONDELL-CITGO Refining,
primarily funded by CITGO and non-recourse debt. Includes $356 million in
1995 for the acquisition of the Alathon(TM) high density polyethylene
business.
(h) Total debt represents long-term debt, notes payable and current maturities
of long-term debt.
(i) Does not include $3.1 billion in joint venture debt as of March 31, 1999,
$713 million of which is Equistar debt for which Lyondell remains
contingently liable.
(j) Net income in 1997 includes an after-tax charge of $116 million for costs
related to a restructuring program and asset reviews.
51
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion is a description of Lyondell's business affairs
that we believe are material at this time. You should read it in conjunction
with the financial statements of Lyondell, Equistar and LYONDELL-CITGO Refining
and the notes to those statements included in this prospectus and incorporated
by reference to Lyondell's annual report on Form 10-K for the year ended
December 31, 1998 and quarterly report on Form 10-Q for the period ended March
31, 1999.
General
Lyondell operates in the intermediate chemicals and derivatives segment and,
through its interests in Equistar, LYONDELL-CITGO Refining and Lyondell
Methanol, operates in the petrochemicals, polymers, refining and methanol
segments. Lyondell accounts for its investments in Equistar, LYONDELL-CITGO
Refining and Lyondell Methanol using the equity method of accounting. During
the third quarter of 1998, Lyondell acquired all of the outstanding shares of
ARCO Chemical Company, now Lyondell Worldwide. Lyondell Worldwide is treated as
a separate business segment, the intermediate chemicals and derivatives
segment. Lyondell obtained its credit facility to finance the acquisition,
paying $5.6 billion for the Lyondell Worldwide stock and assuming approximately
$870 million of Lyondell Worldwide debt, net of cash.
The following chart shows the revenues for Lyondell and the revenues, equity
percentage owned by Lyondell and the accounting method used for each of
Lyondell's businesses for the periods indicated.
Structure of Lyondell
<TABLE>
<CAPTION>
Three months
Year ended December 31, ended
----------------------------------------- March 31,
1996 1997 1998 1999
------------- ------------- ------------- -------------
(dollars in millions, except equity investment
percentages)
<S> <C> <C> <C> <C>
Lyondell
Revenues................ $5,052(a) $2,878(b) $1,447(c) $ 855
Lyondell Worldwide
Revenues................ $3,955(d) $3,995(d) $3,553(e) $ 855
Percentage of equity
owned by Lyondell at
period end............. -- -- 100% 100%
Method of accounting.... N/A N/A Consolidation Consolidation
Equistar(f)
Revenues................ N/A $ 365 $4,363 $1,104
Percentage of equity
owned by Lyondell at
period end............. N/A 57% 41% 41%
Method of accounting.... N/A Equity Equity Equity
LYONDELL-CITGO Refining
Revenues................ $2,816 $2,695 $2,055 $ 432
Percentage of equity
owned by Lyondell at
period end............. 86.44% 58.49% 58.75% 58.75%
Method of accounting.... Consolidation Equity Equity Equity
Lyondell Methanol(g)
Revenues................ $ 14 $ 165 $ 104 $ 11
Percentage of equity
owned by Lyondell at
period end............. 75% 75% 75% 75%
Method of accounting.... Consolidation Consolidation Equity Equity
</TABLE>
- --------
(a) Revenues for 1996 are before the contribution of assets to Equistar. They
include 12 months of operating revenues for LYONDELL-CITGO Refining and one
month of operating revenues for Lyondell Methanol, each accounted for on a
consolidated basis.
52
<PAGE>
(b) Revenues for 1997 include 12 months of operating revenues for Lyondell
Methanol on a consolidated basis. The first 11 months of revenues for 1997
are before the contribution of assets to Equistar. Revenues for 1997
include 12 months of operating revenues for LYONDELL-CITGO Refining and one
month of operating revenues for Equistar, each accounted for as an equity
investment.
(c) Revenues for 1998 include 5 months of operating revenues for Lyondell
Worldwide on a consolidated basis. Revenues exclude 12 months of operating
revenues for Equistar, LYONDELL-CITGO Refining and Lyondell Methanol, each
accounted for as an equity investment.
(d) Lyondell Worldwide was purchased by Lyondell in July 1998. Information
presented for the periods above for Lyondell Worldwide represents the
results of operations of Lyondell Worldwide on a historical basis.
(e) Pro forma revenues of Lyondell Worldwide for the year ended December 31,
1998. For more information, see the Unaudited Pro Forma Financial
Statements and the accompanying notes included in this prospectus.
(f) Equistar was formed in December 1997 as a joint venture between Lyondell
and Millennium Chemicals Inc. Beginning May 15, 1998, the results of
operations of the Occidental assets are included in the information
presented above.
(g) Lyondell Methanol was formed in December 1996 by Lyondell and MCN
Investment Corporation to own and operate the methanol facility at
Equistar's Channelview, Texas facility.
Results of Operations
Lyondell's historical operating results reflect the cyclical and volatile
nature of both the chemical and refining industries. These industries have
historically experienced alternating periods of tight supply, causing price and
profit margins to increase, followed by periods of substantial capacity
additions, resulting in oversupply and declining prices and profit margins. The
chemical industry has experienced a downward trend since peaking in 1995.
Lyondell experienced earnings declines in 1998 compared to 1997 primarily
because of lower prices in both the chemicals and refining industries. Lyondell
believes that consecutive-period comparisons are useful in illustrating the
cyclical movement of the industries in which Lyondell and its joint ventures
operate.
First Quarter 1999 Compared to Fourth Quarter 1998
For the first quarter of 1999, Lyondell reported net income of $2 million
compared to a loss of $27 million for the fourth quarter of 1998. The fourth
quarter loss included unusual after-tax charges of $6 million primarily related
to a new labor agreement at LYONDELL-CITGO Refining and formation costs at
Equistar. The new labor agreement at LYONDELL-CITGO Refining is expected to
result in cost savings in the near term. The first quarter net income
improvement primarily reflected higher operating income in the intermediate
chemicals and derivatives segment and higher equity income from Equistar,
partly offset by lower equity income from LYONDELL-CITGO Refining.
Operating income of the intermediate chemicals and derivatives segment was
$129 million in the first quarter of 1999 compared to $97 million in the fourth
quarter of 1998. The improvement was primarily due to lower administrative and
acquisition-related transition costs. Income from equity investment in Equistar
increased to $13 million in the first quarter of 1999 compared to a loss of $11
million in the fourth quarter of 1998. Improved results for the petrochemicals
and polymers businesses of Equistar reflected a tighter supply/demand
situation, leading to higher prices and margins. LYONDELL-CITGO Refining equity
income decreased to $11 million in the first quarter of 1999 from $22 million
in the fourth quarter of 1998. LYONDELL-CITGO Refining operating results were
negatively affected by the impact of ongoing reduced allocations of Venezuelan
extra heavy crude oil, lower margins on crude oil purchased in the spot market
and lower crude oil processing rates.
53
<PAGE>
Intermediate Chemicals and Derivatives (Lyondell Worldwide)
The following table shows actual volumes for this segment, including styrene
monomer volumes processed under long-term processing arrangements, which are
included in sales and other operating revenues. The co-product TBA is
principally used to produce the derivative MTBE.
<TABLE>
<CAPTION>
Fourth Quarter First Quarter
1998 1999
-------------- -------------
(volumes in millions)
<S> <C> <C>
PO, PO derivatives, isocyanates (pounds)........... 1,077 1,080
Co-products:
Styrene monomer (pounds)........................... 819 782
TBA and derivatives (gallons)...................... 245 265
</TABLE>
Operating income was $129 million for the first quarter of 1999 compared to
$97 million for the fourth quarter of 1998. The improvement was primarily
attributable to lower administrative and acquisition-related transition costs
and the benefit of a seasonal increase in deicers sales volumes, partly offset
by lower PO merchant volumes and margins. Core product volumes, defined as PO,
PO derivatives and isocyanates, were flat as increased PO derivatives volumes,
primarily deicers, were offset by lower PO merchant volumes. PO merchant
volumes decreased due to reduced sales to PO co-producers and planned customer
downtime during the first quarter. PO margins declined as the market
anticipated industry capacity additions in Europe later in 1999. Styrene
monomer volumes decreased 5% in the first quarter of 1999 compared to the
fourth quarter of 1998 due to the timing of export shipments to Asia. TBA and
derivatives volumes increased 8% primarily due to higher MTBE volumes.
Petrochemicals and Polymers (Equistar)
Equistar reported income before federal income tax of $7 million in the
first quarter of 1999 compared to a pretax loss of $51 million for the fourth
quarter of 1998. The increase was primarily attributable to higher ethylene
prices and margins, reflecting a tighter supply/demand balance in the first
quarter of 1999. Polymers prices also improved but margin improvements were
limited by higher ethylene raw material costs. The fourth quarter of 1998 was
also negatively affected by charges related to Equistar's formation.
In February 1999, Equistar completed a $900 million offering of senior
unsecured notes. The proceeds were used to refinance existing debt and capital
lease obligations of Equistar.
In May 1999, Equistar shut down both olefins units at its Channelview, Texas
facility due to a reoccurrence of a compressor problem in one unit and a heater
malfunction in the second unit. Both units resumed operations by the end of May
1999. Equistar expects that any financial impact related to these temporary
shutdowns will be limited by property damage insurance and business
interruption insurance.
Refining (LYONDELL-CITGO Refining)
LYONDELL-CITGO Refining had income before federal income tax of $15 million
in the first quarter of 1999 compared to $42 million, before unusual charges,
in the fourth quarter of 1998. The unusual charge of $10 million in the fourth
quarter was related to a new labor agreement. LYONDELL-CITGO Refining operating
results were negatively affected by the impact of ongoing reduced allocations
of Venezuelan extra heavy crude oil, lower margins on crude oil purchased in
the spot market and lower crude oil processing rates. Total crude oil
processing rates averaged 255,000 barrels per day in the first quarter of 1999
compared to 273,000 barrels per day in the fourth quarter of 1998. LYONDELL-
CITGO Refining reduced crude oil processing rates in the first quarter of 1999
due to declining margins on crude oil purchased in the spot market.
LYONDELL-CITGO Refining's financial results continue to be impacted by
reductions in PDVSA crude oil allocations, which began in August 1998 and
continued following a March 1999 OPEC agreement to further
54
<PAGE>
limit oil production. Reduced allocations of crude oil supplied by PDVSA force
LYONDELL-CITGO Refining to purchase a portion of its crude oil in the spot
market, thereby reducing LYONDELL-CITGO Refining's pretax income and,
accordingly, Lyondell's pro rata share of LYONDELL-CITGO Refining's income.
Even though LYONDELL-CITGO Refining may continue to receive a reduced crude oil
allocation from PDVSA, LYONDELL-CITGO Refining has begun to see some
improvement in the spot margins for crude oil.
On May 3, 1999, LYONDELL-CITGO Refining shut down a fluid catalytic cracker
with a capacity of 92,000 barrels per day as a result of a malfunction that
damaged the main air blower. The unit resumed operations in late May 1999. On
May 7, 1999, LYONDELL-CITGO Refining shut down one of two coker units following
a fire. LYONDELL-CITGO Refining estimates that the damaged coker will resume
full operations by early July 1999. As a result of these incidents, crude oil
processing rates have been reduced. LYONDELL-CITGO Refining is currently
putting Venezuelan crude oil into inventory and expects to benefit from higher
processing rates once repairs have been completed. To the extent the business
interruption impact and the cost of repairs exceed insurance deductibles of $10
million each, per incident, Lyondell expects any excess cost to be covered by
insurance.
First Quarter of 1999 Compared to First Quarter of 1998
Intermediate Chemicals and Derivatives (Lyondell Worldwide)
Net income. Net income of $2 million in the first quarter of 1999 decreased
from $65 million in the first quarter of 1998. Pretax income from equity
investments decreased $96 million, or about $61 million after tax, in the first
quarter of 1999 compared to the first quarter of 1998. Operating income of
Lyondell Worldwide in the first quarter of 1999 was more than offset by higher
interest expense related to Lyondell's credit facility.
Revenues, Operating Costs and Expenses. The revenues and operating costs and
expenses for the first quarter of 1999 primarily consist of the operating
results of Lyondell Worldwide, which are included prospectively from August 1,
1998. The first quarter of 1998 includes only Lyondell's administrative
expenses. Income from Lyondell's interests in Equistar, LYONDELL-CITGO Refining
and Lyondell Methanol is reported as income from equity investments.
Income from Equity Investments. Income from equity investments decreased
substantially from $117 million in the first quarter of 1998 to $21 million in
the first quarter of 1999.
Lyondell's income from its equity investment in Equistar was $13 million in
the first quarter of 1999 compared to $76 million for the first quarter of
1998. The decrease was attributable to substantially lower ethylene and
polymers prices and margins in the first quarter of 1999 compared with the same
period for 1998, reflecting ongoing excess industry capacity. The first quarter
of 1999 benefit from the addition of the Occidental assets in May 1998 was
substantially offset by costs associated with the LaPorte, Texas plant
maintenance and operating problems at two of Equistar's plants in the first
quarter of 1999.
Lyondell's income from its equity investment in LYONDELL-CITGO Refining was
$11 million in the first quarter of 1999 compared to $35 million for the first
quarter of 1998. The decline was primarily due to reduced allocations of extra
heavy Venezuelan crude oil under the LYONDELL-CITGO Refining crude supply
agreement.
Interest Expense. Interest expense was $146 million in the first quarter of
1999 compared to $7 million in the first quarter of 1998. The increase reflects
higher debt levels as a result of amounts borrowed under Lyondell's credit
facility and debt assumed as part of the acquisition of Lyondell Worldwide.
55
<PAGE>
Petrochemicals and Polymers (Equistar)
Revenues. Petrochemical revenues for the first quarter of 1999 increased
compared to the first quarter of 1998, primarily due to increased sales volumes
as a result of the addition of the Occidental assets in May 1998. This increase
was partially offset by lower industry sales prices for ethylene, propylene and
co-products. The decrease in industry sales prices is primarily attributable to
ongoing excess industry capacity and downward pressure from raw materials
costs, which declined throughout 1998. The sales price decreases began in the
fourth quarter of 1997 and continued their downward trend through most of 1998.
U.S. market sales prices increased during the first quarter of 1999, but
average prices in the first quarter of 1999 were still lower compared to the
first quarter of 1998.
Polymers revenues decreased in the first quarter of 1999 compared to the
first quarter of 1998 as a result of decreases in industry sales prices, partly
offset by a 6% increase in volumes. The sales price decreases reflect excess
industry supply, as industry capacity additions exceeded demand growth, and
downward pressure from raw materials costs, which declined throughout 1998. The
decreases in sales prices started during the fourth quarter of 1997 and
continued in a downward trend through 1998. Industry prices increased during
the first quarter of 1999, however average first quarter of 1999 prices were
significantly lower than the first quarter of 1998. The volume increase
reflects additional polyethylene capacity.
Operating Income. Petrochemicals operating income decreased in the first
quarter of 1999 compared to the first quarter of 1998 primarily due to lower
product margins, as industry sales prices declined more than raw materials
costs, and the effects of the LaPorte plant maintenance in the 1999 period.
These were partly offset by the benefit of increased volumes as a result of the
addition of the Occidental assets in May 1998.
Polymers operating income for the first quarter of 1999 decreased compared
to first quarter of 1998 primarily due to decreases in polymers sales prices,
which more than offset decreases in polymers raw materials costs, reducing
product margins.
Interest expense. Interest expense increased from $32 million in the first
quarter of 1998 to $43 million in the first quarter of 1999, primarily
reflecting higher levels of long-term debt due to the addition of the
Occidental assets in May 1998.
Refining (LYONDELL-CITGO Refining)
Revenues. Revenues for LYONDELL-CITGO Refining were $432 million in the
first quarter of 1999 compared to $529 million in the 1998 period. The decrease
primarily resulted from lower industry prices for refined products, partly
offset by a 7% increase in refined products volumes. Sales prices declined as a
result of lower industry crude oil prices in the first quarter of 1999 compared
to the 1998 period.
Operating Income. LYONDELL-CITGO Refining's operating income was $24 million
in the first quarter of 1999 compared to $65 million in the first quarter of
1998. The decrease primarily reflected the effects of reduced allocations of
extra heavy Venezuelan crude oil.
1998 Compared to 1997
Intermediate Chemicals and Derivatives (Lyondell Worldwide)
The following discussion compares Lyondell's pro forma 1998 results to pro
forma 1997 results. The pro forma adjustments give effect to:
. the Lyondell Worldwide acquisition and related debt financing which
occurred in July 1998;
. the formation of Equistar which occurred in December 1997; and
. the deconsolidation of Lyondell Methanol which occurred in January 1998
as if each occurred as of January 1, 1997 and 1998, respectively.
These pro forma adjustments are intended to facilitate a comparison of the
results of the intermediate chemicals and derivatives business. Although
Lyondell believes that the assumptions underlying these pro
56
<PAGE>
forma adjustments are reasonable and provide a reasonable basis for analyzing
changes in the intermediate chemicals and derivatives business from 1997 to
1998, the amounts presented below are not intended to reflect what the results
of operations of Lyondell and Lyondell Worldwide would have been had the
transactions reflected in the pro forma adjustments actually occurred as of the
dates given.
The following table shows sales volumes for the intermediate chemicals and
derivatives business:
<TABLE>
<CAPTION>
For the year
ended
December 31,
-------------
1997 1998
------ ------
(volumes in
millions)
<S> <C> <C>
PO, PO derivatives and TDI (pounds)............................... 4,135 4,159
Co-products:
Styrene monomer (pounds)........................................ 2,577 2,912
TBA and derivatives (gallons)................................... 1,054 995
</TABLE>
Revenues. Pro forma revenues of $3.6 billion for 1998 decreased 11% compared
to $4.0 billion for 1997. The decrease of $442 million was primarily due to
lower average sales prices in 1998, reflecting a combination of:
. downward pressure from lower raw materials costs;
. ongoing competition in PO derivatives and TDI markets;
. the negative effects of a stronger U.S. dollar on foreign sales; and
. the effects of weaker Asian markets.
PO and PO derivatives volumes were essentially flat in 1998 versus 1997 as
stronger demand for some PO derivatives in the United States and Europe was
offset by lower volumes in Asian markets. The increase in styrene monomer
volumes in 1998 was a result of the capacity expansion at the PO facility in
Channelview, Texas completed in the second quarter of 1998. The increased
capacity was dedicated to long-term styrene monomer processing arrangements.
TBA and derivatives volumes decreased 6% in 1998, mainly due to lower MTBE
demand.
Operating costs. Pro forma cost of sales of $2.7 billion for 1998 decreased
15% compared to $3.2 billion for 1997. The 15% decrease was greater than the
11% decrease in revenues, reflecting comparatively lower raw material prices.
Pro forma selling, general and administrative and research and development
expenses of $344 million for 1998 remained flat as compared to 1997.
Operating income. Pro forma operating income of $396 million for 1998
increased by 146% compared to $161 million for 1997. Operating income for 1998
reflected unusual charges of $41 million, primarily related to the write-off of
in-process research and development projects of Lyondell Worldwide and Equistar
formation costs. Operating income for 1997 reflected unusual charges of $191
million, primarily related to restructuring and other costs of Lyondell
Worldwide and Equistar formation costs. Excluding these items, operating income
of $437 million for 1998 increased by $85 million.
Net income. Pro forma net income of $42 million for 1998 increased 55%
compared to $27 million for 1997. Excluding the effects of the unusual charges
in both years, pro forma net income of $66 million for 1998 decreased $84
million compared to 1997 as lower equity income from the joint ventures more
than offset improved operating results and lower foreign exchange losses of
Lyondell Worldwide.
Petrochemicals and Polymers (Equistar)
The following discussion compares Equistar's actual 1998 results to combined
1997 results. The 1998 results include results attributable to the Occidental
assets contributed to Equistar from May 15, 1998, the date on which they were
contributed. The 1997 results have been prepared on a pro forma basis and
combine 11 months of the operations of the businesses contributed to Equistar
by Lyondell and Millennium Chemicals and
57
<PAGE>
one month of Equistar's actual operations. These pro forma adjustments are
intended to facilitate a comparison of the results of the petrochemicals and
polymers business. Although Lyondell believes that the assumptions underlying
these pro forma adjustments are reasonable and provide a reasonable basis for
analyzing changes in the Equistar business from 1997 to 1998, the amounts
presented below are not intended to reflect what the results of operations of
Equistar would have been had the transactions reflected in the pro forma
adjustments actually occurred as of the dates given and are not necessarily
indicative of future operations of Equistar.
Petrochemicals
Revenues. Petrochemicals revenues of $3.5 billion for 1998 decreased 10%
compared to combined 1997 revenues of $3.9 billion. The decrease is primarily
due to lower industry sales prices for ethylene, propylene and co-products,
partially offset by increased sales volumes as a result of the addition of the
Occidental assets in May 1998. The decrease in sales prices is primarily
attributable to increased industry capacity and downward pressure on sales
prices as a result of lower raw materials costs. The sales price decreases
began in the fourth quarter of 1997 and continued their downward trend through
most of 1998. Ethylene and propylene volumes were 16,716 million pounds in
1998, a 77% increase over combined volumes of 9,429 million pounds in 1997. The
increase in ethylene and propylene volumes is primarily a result of the
addition of the Occidental assets. Aromatics volumes were 271 million gallons
in 1998, a 40% increase over combined volumes of 193 million gallons in 1997.
The increase in aromatics volumes is primarily a result of the addition of the
Occidental assets.
Operating costs. Petrochemicals cost of sales of $3.1 billion for 1998
decreased 1% from $3.2 billion for combined 1997. This decrease was less than
the 10% decrease in revenues, reflecting the fact that raw materials prices
declined at a slower rate than petrochemicals product prices. Petrochemicals
selling expenses of $14 million for 1998 decreased 55% from $31 million for
1997. This decrease reflected lower personnel costs as a result of
consolidation of operations.
Operating income. Petrochemicals operating income of $319 million for 1998
decreased 53% compared to combined 1997 operating income of $684 million,
primarily due to lower product margins as sales prices declined more than raw
materials costs and, to a lesser extent, slightly higher fixed costs. The
decrease in operating income as a result of the lower margins was partially
offset by the addition of the Occidental assets in May 1998.
Polymers
Revenues. Polymers revenues of $2.1 billion for 1998 decreased 18% compared
to combined 1997 revenues of $2.5 billion as a result of decreases in industry
sales prices. These sales price decreases were a result of excess industry
supply and lower raw materials costs. The excess industry supply started during
the fourth quarter of 1997 and continued in a downward trend through 1998.
Polymers volumes were 6,488 million pounds in 1998, a 6% increase over combined
volumes of 6,132 million pounds in 1997. Volume increases were a result of
capacity additions at three facilities, as well as unscheduled industry
outages, in 1997.
Operating costs. Polymers cost of sales of $1.8 billion for 1998 decreased
16% from $2.1 billion for combined 1997. This decrease was less than the 18%
decrease in revenues, reflecting the fact that raw materials prices declined at
a slower rate than polymers product prices. Polymers selling expenses of $82
million for 1998 decreased 40% from $137 million for combined 1997. This
decrease primarily reflected lower personnel costs as a result of consolidation
of operations.
Operating income. Polymers operating income of $177 million for 1998
decreased 24% compared to combined 1997 operating income of $233 million. The
decrease is primarily due to decreases in polymers sales prices, which more
than offset decreases in polymers raw materials costs.
Restructuring Charges
Equistar's unusual charges, which are not allocated to either the
petrochemicals or polymers segments, were $42 million in 1997 and $35 million
in 1998. Both years included costs associated with the formation of
58
<PAGE>
Equistar and the consolidation of some operations. These costs were paid by
Equistar and allocated to the Equistar partners according to their ownership
percentages.
Refining (LYONDELL-CITGO Refining)
The following discussion compares LYONDELL-CITGO Refining's actual 1998
results to its actual 1997 results.
Increased processing capacity resulting from the upgrade project enabled
LYONDELL-CITGO Refining to increase its crude processing rates and produce
greater refined product volumes, as shown in the table below.
<TABLE>
<CAPTION>
Year ended
December 31,
--------------
1997 1998
------ ------
(barrels per
day in
thousands)
<S> <C> <C>
Crude processing rates:
Crude supply agreement--coked........................... 203 223
Other heavy crude oil--coked............................ 7 19
Other crude oil......................................... 14 18
------ ------
Total................................................. 224 260
====== ======
Refined product sales volumes:
Gasoline................................................ 111 121
Diesel and heating oil.................................. 68 79
Jet fuel................................................ 17 17
Aromatics............................................... 11 10
Other refined products.................................. 93 103
------ ------
Total................................................. 300 330
====== ======
</TABLE>
Revenues. Revenues for LYONDELL-CITGO Refining, including sales to
affiliates, of $2.1 billion for 1998 decreased 22% compared to $2.7 billion for
1997. The decrease primarily resulted from lower refined products prices, which
declined as a result of lower industry crude prices. These decreases were
partially offset by higher sales volumes as production levels increased,
reflecting a full year's benefit from the upgrade project.
Operating costs. LYONDELL-CITGO Refining's cost of sales of $1.8 billion for
1998 decreased 28% from $2.5 billion for 1997. The benefits of lower raw
material prices under the crude supply agreement were offset in part by the
lower allocations under that agreement, which began in August 1998 and required
LYONDELL-CITGO Refining to seek additional crude oil at higher prices in the
spot market. LYONDELL-CITGO Refining's selling, general and administrative
expenses of $78 million for 1998 increased 8% from $72 million for 1997. This
increase reflected increased coke handling charges and other selling costs
related to increased production and higher sales volumes.
Operating income. LYONDELL-CITGO Refining's operating income of $213 million
for 1998 increased 18% compared to $183 million for 1997. The increase
reflected the benefits of the upgrade project, which resulted in higher average
margins as higher volumes of extra heavy crude oil were processed in the coking
mode. The upgrade project was completed in the first quarter of 1997.
Initially, higher costs were incurred due to normal operational start-up
activities during which the refinery did not operate at peak rates. Cost
savings resulting from improved operational efficiency in 1998 were partly
offset by higher depreciation expense attributable to the upgrade project.
Interest expense. LYONDELL-CITGO Refining's net interest expense of $43
million for 1998 increased 23% compared to $35 million for 1997. Interest
expense on debt related to construction of the upgrade project was capitalized
through its completion, including the first quarter of 1997.
59
<PAGE>
Methanol (Lyondell Methanol)
Lyondell's share of Lyondell Methanol's earnings for 1998 was $6 million.
Lyondell would have recorded approximately $43 million for its share of
Lyondell Methanol's earnings had Lyondell followed the equity method of
accounting for its investment in Lyondell Methanol during 1997. The decrease
was due to significant declines in the sales prices of methanol beginning in
the first quarter of 1998. Increased supply due to new capacity, as well as
weaker demand from Asia, caused worldwide methanol price declines.
Liquidity and Capital Resources
Cash Flows
Operating activities. Lyondell's cash provided by operating activities
totaled $263 million for 1998, a 2% decrease compared to $269 million for 1997.
Cash provided by operating activities in 1998 included $160 million of proceeds
from the sale of domestic receivables in December 1998 under a three-year
revolving securitization agreement. Cash provided by operations in 1998 was
negatively affected by the payment of liabilities associated with the
acquisition of Lyondell Worldwide and the settlement of accounts payable
retained by Lyondell in the formation of Equistar in December 1997.
Investing activities. Lyondell completed the acquisition of Lyondell
Worldwide on July 28, 1998 for a total cost of approximately $5.9 billion,
excluding assumed debt. Lyondell made capital expenditures of $64 million in
1998, primarily related to Lyondell Worldwide. Equistar's 1998 capital
expenditures totaled $200 million, of which $88 million was Lyondell's pro rata
share. LYONDELL-CITGO Refining made 1998 capital expenditures of $61 million,
of which Lyondell funded $35 million through loans to LYONDELL-CITGO Refining.
Lyondell's 1999 capital budget is $273 million, including its $123 million pro
rata share of its joint ventures' capital budgets.
Distributions in excess of earnings for 1998 were $403 million by Equistar,
$20 million by LYONDELL-CITGO Refining and $12 million by Lyondell Methanol.
The $403 million excess distribution from Equistar includes $197 million
resulting from Lyondell's repayment of a $345 million note to Equistar.
Financing activities. Cash provided by financing activities was $5.4 billion
for 1998, compared to cash used in financing activities of $176 million for
1997. During the third quarter of 1998, Lyondell obtained its $7 billion credit
facility. Lyondell's $6.5 billion borrowing under the credit facility in
connection with the Lyondell Worldwide acquisition was used for:
. the purchase of all outstanding shares of Lyondell Worldwide stock;
. repayment of debt, including a $345 million note to Equistar and $283
million in other debt of Lyondell and Lyondell Worldwide; and
. payment of some debt issuance costs.
As part of the acquisition, Lyondell also assumed approximately $870 million of
Lyondell Worldwide debt.
Cash used in other financing activities in 1998 consisted primarily of $59
million used to repurchase Lyondell common stock. From time to time Lyondell
purchases its shares in the market to issue under Lyondell's employee
compensation and benefits plans, including stock option and restricted stock
plans. In addition, in the second quarter of 1998 Lyondell completed a stock
buyback program authorized in September 1997. A total of 2,567,051 shares were
purchased under the program for $75 million.
Lyondell paid regular quarterly dividends of $.225 per share of common stock
in 1998 and for the first quarter of 1999.
Debt
As of May 31, 1999, Lyondell had outstanding consolidated debt of $6.3
billion and equity of $1.2 billion. Substantially all of the debt was incurred
in July 1998 under the credit facility for the purpose of acquiring Lyondell
Worldwide or was assumed as part of the acquisition.
60
<PAGE>
In May 1999, Lyondell completed a partial refinancing of the debt under its
credit facility. The refinancing reduced consolidated debt by approximately
$630 million and eliminated substantially all debt maturities through year end
2000 by refinancing longer-term debt. The refinancing consisted of:
.the issuance of the outstanding notes for gross proceeds of $2.4 billion;
.the borrowing of an additional $1 billion under two new term loans under
the credit facility; and
. the issuance of 40.25 million shares of Lyondell common stock for gross
proceeds of $765 million.
In addition, as of May 31, 1999, Equistar, LYONDELL-CITGO Refining and
Lyondell Methanol had, in the aggregate, outstanding debt of approximately $3.1
billion and equity of approximately $4.5 billion. The ability of the joint
ventures to distribute cash to Lyondell is reduced by their respective debt
service obligations. Furthermore, a default under some joint venture debt
agreements would constitute a cross-default under Lyondell's credit facility.
Following repayment at maturity of Equistar's 10% Notes due June 1, 1999,
Lyondell currently remains liable on approximately $563 million of debt for
which primary responsibility was assumed by Equistar in connection with its
formation. See "Description of Other Indebtedness--Joint Venture Debt" for a
description of the debt of the joint ventures.
To reduce its debt, Lyondell is looking to:
. the cash flow of its businesses;
. potential joint ventures involving strategic assets;
. new equity capital;
. working capital initiatives;
. potential asset sales;
. refinancing programs; and
. other cash generating opportunities.
Lyondell continues to believe that repositioning its balance sheet to
achieve an investment grade rating over time is an important objective. The
ability of Lyondell to:
. meet its debt obligations;
. finance its capital expenditure needs;
. maintain its dividend rate; and
. comply with the covenants and financial requirements in the credit
facility
will generally depend on the future performance of Lyondell and the
availability and terms of additional financing or alternative means to repay
and refinance bank debt. These factors, in turn, are affected by relevant
prevailing economic, competitive and market conditions and other factors beyond
Lyondell's control. The breach of any of the covenants or financial
requirements in the credit facility could result in a default, which would
permit the lenders to declare the loans immediately payable and to terminate
future lending commitments. A default under the credit facility would also
result in an acceleration of the maturity of the new notes.
Lyondell believes that cash balances, cash generated from operating
activities, and funds from financing activities and lines of credit will be
adequate to meet anticipated future cash requirements for scheduled debt
repayments, necessary capital expenditures and dividends. See "Risk Factors."
Under Internal Revenue Code Sections 338 (g) and (h)(10), Lyondell and the
former majority stockholder of Lyondell Worldwide agreed to elect to step-up
the United States tax bases of Lyondell Worldwide's net assets. This will
result in significant increased depreciation and amortization with resulting
United States tax savings. The total value of these savings is expected to be
between $800 million and $1 billion over time.
61
<PAGE>
Business of Lyondell
Our annual report on Form 10-K for the year ended December 31, 1998 contains
a complete description of our businesses. Described below is a discussion of
our strategy for the following business segments:
. intermediate chemicals and derivatives;
. petrochemicals and polymers;
. refining; and
. methanol.
Also included is a description of the business of Lyondell Worldwide and
Lyondell Nederland, the guarantors of the new notes.
Business Segment Strategies
Intermediate Chemicals and Derivatives (Lyondell Worldwide)
PO and its Derivatives
Lyondell intends to maintain its leading market positions in its major
products. It intends to be a major participant in the global growth of PO,
urethanes and performance chemicals, building from its strengths in the areas
of:
. technology;
. manufacturing;
. marketing; and
. access to raw materials.
Over the past 25 years, the annual global industry growth rate for PO and
its derivatives has averaged approximately 5%. Lyondell expects similar growth
to continue into the future. Global demand for PO was estimated at
approximately 8.7 billion pounds in 1998. Approximately 90% of that volume was
consumed in the manufacture of three families of PO derivatives products:
polyols, propylene glycol and propylene glycol ethers. The remainder was
consumed in the manufacture of a growing segment of performance-based products,
as well as butanediol and its derivatives. Lyondell intends to increase both
its overall production of PO and its production of PO derivatives while
continuing its participation in the PO merchant market, an important source of
revenue and profit for Lyondell.
Lyondell is a major participant in the global urethanes chemicals market
through its production of polyols and TDI. Lyondell's strategy is to grow its
urethanes business using its proprietary Impact(TM) polyols processing
technology first introduced in 1995. This technology offers significant cost
savings in the production of conventional polyols products. It is also key to
the development of new, superior quality products for markets such as footwear,
carpet backing and spandex. To date, Lyondell has been granted 66 patents and
has over 34 patents pending for this technology. Lyondell plans to retrofit
most of its polyols production facilities to utilize Impact(TM) technology over
the next five years.
Lyondell has the only PO-based processing route to butanediol. This
efficient proprietary technology provides Lyondell with a competitive advantage
in the rapidly expanding markets for butanediol and its derivatives. Butanediol
and its derivatives represent a global market growing at 7% per year and
provide access to markets such as:
. pharmaceuticals;
. personal care products;
62
<PAGE>
. fibers; and
. high performance coatings.
The co-products produced from Lyondell's two PO processes are TBA and
styrene monomer. Lyondell's strategy is to maximize earnings contribution from
these products.
Cost Savings
In late 1997, Lyondell Worldwide initiated a restructuring program designed
to simplify its organization, streamline operations and reduce costs. Lyondell
expects to achieve these cost savings by the end of 1999. Lyondell's management
believes that it will be able to realize additional cost savings through:
. overhead consolidation;
. manufacturing and purchasing efficiencies;
. reduced transportation costs; and
. raw materials integration with Equistar.
Petrochemicals and Polymers (Equistar)
Equistar intends to:
. maximize its integration opportunities with Lyondell;
. increase its production and sales of higher value products; and
. continue its ongoing cost reduction activities.
The formation of Equistar provided significant integration opportunities for
Lyondell's ethylene production. Following the addition of the Occidental assets
to Equistar in May 1998, Equistar currently consumes or sells approximately 75%
of its ethylene production to downstream derivatives facilities owned by
Equistar or one of its partners, which has the effect of reducing earnings
volatility.
The creation and subsequent expansion of Equistar were driven by the
opportunity to reduce costs significantly and realize revenue enhancements that
were not possible for the Equistar partners on a stand-alone basis. Equistar
intends to reduce costs by:
. optimizing its processing units for improved operating efficiency and
increased processing rates;
. maximizing the value of its raw materials flexibility and ethylene and
polyethylene co-products production;
. lowering distribution costs through volume leverage; and
. reducing raw materials and other procurement costs.
Equistar expects to achieve significant cost savings by the end of the year
2000.
Equistar is focused on capital projects designed to lower its operating
costs. It is also currently undertaking a market strategy of expanding its
value-added product lines, including:
. high and medium molecular weight high density polyethylene film resins;
. value and specialty injection molding resins; and
. wire and cable resins.
63
<PAGE>
These capacity expansions are intended to support Equistar's expected
increase in production and sales volumes for these products.
Petrochemicals
Equistar's business strategy for its petrochemicals business is to derive
maximum value from its internal integration, as well as integration with
Lyondell, and to improve its low cost operations. Management of Lyondell
intends to use Equistar's production of propylene, ethylene, benzene and
methanol as key raw materials for Lyondell's intermediate chemicals and
derivatives business. Equistar will continue to pursue joint ventures as the
preferred method to add ethylene and polyethylene production capacity when
needed and will aggressively pursue research on alternative ethylene and
polyethylene raw material technology to reduce the costs of raw materials. In
addition, Equistar intends to improve its low cost operations by:
. increasing its ability to use low cost raw materials;
. maximizing ethylene and polyethylene co-product production; and
. reducing raw materials and product delivery costs.
Polymers
Equistar will promote growth in polymers by targeting value-added markets
that provide attractive margins and above average growth rates. In late 1998
Equistar completed a 125 million-pound expansion at its Victoria, Texas
facility. A 480 million-pound expansion of its Matagorda, Texas facility is
expected to be completed in the third quarter of 1999. These expansions will
provide necessary capacity for the high and medium molecular weight high
density polyethylene market. These are areas in which Equistar has a leading
market position and for which demand is growing at 2 to 3% above average
polyethylene growth.
Equistar continues to pursue technological innovation for its polymers
segment to create new polymers products. With the recent addition of the
Occidental assets to Equistar in May 1998, Lyondell benefits from access to
Occidental's processing technologies. To date, Equistar has received eight
fundamental patents and has nine patents pending for its single-site catalyst
technology. This technology is expected to lead to the development of higher
value polymers products with enhanced performance characteristics, including
improved puncture resistance, impact strength and clarity.
Refining (LYONDELL-CITGO Refining)
LYONDELL-CITGO Refining's business strategy focuses on improving its ability
to process low cost, extra heavy crude oil, thereby enabling LYONDELL-CITGO
Refining to capitalize on the favorable economics of its crude supply agreement
and to increase profitability with little additional fixed cost. LYONDELL-CITGO
Refining has already demonstrated its ability to exceed the refinery's designed
processing rate of 230,000 barrels per day of extra heavy crude oil. Peak
processing rates of approximately 270,000 barrels per day have been achieved.
LYONDELL-CITGO Refining is developing a plan to increase the refinery's
capability to process up to 300,000 barrels per day with modest capital
investment and minimal changes to the refinery's fixed cost structure. This
capability, when coupled with LYONDELL-CITGO Refining's advantageous formula-
priced long-term crude supply agreement with PDVSA, helps to stabilize earnings
and cash flow. In addition to increasing processing capacity, LYONDELL-CITGO
Refining is improving its profitability by increasing its yield of high value
products produced per barrel of crude processed. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Results of
Operations--First Quarter of 1999 compared to Fourth Quarter 1998--Refining."
Lyondell seeks to position the LYONDELL-CITGO Refining refinery in the top
quartile of the industry in cost structure. LYONDELL-CITGO Refining continues
to improve its low cost operations through:
. aggressive energy conservation programs;
. improving its yields to increase operational efficiency; and
. improving equipment reliability to maximize processing rates and minimize
downtime.
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<PAGE>
LYONDELL-CITGO Refining has reduced its number of employees in connection
with its new labor agreement and will outsource non-core activities.
Methanol (Lyondell Methanol)
Lyondell Methanol's strategy is to achieve efficient, low cost operations.
Lyondell Methanol intends to:
. reduce raw materials costs;
. increase contract sales;
. implement cost reduction technologies and techniques;
. maximize the chemical efficiency of its processes through research into
alternative raw materials; and
. achieve competitive raw material supply advantages with Lyondell's other
businesses.
You are cautioned that Lyondell's ability to undertake and fund the
business strategies described above will be affected by a variety of factors,
some of which are beyond Lyondell's control. See "Forward-Looking Information"
on page 29.
Business of Lyondell Worldwide and Lyondell Nederland
Lyondell Worldwide
Lyondell Chemical Worldwide, Inc., a wholly owned subsidiary of Lyondell,
is a Delaware corporation formerly known as ARCO Chemical Company before its
acquisition by Lyondell in 1998. Lyondell Worldwide operates Lyondell's
intermediate chemicals and derivatives business. In 1998, Lyondell Worldwide
had total pro forma revenues of $3.6 billion. At December 31, 1998, Lyondell
Worldwide had total tangible assets of $5.6 billion and long-term debt of $6.8
billion, including intercompany loans of $6.1 billion. Lyondell Worldwide is a
guarantor of the new notes and a guarantor under the credit facility. For
further description of the business of Lyondell Worldwide, see "Prospectus
Summary--Intermediate Chemicals and Derivatives (Lyondell Worldwide)" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Intermediate Chemicals and Derivatives (Lyondell Worldwide)."
Lyondell Nederland
Lyondell Chemical Nederland, Ltd., a wholly owned subsidiary of Lyondell
Worldwide, is a Delaware corporation which operates a chemical production
facility in Rotterdam, The Netherlands. In 1998, Lyondell Nederland had total
revenues of $631 million. At December 31, 1998, Lyondell Nederland had total
tangible assets of $1.4 billion and long-term debt, principally intercompany
loans, of $270 million. Lyondell Nederland is a guarantor of the new notes and
a guarantor under the credit facility.
65
<PAGE>
Products
The following charts show the products produced by Lyondell, Equistar and
LYONDELL-CITGO Refining, including:
. the location of manufacturing facilities;
. production capacity;
. major competitors; and
. primary uses.
Unless otherwise specified, in the table below, production capacity was
calculated by estimating the number of days in a typical year that a production
unit of a plant is expected to operate, after allowing for downtime for regular
maintenance, and multiplying that number by an amount equal to the unit's
optimal daily output based on the current design raw material mix. Because
production capacity of a production unit is an estimated amount, the actual
production volumes may be more or less than the production capacity listed.
Production capacity shown for Equistar is 100% of the production capacity of
Equistar, of which Lyondell owns a 41% interest. Production capacity shown for
LYONDELL-CITGO Refining is 100% of the production capacity of LYONDELL-CITGO
Refining, of which Lyondell owns a 58.75% interest.
LYONDELL PRODUCTS AND PRODUCTION FACILITIES
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Production Major
Key Products Capacity Primary Uses Where Produced Competitors
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Propylene Oxide (PO) 3.85 billion PO is a key Channelview, Texas Dow Chemical
pounds per component of Bayport, Texas Shell Chemical
year polyols, propylene Fos-sur-Mer, France Rotterdam, Huntsman
glycol, propylene The Netherlands Chiba, Japan
glycol ethers and
butanediol.
- ----------------------------------------------------------------------------------------------------------------
Polyols 1.47 billion Polyols are used to Institute, West Virginia Dow Chemical
pounds per produce flexible South Charleston, West Virginia Bayer AG
year foam for automotive Channelview, Texas BASF AG
seating and home Fos-sur-Mer, France Shell Chemical
furnishings, Rieme, Belgium
coatings, Anyer, Indonesia
adhesives, sealants Kaohsiung, Taiwan
and elastomers.
- ----------------------------------------------------------------------------------------------------------------
Toluene Diisocyanate 250 million TDI is combined Lake Charles, Louisiana Bayer AG
(TDI) pounds per with polyols to Pont de Claix, France BASF AG
year/1/ produce flexible Lille, France
foam for automotive
seating and home
furnishings,
coatings,
adhesives, sealants
and elastomers.
- ----------------------------------------------------------------------------------------------------------------
Propylene Glycol 960 million Propylene glycol is Bayport, Texas Dow Chemical
pounds per used to produce Fos-sur-Mer, France
year unsaturated Rotterdam, The Netherlands
polyester resins
for bathroom
fixtures and boat
hulls; lower
toxicity
antifreeze,
coolants and
aircraft deicers;
and cosmetics and
cleaners.
- ----------------------------------------------------------------------------------------------------------------
Propylene Glycol Ethers 300 million Propylene glycol Bayport, Texas Dow Chemical
pounds per ethers are used as Rotterdam, The Netherlands
year a lower toxicity
solvent for paints,
coatings and
cleaners.
- ----------------------------------------------------------------------------------------------------------------
Butanediol 120 million Butanediol is used Channelview, Texas BASF AG
pounds per in the manufacture ISP
year of engineering SISAS
resins, films, DuPont
personal care
products,
pharmaceuticals,
coatings, solvents
and adhesives.
- ----------------------------------------------------------------------------------------------------------------
Tertiary Butyl 58,500 barrels TBA is a key Bayport, Texas Saudi Basic
Alcohol (TBA)-- fuel per day component of MTBE. Fos-sur-Mer, France Industries
oxygenates: Methyl MTBE is a gasoline Rotterdam, The Netherlands Corp. (SABIC)
tertiary butyl ether component for Huntsman
(MTBE) reducing emissions Shell Chemical
in reformulated Exxon
gasolines and
enhancing octane
value.
</TABLE>
66
<PAGE>
Petrochemicals
<TABLE>
- ---------------------------------------------------------------------------------------
<CAPTION>
Production Major
Key Products Capacity Primary Uses Where Produced Competitors
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ethylene Glycol 1.0 billion Ethylene glycol is Beaumont, Texas Union Carbide
pounds per used to produce Pasadena, Texas Shell Chemical
year polyester fibers Huntsman
and film, resin,
heat transfer
fluids, paint and
automobile
antifreeze.
- ---------------------------------------------------------------------------------------
Ethylene Oxide 1.1 billion Ethylene oxide is Beaumont, Texas Union Carbide
and Equivalents pounds per used to produce Pasadena, Texas Shell Chemical
year as surfactants, Huntsman
Ethylene Oxide industrial
equivalents; cleaners,
400 million cosmetics,
pounds per emulsifiers, paint,
year as pure heat transfer
Ethylene Oxide fluids and ethylene
glycol (polyester
fibers and film,
polyethylene
terephthalate resin
and antifreeze).
- ---------------------------------------------------------------------------------------
Ethylene Oxide 225 million Ethylene oxide Pasadena, Texas Dow Chemical
Derivatives pounds per derivatives are Union Carbide
year used to produce
paint and coatings,
polishes, solvents
and chemical
intermediates.
- ---------------------------------------------------------------------------------------
</TABLE>
Polymers
<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Density 3.4 billion HDPE is used to Clinton, Iowa Exxon
Polyethylene Alathon(R) pounds/2/ per manufacture grocery, Chocolate Bayou, Phillips
Petrothene(R) year merchandise and Texas Chemical
trash bags; food LaPorte, Texas Solvay
containers for items Matagorda County, Polymers
from frozen desserts Texas
to margarine; Port Arthur, Texas
plastic caps and Victoria, Texas
closures; liners for
boxes of cereal and
crackers; plastic
drink cups and toys;
dairy crates; bread
trays and pails for
items from paint to
fresh fruits and
vegetables; safety
equipment such as
hard hats; house
wrap for insulation;
bottles for
household/industrial
chemicals and motor
oil;
milk/water/juice
bottles; and large
(rotomolded) tanks
for storing liquids
like agricultural
and lawn care
chemicals.
- ------------------------------------------------------------------------------------------------
Low Density Polyethylene 1.7 billion LDPE is used to Clinton, Iowa Dow Chemical
Petrothene(R) pounds per manufacture food LaPorte, Texas Chevron
Acrythene(R) year packaging films; Morris, Illinois Westlake Group
Ultrathene(R) plastic bottles for Pasadena, Texas
packaging food and Port Arthur, Texas
personal care items;
dry cleaning bags;
ice bags; pallet
shrink wrap; heavy-
duty bags for mulch
and potting soil;
boil-in-bag bags;
coatings on flexible
packaging products;
and coatings on
paper board such as
milk cartons.
Specialized forms of
LDPE are Ethyl
Methyl Acrylate,
which provides
adhesion in a
variety of
applications, and
Ethylene Vinyl
Acetate, which is
used in foamed
sheets, bag-in-box
bags, vacuum cleaner
hoses, medical
tubing, clear sheet
protectors and
flexible binders.
</TABLE>
67
<PAGE>
Polymers
<TABLE>
- ---------------------------------------------------------------------------------------------
<CAPTION>
Production Major
Key Products Capacity Primary Users Where Produced Competitors
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Linear Low Density 1.1 billion LLDPE is used to LaPorte, Texas Union Carbide
Polyethylene pounds per manufacture garbage Morris, Illinois Dow Chemical
Petrothene(R) year and lawn-leaf bags; Exxon
housewares; lids Mobil Chemical
for coffee cans and
margarine tubs; and
large (rotomolded)
toys like outdoor
gym sets.
- ---------------------------------------------------------------------------------------------
Polypropylene 680 million Polypropylene is Morris, Illinois Montell
KromaLon(R) pounds per used to manufacture Pasadena, Texas FINA
Petrofil(R) year fibers for carpets, Huntsman
Petrothene(R) rugs and Amoco
KromaLux(R) upholstery; Chemicals
KromaTex(R) housewares;
Flexathene(R) automotive battery
cases; automotive
fascia, running
boards and bumpers;
grid-type flooring
for sports
facilities; fishing
tackle boxes; and
bottle caps and
closures.
</TABLE>
Equistar's research facilities are located in Cincinnati, Ohio; Matagorda,
Texas and Plano, Texas.
- --------
1 Does not include refinery grade material or production from the product
flexibility unit at Equistar's Channelview, Texas facility, which can
convert ethylene and other light petrochemicals into propylene and has a
current production capacity of 1.0 billion pounds per year of propylene.
2 Equistar increased its HDPE production capacity by approximately 125 million
pounds in 1998. A 480 million pound HDPE resin expansion project at the
Matagorda, Texas facility has a targeted start-up in the third quarter of
1999. The idling of the Port Arthur, Texas facility effective March 31, 1999
has resulted in a decrease in production capacity of 300 million pounds per
year.
68
<PAGE>
LYONDELL-CITGO REFINING PRODUCTS AND PRODUCTION FACILITIES
<TABLE>
- --------------------------------------------------------------------------------------
<CAPTION>
Key Products Production Capacity Primary Uses Where Produced
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gasoline/1/ 120,000 barrels per Automotive fuel. Houston, Texas
day
- --------------------------------------------------------------------------------------
Diesel/1/ 75,000 barrels per Fuel for diesel cars Houston, Texas
(#2 Distillate) day and trucks.
- --------------------------------------------------------------------------------------
Jet Fuel/1/ 22,000 barrels per Aviation fuel. Houston, Texas
day
- --------------------------------------------------------------------------------------
Benzene/2/ 50 million gallons Nylon for clothing Houston, Texas
per year and consumer items;
polystyrene for
insulation, packaging
and drink cups.
- --------------------------------------------------------------------------------------
Toluene/3/ 37 million gallons Gasoline component Houston, Texas
per year and chemical raw
material for
producing benzene.
- --------------------------------------------------------------------------------------
Paraxylene/3/ 400 million pounds Polyester fibers for Houston, Texas
per year clothing and fabrics,
soft drink bottles
and films for audio
and video tape.
- --------------------------------------------------------------------------------------
Orthoxylene/3/ 270 million pounds Plasticizer in Houston, Texas
per year products such as
rainwear, shower
curtains, toys and
auto upholstery and
an intermediate in
paints and
fiberglass.
- --------------------------------------------------------------------------------------
Lube Oils/1/ 4,000 barrels per day Automotive and Houston, Texas
industrial engine and
lube oils, railroad
engine additives and
white oils for food-
grade applications.
</TABLE>
- --------
1 Produced by LYONDELL-CITGO Refining and sold to CITGO.
2 Produced by LYONDELL-CITGO Refining and sold to Equistar.
3 Produced by LYONDELL-CITGO Refining and marketed for LYONDELL-CITGO Refining
by Equistar.
69
<PAGE>
Description of Other Indebtedness
Credit Facility
In July 1998, Lyondell acquired all the outstanding shares of common stock
of Lyondell Worldwide for $6.5 billion, which included $5.6 billion for the
purchase of common stock and the assumption or refinancing of approximately
$870 million in debt, net of cash. Funding for the acquisition, the repayment
of some Lyondell and Lyondell Worldwide debt and related fees and expenses was
provided through the credit facility. In May 1999, the credit facility was
amended, two of the original term loans were repaid and two new term loans were
borrowed. The amended credit facility consists of a 5-year revolving credit
facility of up to $500 million to be used for general corporate purposes and
four separate term loans. No amounts to date have been funded under the
revolving credit facility. As of May 31, 1999, the principal amounts
outstanding, interest rates and maturity dates of the term loans were as
follows:
<TABLE>
<CAPTION>
Principal
Amount
Term Loan Outstanding Interest Rate Maturity
--------- ------------ ----------------- --------
<S> <C> <C> <C>
Term loan A........ $1.1 billion LIBOR plus 3.25% June 30, 2003
(amortized over 5 years)
Term loan B........ $1.2 billion LIBOR plus 3.75% June 30, 2005
(amortized over 7 years)
Term loan E........ $850 million LIBOR plus 3.875% June 30, 2006
(amortized over 7 years)
Term loan F........ $150 million LIBOR plus 3.5% December 31, 2003
(amortized over 4 1/2 years)
</TABLE>
Covenants
The amended credit facility requires Lyondell to issue, in one or more
transactions, not less than $470 million of additional subordinated notes (or
more junior securities) by June 30, 2002. This requirement will be reduced by
$2 for every $1 of common stock issued in the future and will be eliminated if
Lyondell achieves either:
. a total debt to adjusted EBITDA ratio, as defined in the credit facility,
of 3.0 to 1.0; or
. a rating for its senior unsecured debt of BB by Standard & Poor's and Ba2
by Moody's.
Under the covenant provisions of the credit facility, as amended, Lyondell
has agreed to, among other things:
. maintain specified financial ratios and consolidated net worth;
. not make some distributions with respect to Lyondell's capital stock;
. not make some investments;
. not allow its subsidiaries to incur some types and amounts of debt; and
. use its best efforts to maintain specified ownership interests in some of
its existing joint ventures and to ensure that some of its existing joint
ventures maintain specified capital expenditure and debt levels and cash
distribution policies.
Lyondell believes that it is in compliance with each of its financial covenants
as of May 31, 1999.
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<PAGE>
Security
The credit facility is secured by:
. personal property of Lyondell and Lyondell Worldwide;
. rights to distributions from some existing joint ventures;
. a pledge of the stock of substantially all domestic subsidiaries directly
owned by Lyondell and Lyondell Worldwide;
. a pledge of 65% of the stock of foreign subsidiaries directly owned by
Lyondell and Lyondell Worldwide; and
. the property, plant and equipment for some of Lyondell's and Lyondell
Worldwide's facilities located in Texas and Louisiana.
Lyondell Worldwide (ARCO Chemical) Debentures
Lyondell Worldwide has the following outstanding debentures:
. $200 million of 9.90% debentures due 2000;
. $100 million of 9.375% debentures due 2005;
. $100 million of 10.25% debentures due 2010; and
. $224 million of 9.80% debentures due 2020.
The debentures are secured by liens on Lyondell Worldwide's manufacturing
plants located in Texas and Louisiana that are equal and ratable with the liens
on those assets under the Senior Secured Notes and the loans under the credit
facility. The indentures for these debentures contain customary covenant
provisions pertaining to, among other things, limitations on liens and sale and
leaseback transactions.
Joint Venture Debt
Equistar Debt
In February 1999, Equistar completed a $900 million private placement of 5-
and 10-year notes, the proceeds of which were used to refinance existing
Equistar debt. Proceeds were used to:
. repay in its entirety Equistar's $205 million outstanding capital lease
obligation relating to its Corpus Christi, Texas facility;
. retire at maturity $150 million aggregate principal amount of 10.00%
Notes due June 1, 1999, for which Lyondell was a co-obligor;
. repay approximately $152 million remaining outstanding under Equistar's
$500 million credit agreement, which was subsequently terminated; and
. refinance outstanding borrowings under its $1.25 billion 5-year working
capital facility.
71
<PAGE>
As of May 31, 1999, the principal amounts outstanding, interest rates and
maturity dates of the Equistar debt obligations were as follows:
<TABLE>
<CAPTION>
Principal
Amount
Debt Outstanding Interest Rate Maturity
---- ------------ ---------------------------- ------------------
<S> <C> <C> <C>
Notes and medium-term
notes(a)............... $713 million Fixed rates ranging from Various dates from
6.5% to 11.3%; weighted February 2000 to
average equal to 8.6% February 2026
5-year revolving credit
facility............... $750 million LIBOR plus 0.5%
Notes due 2004.......... $300 million 8.5% February 2004
Notes due 2009.......... $600 million 8.75% February 2009
</TABLE>
- --------
(a) Following the repayment at maturity of Equistar's 10% Notes due June 1,
1999, Lyondell currently remains liable on $563 million of debt assumed by
Equistar in connection with its formation, though Equistar has agreed to be
primarily liable for this debt.
Equistar Covenants
Under the covenant provisions of its 5-year revolving credit facility,
Equistar has agreed, among other things, to:
. maintain specified financial ratios;
. not create specified liens on its property or assets;
. not enter into some sale and leaseback transactions;
. not allow its subsidiaries to incur some types of debt or issue some
types of preferred stock;
. not use the proceeds of its credit facility for some purposes;
. not change its or its subsidiaries' line of business; and
. not enter into agreements restricting the ability of some of its
subsidiaries to pay distributions or dividends.
Equistar believes that it is in compliance with each of its financial
covenants as of May 31, 1999.
The ability of Equistar to meet its debt service obligations and to comply
with the covenants and financial requirements in its credit facility will
largely depend on the future performance of Equistar and the availability of
additional financing to repay and refinance bank debt. These obligations are
affected by prevailing economic, market and competitive conditions and other
factors beyond Equistar's control. The breach by Equistar of any of the
covenants or financial requirements in its credit facility could result in a
default, which would permit the lenders to declare the loans immediately
payable and to terminate future lending commitments.
LYONDELL-CITGO Refining Debt
As of May 31, 1999, the principal amounts outstanding, interest rates and
maturity dates of the LYONDELL-CITGO Refining debt obligations were as follows:
<TABLE>
<CAPTION>
Principal
Amount
Debt Outstanding Interest Rate Maturity
---- ------------ ---------------------------- --------------
<S> <C> <C> <C>
Construction loan
payable to bank........ $450 million LIBOR plus 0.55% May 5, 2000
Loans payable to
Lyondell............... $255 million LIBOR plus basis points July 1, 2003
consistent with a BBB+ issuer
Loans payable to CITGO.. $ 53 million LIBOR plus basis points July 1, 2003
consistent with a BBB+ issuer
$70 million revolving
credit agreement....... $ 15 million LIBOR plus 0.55% April 28, 2000
</TABLE>
72
<PAGE>
In late 1998, LYONDELL-CITGO Refining postponed a planned debt refinancing.
The postponement was due to unfavorable bond market conditions and political
change in Venezuela associated with the recent presidential elections. The
proceeds of the refinancing would have been used to repay third-party
construction loans and subordinated loans made to LYONDELL-CITGO Refining by
Lyondell and CITGO, with any remaining cash distributed to the partners.
LYONDELL-CITGO Refining intends to pursue the refinancing as soon as practical.
LYONDELL-CITGO Refining Covenants
Under the covenant provisions of its credit agreements, LYONDELL-CITGO
Refining has agreed, among other things, to:
. maintain specified financial ratios;
. not enter into some transactions with affiliates;
. not make some investments;
. not create some liens;
. not make some distributions or repurchases on its capital stock;
. not allow its subsidiaries to incur some types and amounts of debt;
. not enter into some asset sales; and
. not take some specified actions with respect to its crude supply
agreement, products purchase agreement or some of LYONDELL-CITGO
Refining's formation documents.
LYONDELL-CITGO Refining believes that it is in compliance with each of its
financial covenants as of May 31, 1999.
The ability of LYONDELL-CITGO Refining to meet its debt service obligations
and to comply with the covenants and financial requirements in its credit
agreement will largely depend on the future performance of LYONDELL-CITGO
Refining and the availability of additional financing to repay and refinance
bank debt. These obligations are affected by prevailing economic, market and
competitive conditions and other factors beyond LYONDELL-CITGO Refining's
control. The breach by LYONDELL-CITGO Refining of any of the covenants or
financial requirements in its credit agreement could result in a default, which
would permit the lenders to declare the loans immediately payable and to
terminate future lending commitments.
Description of New Notes
We have summarized below the material provisions of the new notes and the
indentures. This summary does not restate these documents in their entirety.
The indentures, and not this summary, govern your rights as holders of the new
notes. Copies of the indentures and the security documents are available as
described below under "--Where You Can Find More Information."
As used only in this "Description of New Notes," the terms "Lyondell", "us",
or "we" refer to Lyondell Chemical Company and not to any of its subsidiaries.
For definitions of some of the capitalized terms used in the following summary,
see "--Definitions."
Brief Description of the New Notes
The new notes will be issued under three separate indentures among Lyondell,
Lyondell Worldwide and Lyondell Nederland, as guarantors, and The Bank of New
York, as trustee. The same indentures also govern the outstanding notes. The
terms of the new notes include those stated in the indentures and those made
part of the indentures by reference to the Trust Indenture Act of 1939, as
amended. The new notes are subject to all
73
<PAGE>
these terms, and holders of new notes are referred to the indentures and the
Trust Indenture Act for a statement of these terms.
Senior Secured Notes.
The new Senior Secured Notes:
. are general secured obligations of Lyondell
. rank equally in right of payment with the outstanding Senior Secured
Notes
. rank equally with all our existing and future unsecured senior debt and
rank senior to this debt to the extent of the value of the collateral
. effectively rank junior to all liabilities of our joint ventures and all
liabilities of our subsidiaries that are not guarantors
. are secured equally and ratably with debt under our credit facility and
some debt of Lyondell Worldwide
. are unconditionally guaranteed by our subsidiaries Lyondell Worldwide and
Lyondell Nederland
. are registered under the Securities Act and freely transferable
. have substantially the same terms as the outstanding Senior Secured
Notes, except that they do not have registration rights.
At May 31, 1999:
. approximately $5.8 billion in principal amount of outstanding
unsubordinated Indebtedness of Lyondell, Lyondell Worldwide and Lyondell
Nederland was secured, including the Senior Secured Notes and
Indebtedness under the Existing Credit Facility;
. approximately $725 million of outstanding Indebtedness of Lyondell,
Lyondell Worldwide and Lyondell Nederland was pari passu with the Senior
Secured Notes and unsecured and ranked effectively junior to the Senior
Secured Notes to the extent of the value of the assets securing the
Senior Secured Notes; of this Indebtedness, $713 million is Indebtedness
of Equistar for which Lyondell remains contingently liable and the
balance is primarily undrawn letters of credit;
. the $500 million in principal amount of Senior Subordinated Notes, would
have been, by their terms, subordinated to the Senior Secured Notes.
Senior Subordinated Notes.
The new Senior Subordinated Notes:
. are general unsecured obligations of Lyondell
. rank equally in right of payment with the outstanding Senior Subordinated
Notes
. rank junior to all our existing and future unsubordinated debt, including
the Senior Secured Notes, debt under our credit facility and some debt of
Lyondell Worldwide
. effectively rank junior to all liabilities of our joint ventures and all
liabilities of our subsidiaries that are not guarantors
. are unconditionally guaranteed by our subsidiaries Lyondell Worldwide and
Lyondell Nederland
. are registered under the Securities Act and freely transferable
. have substantially the same terms as the outstanding Senior Subordinated
Notes, except that they do not have registration rights.
74
<PAGE>
At May 31, 1999, approximately $5.8 billion in principal amount of Senior
Indebtedness of Lyondell, Lyondell Worldwide and Lyondell Nederland was
outstanding (including Indebtedness under the Existing Credit Facility and the
Senior Secured Notes and excluding $713 million of Equistar debt for which
Lyondell is contingently liable).
The Guarantees. The new notes are guaranteed by our subsidiaries Lyondell
Worldwide and Lyondell Nederland.
The guarantees of the Senior Secured Notes:
. are general obligations of each guarantor
. rank equally with all existing and future unsubordinated debt of each
guarantor
The guarantees of the Senior Subordinated Notes:
. are general obligations of each guarantor
. rank junior to all existing and future unsubordinated debt of each
guarantor, including the guarantees of the Senior Secured Notes
Structural Subordination. Many of Lyondell's operations are conducted
through its Subsidiaries and Joint Ventures. For this reason, Lyondell is
dependent upon the cash flow of its Subsidiaries and Joint Ventures to meet its
obligations, including Lyondell's obligations under the new notes. The new
notes will be effectively subordinated to all outstanding Indebtedness and
other liabilities and commitments, including trade payables and operating lease
obligations, of Lyondell's Subsidiaries and Joint Ventures, except to the
extent they are Subsidiary Guarantors. At May 31, 1999, the new notes would
have been effectively subordinated to approximately $4.0 billion of outstanding
liabilities of Lyondell's Joint Ventures, including trade payables. See "Risk
Factors--Most of the covenants under the new notes do not apply to Lyondell's
joint ventures; our joint ventures could increase their debt leverage, default
on their debt obligations or take other action limiting their ability to pay
distributions to us for which you will have no recourse."
Upon the liquidation, reorganization or insolvency of any of Lyondell's
Subsidiaries or Joint Ventures that are not Subsidiary Guarantors, Lyondell's
rights to receive assets of these companies and the rights of holders of the
new notes to participate in those assets will be effectively subordinated to
the claims of creditors and preferred stockholders of the Subsidiary or Joint
Venture. However, in the event that Lyondell itself is recognized as a creditor
of the Subsidiary or Joint Venture, then Lyondell's claims would not be
subordinate to third party creditors and preferred stockholders, but would
still be subordinate to any lien or security interest in the assets of the
Subsidiary or Joint Venture and any Indebtedness of the Subsidiary or Joint
Venture senior to that held by Lyondell.
Under some circumstances, Lyondell will be able to designate current or
future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries and
Joint Ventures, so long as they are not Subsidiaries of Lyondell (and, if they
are Subsidiaries, at any time that they are designated as Unrestricted
Subsidiaries), will not be subject to many of the restrictive covenants
specified in the indentures.
Principal, Maturity And Interest
Senior Secured Notes. The Series A Senior Secured Notes will be secured,
senior obligations of Lyondell initially limited in aggregate principal amount
to $900 million and will mature on May 1, 2007. The Series B Senior Secured
Notes will be secured, senior obligations of Lyondell initially limited in
aggregate principal amount to $1 billion and will mature on May 1, 2007.
Interest on the Series A Senior Secured Notes is 9 5/8% per annum. Interest on
the Series B Senior Secured Notes is 9 7/8% per annum. Interest on both the
Series A Senior Secured Notes and Series B Senior Secured Notes is payable
semi-annually in arrears on May 1 and November 1 of each year, beginning on
November 1, 1999, to holders of record on the immediately preceding April 15
and October 15, respectively. Interest on the Senior Secured Notes will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of issuance.
75
<PAGE>
Senior Subordinated Notes. The Senior Subordinated Notes will be unsecured
obligations of Lyondell initially limited in aggregate principal amount to $500
million and will mature on May 1, 2009. Interest on the Senior Subordinated
Notes is 10 7/8% per annum. Interest is payable semi-annually in arrears on May
1 and November 1 of each year, beginning on November 1, 1999, to holders of
record on the immediately preceding April 15 and October 15, respectively.
Interest on the Senior Subordinated Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the date
of issuance.
Interest on the new notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal of and premium, if any, and
interest and liquidated damages, if any, on the new notes will be payable at
the office or agency of Lyondell maintained for this purpose within The City
and The State of New York. Lyondell may opt to pay interest and liquidated
damages, if any, by check mailed to the holders of the new notes at their
respective addresses listed in the register of holders of the new notes. All
payments with respect to Global Notes, whose holders have given wire transfer
instructions on or before the relevant record date to the paying agent, will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the holders. Until otherwise designated by Lyondell,
Lyondell's office or agency in New York will be the office of the relevant
Trustee maintained for this purpose. The new notes will initially be issued in
global form. In the event they are subsequently certificated, the new notes
will be issued in denominations of $1,000 and integral multiples of $1,000.
Subject to the covenants described below under "--Restrictive Covenants,"
Lyondell may issue additional Series A Senior Secured Notes, additional Series
B Senior Secured Notes and additional Senior Subordinated Notes under the
respective indentures having substantially the same terms in all material
respects as the outstanding notes of each series, as the case may be. However,
the aggregate principal amount of Senior Secured Notes outstanding at any time
will not exceed $1.9 billion. Furthermore, before any issuance of additional
notes, Lyondell must deliver to the Trustee an opinion of counsel confirming
that the holders of the outstanding Series A Senior Secured Notes, Series B
Senior Secured Notes or Senior Subordinated Notes, as the case may be, will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if the additional notes were not
issued. The outstanding Series A Senior Secured Notes, Series B Senior Secured
Notes and Senior Subordinated Notes and any additional Series A Senior Secured
Notes, Series B Senior Secured Notes or Senior Subordinated Notes, as the case
may be, would each be treated as a single class for all purposes under the
relevant indenture.
Security
The Senior Secured Notes will be secured by a lien equally and ratably with
all Senior Indebtedness owing under the Existing Credit Facility (and, with
respect to some of Lyondell's manufacturing plants described below, equally and
ratably with Existing ARCO Chemical Debt as well) under the security agreements
and pledge agreements, as amended from time to time (collectively, the
"Security Documents"), between Lyondell or some of its Restricted Subsidiaries
and Morgan Guaranty Trust Company of New York, as collateral agent.
The liens granted under the Security Documents constitute first-priority
liens, with some exceptions and permitted liens described in the documents, on
the following assets:
. personal property of Lyondell and Lyondell Worldwide;
. substantially all the stock of Lyondell's domestic subsidiaries directly
owned by Lyondell or Lyondell Worldwide;
. 65% of the stock of Lyondell's foreign subsidiaries directly owned by
Lyondell or Lyondell Worldwide (other than the stock of some subsidiaries
for which consent is required to permit a pledge to the extent this
consent has not been obtained);
. the rights of some of Lyondell's Joint Venture Subsidiaries to receive
distributions from Joint Ventures in which they hold Equity Interests;
and
76
<PAGE>
. mortgages on Lyondell Worldwide facilities located in Bayport, Texas,
Channelview, Texas and Lake Charles, Louisiana (collectively and together
with any other assets that may be pledged from time to time, the
"Collateral").
Holders of the Senior Secured Notes will be granted a lien equally and
ratably with any lien granted on additional assets to secure the holders of
Senior Indebtedness under the Existing Credit Facility subsequent to the
issuance of the new notes.
Any or all liens for the benefit of the holders of the Senior Secured Notes
will be automatically released, without the consent of the holders, upon a
release of the lien or liens under the terms of the Security Documents and the
Existing Credit Facility or if the release is approved by the requisite lenders
under the Existing Credit Facility. The Security Documents generally provide
that liens will be automatically released if the assets subject to the liens
are transferred or otherwise disposed of in compliance with the provisions of
the Existing Credit Facility. The Existing Credit Facility specifically
provides that liens will be automatically released from assets that are the
subject of a Major Asset Sale and that are transferred to a Subject Asset
Transferee according to the terms of the Existing Credit Facility.
In addition, the collateral agent and Lyondell may amend the provisions of
the Security Documents with the consent of the requisite lenders and without
the consent of the holders of the Senior Secured Notes. The lenders under the
Existing Credit Facility will have the sole ability to control remedies
(including upon sale or liquidation after acceleration of the new notes or the
debt under the Existing Credit Facility) with respect to the collateral. The
Senior Secured Note Indentures will provide that Lyondell and its Restricted
Subsidiaries which are party to any Security Documents will comply with all the
covenants and agreements contained in such Security Documents the failure to
comply with which would have a material and adverse effect on the Liens
purported to be created thereby, unless such failure to comply is waived by the
requisite lenders under the Existing Credit facility and, after that waiver,
Lyondell is in compliance with the covenant described under "--Security." See
"Risk Factors--Holders of the Senior Secured Notes may not be able to fully
realize the value of their liens; in such case, holders of the Senior Secured
Notes will have an unsecured claim against Lyondell to the extent that amounts
due on the Senior Secured Notes exceed the proceeds from the sale of the
secured assets."
From and after the date when all liens granted in favor of the holders of
Senior Indebtedness under the Existing Credit Facility are released, the
provisions regarding security described above will no longer apply. The
provisions of the covenant described below under "--Restrictive Covenants--
Liens--Senior Secured Notes" will, however, continue to apply.
Subsidiary Guarantees
As of the date of these exchange offers, Lyondell Worldwide and Lyondell
Nederland are the only subsidiary guarantors of the new notes. Any Restricted
Subsidiary that Guarantees or secures the payment of any other Indebtedness of
Lyondell or any of its Restricted Subsidiaries must also Guarantee the payment
of the new notes, with some exceptions described below under "Limitation on
Issuance of Guarantees of Indebtedness by Subsidiaries." Lyondell Worldwide and
Lyondell Nederland will unconditionally guarantee the due and punctual payment
of the principal of and premium, if any, and interest and liquidated damages,
if any, on the new notes, when and as the same will become due and payable,
whether at maturity, upon redemption, by declaration or otherwise (the
"Subsidiary Guarantees").
The obligations of the Subsidiary Guarantors will be limited so as not to
constitute a fraudulent conveyance under applicable law. The Subsidiary
Guarantees of the Senior Secured Notes will be general senior obligations of
Lyondell Worldwide and Lyondell Nederland, secured to the extent described
under "--Security." The Subsidiary Guarantees of the Senior Subordinated Notes
will be general senior subordinated unsecured obligations of Lyondell Worldwide
and Lyondell Nederland. See "--Subordination of Senior Subordinated Notes."
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No Subsidiary Guarantor may consolidate with or merge with or into (whether
or not the Subsidiary Guarantor is the surviving Person), another corporation,
Person or entity whether or not affiliated with the Subsidiary Guarantor unless
all of the following are true:
(1) subject to the provisions of the following paragraph, the Person formed
by or surviving any consolidation or merger, if other than Lyondell or
a Subsidiary Guarantor, assumes all the obligations of the Subsidiary
Guarantor under the new notes issued under the applicable indenture;
(2) immediately after giving effect to the transaction, no Default or Event
of Default exists; and
(3) Lyondell would, at the time of the transaction and after giving pro
forma effect thereto as if the transaction had occurred at the
beginning of the applicable four-quarter period, both:
(a) have a Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of Lyondell
immediately preceding the transaction; and
(b) except with respect to a consolidation or merger with a Person that
has no outstanding Indebtedness, be permitted to incur at least
$1.00 of additional Indebtedness under the Fixed Charge Coverage
Ratio test stated in the covenant described under the caption "--
Restrictive Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock."
The requirements of conditions (1) and (2) listed above will not apply in the
case of a consolidation with or the merger of a Subsidiary Guarantor with or
into Lyondell and the requirements of condition (3) listed above will not apply
in the case of a consolidation with or the merger of a Subsidiary Guarantor
with or into another Subsidiary Guarantor.
In the event of a sale or other disposition, by way of merger, consolidation
or otherwise, of all the Capital Stock of any Subsidiary Guarantor to any
Person that is not an Affiliate of Lyondell, the Subsidiary Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee if the
Net Proceeds of the sale or other disposition are applied in accordance with
the applicable provisions of the applicable indenture. See "Repurchase at the
Option of Holders--Asset Sales."
Upon the release or discharge of the Guarantee which resulted in the
creation of the Subsidiary Guarantee of the Subsidiary Guarantor or, in the
case of Lyondell Worldwide and Lyondell Nederland, the release or discharge of
its Guarantee of Indebtedness under the Existing Credit Facility, the
Subsidiary Guarantors will be released and relieved of any obligations under
its Subsidiary Guarantee. A Subsidiary Guarantor will not be released and
relieved of its obligations, however, in the event of a discharge or release by
or as a result of payment under the Subsidiary Guarantee.
Upon the designation of any Subsidiary Guarantor as an Unrestricted
Subsidiary according to the terms of the indentures, the Subsidiary Guarantor
will be released and relieved of any obligations under its Subsidiary
Guarantee. See "Restrictive Covenants--Limitations on Issuances of Guarantees
of Indebtedness by Subsidiaries."
Subordination of Senior Subordinated Notes
The payment of principal of and premium, if any, and interest on the Senior
Subordinated Notes will be subordinated in right of payment, as stated in the
Senior Subordinated Note Indenture, to the prior payment in full of all Senior
Indebtedness, whether outstanding on or incurred after May 17, 1999.
If Lyondell fails to make any payment on the Senior Subordinated Notes when
due or within any applicable grace period, whether or not on account of the
payment blockage provision referred to below, the failure will constitute an
Event of Default under the Senior Subordinated Note Indenture and will enable
the holders to accelerate the maturity of the Senior Subordinated Notes. See
"--Events of Default and Remedies."
The obligations of each Subsidiary Guarantor under its Senior Subordinated
Note Subsidiary Guarantee are unsecured senior subordinated obligations. As
such, the rights of holders of Senior Subordinated Notes to
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receive payment by a Subsidiary Guarantor under its Subsidiary Guarantee will
be subordinated in right of payment to the rights of holders of Senior
Indebtedness of that Subsidiary Guarantor, including its Senior Secured Note
Subsidiary Guarantee and its Guarantee of the Existing Credit Facility. The
terms of the subordination provisions described below with respect to
Lyondell's obligations under the Senior Subordinated Notes apply equally to a
Subsidiary Guarantor and the obligations of that Subsidiary Guarantor under its
Senior Subordinated Note Subsidiary Guarantee.
The terms of the subordination provisions described below will not apply to
payments from money or the proceeds of U.S. Government obligations deposited in
trust before the occurrence of an event prohibiting payment of or on the Senior
Subordinated Notes and held in trust by the Senior Subordinated Note Trustee
for the payment of principal of and interest on the Senior Subordinated Notes
under the provisions described under "--Defeasance."
Upon any distribution to creditors of Lyondell in a liquidation or
dissolution of Lyondell or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to Lyondell or its property, an
assignment for the benefit of creditors or any marshaling of Lyondell's assets
and liabilities, the holders of Senior Indebtedness will be entitled to receive
payment in full in cash or cash equivalents of all Obligations due in respect
of the Senior Indebtedness before the Holders of Senior Subordinated Notes will
be entitled to receive any payment with respect to the Subordinated Note
Obligations. Until all Obligations with respect to Senior Indebtedness are paid
in full in cash or cash equivalents, any distribution to which the Holders of
Senior Subordinated Notes would be entitled will be made to the holders of
Senior Indebtedness, (except that Holders of Senior Subordinated Notes may
receive and retain Permitted Junior Securities and payments made from the trust
described under "--Defeasance." Payment in full on all obligations that were
due would include interest after the commencement of any proceeding at the rate
specified in the applicable Senior Indebtedness.
Lyondell also may not make any payment upon or in respect of the
Subordinated Note Obligations, except in Permitted Junior Securities or from
the trust described under "--Defeasance," if:
. a default in the payment of the principal of, or premium, if any, or
interest on, or commitment fees relating to, Designated Senior
Indebtedness occurs and is continuing beyond any applicable period of
grace; or
. any other default occurs and is continuing with respect to Designated
Senior Indebtedness that permits holders of the Designated Senior
Indebtedness as to which the default relates to accelerate its maturity
and the Senior Subordinated Note Trustee receives a notice of the default
(a "Payment Blockage Notice") from Lyondell or the holders of any
Designated Senior Indebtedness. Payments on the Senior Subordinated Notes
may and will be resumed including the payment of any amounts previously
blocked by the Payment Blockage Notice:
(1) in the case of a payment default, upon the date on which the default
is cured or waived; and
(2) in case of a nonpayment default, the earlier of the date on which
the nonpayment default is cured or waived or 179 days after the date
on which the applicable Payment Blockage Notice is received, unless
the maturity of any Designated Senior Indebtedness has been
accelerated.
No new period of payment blockage may be commenced unless and until 360 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Senior Subordinated Note Trustee
will be, or be made, the basis for a subsequent Payment Blockage Notice unless
the default will have been waived or cured for a period of not less than 90
days.
"Designated Senior Indebtedness" means:
. the Indebtedness, other than Hedging Obligations, outstanding under the
Existing Credit Facility; and
. any other Senior Indebtedness permitted under the Senior Subordinated
Note Indenture the principal amount of which is $25.0 million or more and
that has been designated by Lyondell in writing to the Senior
Subordinated Note Trustee as "Designated Senior Indebtedness."
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"Permitted Junior Securities" means Equity Interests in Lyondell or debt
securities of Lyondell that are subordinated to all Senior Indebtedness, and
any debt securities issued in exchange for Senior Indebtedness, to
substantially the same extent as, or to a greater extent than, the Senior
Subordinated Notes are subordinated to Senior Indebtedness.
"Senior Indebtedness" means, with respect to any Person:
. all Obligations of that Person outstanding under the Existing Credit
Facility and all Hedging Obligations payable to a lender or an Affiliate
of a lender or to a Person that was a lender or an Affiliate of a lender
at the time the contract was entered into under the Existing Credit
Facility, including, without limitation, interest accruing subsequent to
the filing of, or which would have accrued but for the filing of, a
petition for bankruptcy, whether or not the interest is an allowable
claim in the bankruptcy proceeding;
. any other Indebtedness, unless the instrument under which that
Indebtedness is incurred expressly provides that it is subordinated in
right of payment to any other Senior Indebtedness of that Person; and
. all Obligations with respect to the foregoing.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
will not include:
. any liability for federal, state, local or other taxes;
. any Indebtedness of that Person to any of its Subsidiaries or other
Affiliates;
. any trade payables;
. any debt securities and guarantees issued to any trust, partnership or
other entity affiliated with Lyondell which is a financing vehicle of
Lyondell in connection with the issuance of preferred securities by the
financing entity; or
. any Indebtedness that is incurred in violation of the Senior Subordinated
Note Indenture.
"Subordinated Note Obligations" means all Obligations with respect to the
Senior Subordinated Notes, including, without limitation, principal, premium
of, if any, and interest and liquidated damages, if any, payable under the
terms of the Senior Subordinated Notes (including upon the acceleration or
redemption thereof), together with and including any amounts received or
receivable upon the exercise of rights of recision or other rights of action
(including claims for damages) or otherwise.
The Senior Subordinated Note Indenture will further require that Lyondell
promptly notify holders of Designated Senior Indebtedness if payment of the
Senior Subordinated Notes is accelerated because of an Event of Default. As a
result of the subordination provisions described above, in the event of a
liquidation or insolvency, holders of Senior Subordinated Notes may recover
less ratably than our creditors who are holders of Senior Indebtedness.
Mandatory Redemption
Except as described below under "--Repurchase at the Option of Holders,"
Lyondell will not be required to make any mandatory redemption or sinking fund
payments with respect to the new notes.
Optional Redemption
Series A Senior Secured Notes
We can redeem the Series A Senior Secured Notes, in whole, at any time, or
in part, from time to time, at our option upon not less than 30 nor more than
60 days' notice at a redemption price equal to the make-whole price described
below.
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"Make-Whole Price" means an amount equal to the greater of:
. 100% of the principal amount of the Series A Senior Secured Notes; and
. as determined by an Independent Investment Banker (as defined below), the
sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the date of redemption on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined below);
plus, in each case, accrued and unpaid interest and liquidated damages, if any,
thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for the redemption date, plus 0.5%.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Series A Senior Secured Notes to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Series A Senior Secured Notes.
"Comparable Treasury Price" means, with respect to any redemption date:
. the average of the bid and asked prices for the Comparable Treasury Issue
on the third Business Day preceding the redemption date, as listed in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities"; or
. if the release (or any successor release) is not published or does not
contain the prices on the Business Day:
(1) the average of the Reference Treasury Dealer Quotations for the
redemption date after excluding the highest and lowest of the
Reference Treasury Dealer Quotations; or
(2) if the Series A Senior Secured Note Trustee obtains fewer than three
Reference Treasury Dealer Quotations, the average of all the
quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Series A Senior Secured Note Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Series A Senior Secured Note Trustee
by the Treasury Reference Dealer at 5:00 p.m. on the third Business Day
preceding the redemption date.
"Independent Investment Banker" means a Reference Treasury Dealer appointed
by Lyondell.
"Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer") selected by Lyondell.
Series B Senior Secured Notes
We cannot redeem the Series B Senior Secured Notes before May 1, 2004.
Thereafter, we may redeem the Series B Senior Secured Notes at our option, in
whole or from time to time in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) described below plus accrued and unpaid interest and liquidated
damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on May 1 of the following years:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................... 104.938%
2005........................................................... 102.469%
2006........................................................... 100.000%
</TABLE>
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Senior Subordinated Notes
Except as provided below, we cannot redeem the Senior Subordinated Notes
before May 1, 2004. Thereafter, we may redeem the Senior Subordinated Notes at
our option, in whole or from time to time in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages
of principal amount) described below plus accrued and unpaid interest and
liquidated damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on May 1 of the following
years:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................... 105.438%
2005........................................................... 103.625%
2006........................................................... 101.812%
2007........................................................... 100.000%
</TABLE>
Notwithstanding the foregoing, on or before May 1, 2002, we can redeem in
the aggregate up to 35% of the aggregate principal amount of the Senior
Subordinated Notes from time to time originally issued with the net cash
proceeds of one or more Public Equity Offerings, at a redemption price
(expressed as a percentage of principal amount on the redemption date) of
110.875% plus accrued and unpaid interest and liquidated damages, if any, to
the redemption date; provided that:
. at least 65% of the aggregate principal amount of the Senior Subordinated
Notes from time to time originally issued under the applicable indenture
must remain outstanding and be held, directly or indirectly, by Persons
other than Lyondell and its Affiliates, immediately after each
redemption; and
. the redemption occurs within 90 days of the closing of a Public Equity
Offering.
Selection and Notice
If less than all the new notes issued under an indenture are to be redeemed
at any time, selection of the applicable new notes for redemption will be made
by the applicable Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the new notes are listed. If the
new notes are not so listed, selection of the applicable new notes for
redemption will be on a pro rata basis, by lot or by a method that the
applicable Trustee deems fair and appropriate. However, no new notes of $1,000
or less will be redeemed in part.
Notices of redemption will be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of new notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any new note is to be redeemed in part only, the notice of
redemption that relates to the applicable note will state the portion of the
principal amount to be redeemed. A new note in principal amount equal to the
unredeemed portion will be issued in the name of the applicable holder upon
cancellation of the original note. New notes called for redemption become due
on the date fixed for redemption. On and after the redemption date, interest
ceases to accrue on new notes or portions of the new notes called for
redemption.
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a Change of Control, each holder of new notes will
have the right to require us to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of its new notes under the Change of Control
offer described below at an offer price in cash equal to 101% of the aggregate
principal amount plus accrued and unpaid interest and liquidated damages, if
any, to the date of purchase (the "Change of Control Payment") on a date that
is not more than 90 days after the occurrence of the Change of Control (the
"Change of Control Payment Date"). Within 30 days following any Change of
Control, Lyondell or the applicable
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Trustee will mail a notice to each holder offering to repurchase the new notes
held by a holder under the procedures specified in the notice. We will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations to the extent those laws and regulations are
applicable in connection with the repurchase of the new notes as a result of a
Change of Control.
On the Change of Control Payment Date, we will, to the extent lawful:
. accept for payment all new notes or portions of the new notes properly
tendered and not withdrawn under the Change of Control offer;
. deposit with the applicable Paying Agent an amount equal to the Change of
Control Payment in respect of all new notes or portions thereof so
tendered; and
. deliver or cause to be delivered to the applicable Trustee the new notes
so accepted together with an Officers' Certificate stating the aggregate
principal amount of new notes or portions of new notes being purchased by
Lyondell.
The Paying Agent will promptly mail to each holder of new notes so tendered
the Change of Control Payment for those new notes, and the applicable Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each holder a note equal in principal amount to any unpurchased portion of
the new notes surrendered, if any. However, each note will be in a principal
amount of $1,000 or an integral multiple thereof.
Before complying with the provisions of this covenant, but in any event
within 90 days following a Change of Control, we must either repay all
outstanding Senior Indebtedness or obtain the requisite consents, if any, under
all agreements governing outstanding Senior Indebtedness, to the extent
necessary, to permit the repurchase of Senior Subordinated Notes required by
this covenant.
A failure by Lyondell to comply with the provisions of the preceding
paragraphs will constitute an Event of Default under the applicable indenture.
Except as described above with respect to a Change of Control, the indentures
will not contain provisions that permit the holders of the new notes to require
us to purchase or redeem the new notes in the event of a takeover,
recapitalization or similar transaction. See "--Events of Default and
Remedies."
There can be no assurance that Lyondell will have the financial resources to
purchase the new notes, particularly if a Change of Control triggers a similar
repurchase requirement for, or results in the acceleration of, other
Indebtedness. The Existing Credit Facility provides that some events
constituting a Change of Control will constitute a default under the Existing
Credit Facility and could result in the acceleration of the maturity of the
Existing Credit Facility. Future indebtedness might contain similar provisions.
If a Change of Control occurs, Lyondell could try to refinance the Existing
Credit Facility. If Lyondell does not refinance the Existing Credit Facility,
Lyondell might not be allowed to purchase the Senior Subordinated Notes. As a
result, Lyondell would be in default under the Senior Subordinated Note
Indenture, which would also be a default under the Senior Secured Note
Indenture and the Existing Credit Facility. If this occurs, the subordination
provisions of the Senior Subordinated Note Indenture would restrict payments to
the Senior Subordinated Noteholders. Accordingly, Lyondell might not be able to
fulfill its obligation to repurchase any new notes if a Change of Control
occurs. See "Risk Factors--Lyondell may not be able to repurchase your new
notes upon a change of control."
Lyondell will not be required to make a Change of Control offer upon a
Change of Control if a third party makes the Change of Control offer at the
same or a higher purchase price, at the same times and otherwise in substantial
compliance with the requirements applicable to a Change of Control offer made
by Lyondell and purchases all new notes validly tendered and not withdrawn
under the Change of Control offer.
"Change of Control" means the occurrence of any of the following:
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. the sale, transfer, conveyance or other disposition, in one or a series
of related transactions, of all or substantially all the assets of
Lyondell and its Subsidiaries taken as a whole to any Person or group (as
the term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
other than to a Person or group who, before the transaction, held a
majority of the voting power of the voting stock of Lyondell;
. the acquisition by any Person or group (as defined above) of a direct or
indirect interest in more than 50% of the voting power of the voting
stock of Lyondell, by way of merger or consolidation or otherwise; or
. the first day on which a majority of the members of the board of
directors of Lyondell are not Continuing Directors.
The phrase "all or substantially all" the assets of Lyondell will likely be
interpreted under applicable state law and will be dependent upon particular
facts and circumstances. As a result, there may be a degree of uncertainty in
ascertaining whether a sale or transfer of "all or substantially all" the
assets of Lyondell has occurred, in which case a holder's ability to obtain
the benefit of a Change of Control offer may be impaired.
Asset Sales
We cannot, and cannot permit any of our Restricted Subsidiaries to,
consummate an Asset Sale unless:
. Lyondell and/or the Restricted Subsidiary, as the case may be, receives
consideration at the time of the Asset Sale at least equal to the fair
market value (as conclusively evidenced by a resolution of the board of
directors of Lyondell listed in an Officers' Certificate delivered to the
Trustees) of the assets or Equity Interests issued or sold or otherwise
disposed of; and
. at least 80% of the consideration therefor received by Lyondell and/or
the Restricted Subsidiary is in the form of:
(1) cash or Cash Equivalents; or
(2) a controlling interest or a joint venture interest (to the extent
otherwise permitted by the indentures) in a business engaged in a
Permitted Business or long-term property or assets that are used or
useful in a Permitted Business.
However, the amount of (x) any liabilities as shown on Lyondell's or the
Restricted Subsidiary's most recent balance sheet of Lyondell or any
Restricted Subsidiary, other than contingent liabilities and liabilities that
are by their terms subordinated to the new notes or any guarantee of the new
notes, that are assumed by the transferee of any assets under a customary
novation agreement that releases Lyondell or the Restricted Subsidiary from
further liability and (y) any securities, notes or other obligations received
by Lyondell or any Restricted Subsidiary from the transferee that are promptly
converted by Lyondell or the Restricted Subsidiary into cash (to the extent of
the cash received) will be deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
Lyondell may apply the Net Proceeds, at its option either to:
(1) permanently repay Senior Indebtedness and correspondingly reduce
commitments with respect thereto in the case of revolving borrowings of
Lyondell or a Subsidiary Guarantor or repay Indebtedness and
correspondingly reduce commitments with respect thereto in the case of
revolving borrowings of any Restricted Subsidiary that is not a
Subsidiary Guarantor. However, the Senior Secured Notes Indenture will
provide that, so long as the Senior Secured Notes are secured, only
repayment of Senior Indebtedness incurred under the Existing Credit
Facility, but not any refinancing of this debt other than a credit
facility with commercial banks and other lenders, or the 9.9%
Debentures due 2000 of ARCO Chemical will constitute a repayment of
Indebtedness permitted under this clause (1); or
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(2) acquire a controlling interest or a joint venture interest to the
extent otherwise permitted by the Indentures in another business or,
the making of a capital expenditure or the acquisition of other long-
term assets, in each case, in a Permitted Business or enter into a
binding commitment for any expenditure or acquisition; provided that
the binding commitment will be treated as a permitted application of
Net Proceeds from the date of the commitment until and only until the
earlier of (x) the date on which the expenditure or acquisition is
consummated and (y) the 180th day following the expiration of the
aforementioned 360 day period. If the expenditure or acquisition
contemplated by the binding commitment is not consummated on or before
the 180th day and Lyondell has not applied the Net Proceeds under
clause (1) above on or before the 180th day, the commitment will be
deemed not to have been a permitted application of Net Proceeds at any
time.
However, the Senior Secured Note Indentures will provide that, so long as the
Senior Secured Notes are secured, Lyondell may not apply Net Proceeds of a
Significant Asset Sale under option (2) above to satisfy its obligations under
the first sentence of this paragraph except to the extent that the provisions
of the Existing Credit Facility (but not any refinancing thereof other than a
credit facility with commercial banks and other lenders) require a mandatory
prepayment from the proceeds but the requisite lenders have waived mandatory
prepayment. Pending the final application of any Net Proceeds, Lyondell may
temporarily reduce the revolving Indebtedness under the Existing Credit
Facility or otherwise invest the Net Proceeds in any manner that is not
prohibited by the indentures.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
above will be deemed to constitute "Excess Proceeds." When the aggregate amount
of Excess Proceeds under an indenture exceeds $25 million, Lyondell will be
required to make an offer to all holders of new notes issued under the
applicable indenture (an "Asset Sale Offer") to purchase the maximum principal
amount of new notes and if Lyondell:
. is required to do so under the terms of any other Indebtedness ranking
pari passu with the new notes, to purchase the other Indebtedness; and
. elects to do so, to purchase any Existing ARCO Chemical Debt, on a pro
rata basis with the new notes, that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and liquidated
damages, if any, thereon to the date of purchase, in accordance with the
procedures described in the applicable indenture.
The Senior Subordinated Note Indenture will provide that, before complying with
the provisions of this covenant, we must either repay all outstanding Senior
Indebtedness or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Indebtedness, to the extent necessary, to permit
the repurchase of Senior Subordinated Notes required by this covenant. To the
extent that the aggregate amount of Senior Secured Notes and Senior
Subordinated Notes, and, in each case, any other pari passu Indebtedness
subject to the Asset Sale Offer, tendered under the Asset Sale Offer is less
than the Excess Proceeds, we may, subject to the other terms of the indentures,
use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of new notes surrendered by holders thereof in
connection with any Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee will select the new notes to be purchased on a pro rata basis. Upon
completion of the offer to purchase made under each indenture, the amount of
Excess Proceeds under the applicable indenture will be reset at zero.
Restrictive Covenants
Restricted Payments
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on account of
Lyondell's or any of its Restricted Subsidiaries' Equity Interests
other than (x) dividends or distributions payable in Qualified
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Equity Interests of Lyondell and (y) dividends or distributions payable
to Lyondell or any Restricted Subsidiary of Lyondell;
(2) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of Lyondell, any of its Restricted Subsidiaries or any
Affiliate of Lyondell, other than any Equity Interests owned by
Lyondell or any of its Restricted Subsidiaries;
(3) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness ("Subordinated
Debt") of Lyondell or any Restricted Subsidiary that is subordinated by
its terms to the new notes or the Subsidiary Guarantees, as applicable,
issued under the applicable indenture, other than Indebtedness owed to
Lyondell or any Restricted Subsidiary, except, in each case, payment of
interest or principal at Stated Maturity; or
(4) make any Restricted Investment (all the payments and other actions
described in clauses (1) through (4) being collectively referred to as
"Restricted Payments");
unless, at the time of and after giving effect to the Restricted Payment:
(a) no Default or Event of Default will have occurred and be continuing
after giving effect to the Restricted Payment;
(b) Lyondell would, at the time of the Restricted Payment and after giving
pro forma effect to the Restricted Payment as if the Restricted Payment
had been made at the beginning of the most recently ended four full
fiscal quarters for which financial statements have been filed with the
SEC under the covenant described below under the caption "--Reports"
immediately preceding the date of the Restricted Payment, have been
permitted to incur at least $1.00 of additional Indebtedness under the
Fixed Charge Coverage Ratio test described in the first paragraph of
the covenant in the applicable indenture described below under the
caption "--Incurrence of Indebtedness and Issuance of Preferred Stock";
and
(c) the Restricted Payment, together with the aggregate of all other
Restricted Payments made by Lyondell and its Restricted Subsidiaries
after May 17, 1999, excluding Restricted Payments permitted by clauses
(b) to the extent paid to Lyondell or any of its Restricted
Subsidiaries or to the extent the distributions are deducted as a
minority interest in calculating Consolidated Net Income, (c), (d),
(e), (g), (j), (n) and (p) of the next succeeding paragraph and 50% of
any Restricted Payments permitted by clause (h) of the next succeeding
paragraph, is less than the sum, without duplication, of:
(1) 50% of the Consolidated Net Income of Lyondell for the period (taken
as one accounting period) from the beginning of the first fiscal
quarter commencing on April 1, 1999 to the end of Lyondell's most
recently ended fiscal quarter for which financial statements have
been filed with the SEC under the covenant described below under the
caption "--Reports" at the time of the Restricted Payment or, if the
Consolidated Net Income for the period is a deficit, less 100% of
the deficit, plus
(2) 100% of the aggregate net cash proceeds received by Lyondell or any
of its Restricted Subsidiaries from the issue or sale, other than to
a Subsidiary or Joint Venture of Lyondell, after May 17, 1999 of
Qualified Equity Interests of Lyondell or of debt securities of
Lyondell or any of its Restricted Subsidiaries that have been
converted into or exchanged for Qualified Equity Interests of
Lyondell, plus
(3) to the extent that any Restricted Investment other than a Restricted
Investment permitted to be made under clauses (g) or (h) below that
was made after May 17, 1999 is sold for cash or otherwise
liquidated, repaid or otherwise reduced, including by way of
dividend, to the extent not included in calculating Consolidated Net
Income, the lesser of (A) the cash return with respect to the
Restricted Investment (less the cost of disposition, if any) and (B)
the initial amount of the Restricted Investment, plus
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(4) an amount equal to the sum of:
(A) the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or other transfers
of assets to the extent not included in calculating Consolidated
Net Income, in each case to Lyondell or any Restricted
Subsidiary from Unrestricted Subsidiaries; and
(B) the portion proportionate to Lyondell's equity interest in the
Subsidiary of the fair market value of the net assets of an
Unrestricted Subsidiary at the time the Unrestricted Subsidiary
is designated a Restricted Subsidiary;
provided, however, that the foregoing sum will not exceed, in the case
of any Unrestricted Subsidiary, the amount of Restricted Investments,
other than Restricted Investments permitted to be made under clauses
(g) or (h) below, previously made after May 17, 1999 by Lyondell or any
Restricted Subsidiary in the Unrestricted Subsidiary.
The amount of any Restricted Payment, if other than cash, will be the fair
market value (as conclusively evidenced by a resolution of the board of
directors) of the asset(s) proposed to be transferred by Lyondell or the
Restricted Subsidiary, as the case may be, under the Restricted Payment.
If, other than with respect to payments made under clauses (a) and (n)
below, no Default or Event of Default will have occurred and be continuing
after giving effect to the Restricted Payment, the foregoing provisions will
not prohibit the following Restricted Payments:
(a) the payment of any dividend within 60 days after the date of the
dividend declaration, if at said date of declaration the payment would
have complied with the provisions of the applicable indenture;
(b) dividends or distributions by any Restricted Subsidiary of Lyondell
payable either:
(1) to all holders of a class of Capital Stock of the Restricted
Subsidiary on a pro rata basis or on a basis that is more favorable
to Lyondell; provided that at least 50% of the class of Capital
Stock is held by Lyondell and/or one or more of its Restricted
Subsidiaries; or
(2) to all holders of a class of Preferred Stock of a Restricted
Subsidiary that is not a Subsidiary Guarantor issued after May 17,
1999 in compliance with the covenant described below under the
caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock";
(c) the payment of cash dividends on any series of Disqualified Stock
issued after May 17, 1999 in an aggregate amount not to exceed the cash
received by Lyondell since May 17, 1999 upon issuance of the
Disqualified Stock;
(d) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of Lyondell, any Restricted Subsidiary or any Joint
Venture, or the acquisition of all the outstanding Equity Interests of
any Person that conducts no operations and has no assets or liabilities
other than the ownership of Equity Interests in a Joint Venture, in
exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Subsidiary or Joint Venture of
Lyondell) of, Qualified Equity Interests of Lyondell; provided that the
amount of any net cash proceeds that are utilized for any redemption,
repurchase, retirement or other acquisition will be excluded from
clause (c)(2) of the preceding paragraph;
(e) the defeasance, redemption or repurchase of Subordinated Debt with the
net cash proceeds from an incurrence of Permitted Refinancing or in
exchange for or out of the net cash proceeds from the substantially
concurrent sale (other than to a Subsidiary or Joint Venture of
Lyondell) of Qualified Equity Interests of Lyondell; provided that the
amount of any net cash proceeds that are utilized for any redemption,
repurchase, retirement or other acquisition will be excluded from
clause (c)(2) of the preceding paragraph;
(f) the repurchase, redemption or other acquisition or retirement for value
of (i) any Equity Interests of Lyondell or any Subsidiary of Lyondell
held by any member of Lyondell's or any of its
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Subsidiaries' management under any management equity subscription
agreement or stock option agreement or (ii) any Equity Interests of
Lyondell which are or are intended to be used to satisfy issuances of
Equity Interests upon exercise of employee or director stock options or
upon exercise or satisfaction of other similar instruments outstanding
under employee or director benefit plans of Lyondell or any Subsidiary
of Lyondell; provided that the aggregate price paid for all the
repurchased, redeemed, acquired or retired Equity Interests will not
exceed $5.0 million in any fiscal year of Lyondell;
(g) Restricted Investments in any of the Specified Joint Ventures,
including without limitation, the purchase of Equity Interests of a
Specified Joint Venture directly from another Person or the purchase of
all the outstanding Equity Interests of any Person that conducts no
operations and has no assets or liabilities other than the ownership of
Equity Interests of a Specified Joint Venture, to the extent that the
proceeds of these investments are used to purchase or redeem an
interest of another Person in the Specified Joint Venture other than
Lyondell, a Restricted Subsidiary or an Affiliate of Lyondell, except a
Person that is deemed to be an Affiliate solely by virtue of its
ownership of Equity Interests of Lyondell acquired in exchange for
Equity Interests in the Specified Joint Venture; provided that after
giving pro forma effect thereto as if the Restricted Payment and any
related incurrence of Indebtedness had been made at the beginning of
the most recently ended four full fiscal quarter period for which
financial statements have been filed with the SEC under the covenant
described below under the caption "--Reports" immediately preceding the
date of the Restricted Payment, Lyondell would have been permitted to
incur at least $1.00 of additional Indebtedness under the Fixed Charge
Coverage Ratio test described in the first paragraph of the covenant in
the applicable indenture described below under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock";
(h) Restricted Investments in any Joint Venture made during any fiscal year
of Lyondell or within 45 days after the end of the fiscal year in
amounts that, together with all other Restricted Investments made in
the Joint Venture in respect of the fiscal year in reliance on this
clause (h) during the fiscal year or within 45 days after the end of
the fiscal year, do not exceed the amount of dividends or distributions
previously paid in respect of the fiscal year to Lyondell or any
Restricted Subsidiary by the Joint Venture;
(i) the payment of dividends on Lyondell's common stock in an aggregate
amount per annum not to exceed the product of (i) $0.90 and (ii) the
sum, without duplication, of
(x) 117,315,442 shares, which is the sum of the number of shares
outstanding immediately before the May 17, 1999 common stock offering
plus the number of shares issued in that offering; plus
(y) if Lyondell issues shares of its common stock after May 17,
1999, to the extent (1) the shares are issued in exchange for or (2)
the net cash proceeds therefrom are used substantially concurrently
to acquire Equity Interests of a Specified Joint Venture held by a
Person other than Lyondell, a Restricted Subsidiary or an Affiliate
of Lyondell, except a Person that is deemed to be an Affiliate solely
by virtue of its ownership of Equity Interests of Lyondell acquired
in exchange for Equity Interests in the Specified Joint Venture, that
immediately before the issuance was or as a result of the exchange or
acquisition becomes a Restricted Subsidiary and the Specified Joint
Venture is not subsequently designated as an Unrestricted Subsidiary,
the number of shares of common stock; plus
(z) the sum of (1) 1,000,000 and (2) the number of shares of common
stock of Lyondell as are issued after May 17, 1999 under the exercise
of employee or director stock options granted before May 17, 1999 or
issued after May 17, 1999 under other employee or director benefit
plans of Lyondell or any of its Restricted Subsidiaries or issuable
under the exercise of employee or director stock options granted
after May 17, 1999; provided that the aggregate number of shares
includable under this subclause (z)(2) with respect to shares issued
or issuable during any fiscal year of Lyondell will not exceed
1,000,000;
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provided further that the number of shares referred to in subclauses
(x), (y) and (z) will be adjusted to reflect any stock split or reverse
stock split or stock dividend made after May 17, 1999 and before the
date the shares were issued;
(j) distributions or payments of Receivables Fees;
(k)(1) Investments in any Joint Venture or Unrestricted Subsidiary
organized to construct, own and/or operate a propylene oxide plant
in the European Union in an aggregate amount that, together with all
other Investments made under this clause (k), does not exceed $100.0
million; and
(2) the pledge of the Capital Stock of the Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and
conducts no operations other than the holding directly or indirectly
of Equity Interests of the Joint Venture to secure Non-Recourse Debt
of the Joint Venture or Unrestricted Subsidiary;
(l)(1) (x) the transfer of the TDI Assets to a newly formed Joint Venture
or Unrestricted Subsidiary or (y) the designation of any Restricted
Subsidiary that has no assets or liabilities other than all or a
portion of the TDI Assets as an Unrestricted Subsidiary, in each
case, in connection with the incurrence of Indebtedness by the Joint
Venture or Unrestricted Subsidiary or Rhodia or a wholly owned
subsidiary of Rhodia to improve the Rhodia TDI Plant; and
(2) the pledge of the Capital Stock of the Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and
conducts no operations other than the holding directly or indirectly
of Equity Interests of the Joint Venture to secure Non-Recourse Debt
of the Joint Venture or Unrestricted Subsidiary or Rhodia or a
wholly owned subsidiary of Rhodia;
(m) the repurchase of any Subordinated Debt at a purchase price not greater
than 101% of the principal amount thereof in the event of (x) a Change
of Control under a provision no more favorable to the holders thereof
than the provision of the applicable indenture described under "--
Repurchase at the Option of the Holders--Change of Control" or (y) an
Asset Sale under a provision no more favorable to the holders thereof
than the provision of the applicable indenture described under "--
Repurchase at the Option of the Holders--Asset Sales"; provided that,
in each case, before the repurchase Lyondell has made a Change of
Control offer or Asset Sale Offer, as applicable, and repurchased all
new notes issued under the applicable indenture that were validly
tendered for payment in connection with the Change of Control offer or
Asset Sale Offer;
(n) distributions by any Restricted Subsidiary or Joint Venture of
chemicals to a holder of Capital Stock of the Restricted Subsidiary or
Joint Venture if the distributions are made under a provision in a
joint venture agreement or other arrangement entered into in connection
with the establishment of the Joint Venture or Restricted Subsidiary
that requires the holder to pay a price for the chemicals equal to that
which would be paid in a comparable transaction negotiated on an arms-
length basis or under a provision that imposes a substantially
equivalent requirement;
(o) any other Restricted Payment which, together with all other Restricted
Payments made under this clause (o) on or after the date of the
applicable indenture, does not exceed $25 million (after giving effect
to any subsequent reduction in the amount of any Investments made under
this clause (o) as a result of the repayment or other disposition
thereof for cash as described in clause (3) of the first paragraph
above, the amount of the reduction not to exceed the amount of the
Investments previously made under this clause (o)); and
(p) dividends or distributions by any Joint Venture other than a Specified
Joint Venture to all holders of a class of Capital Stock of the Joint
Venture permitted by clause (b)(1) above; provided that after giving
effect to the dividends or distributions and any related transactions,
the Joint Venture making the dividends or distributions to the holders
is contractually entitled to receive, and receives within 180 days
before or after the date of the dividends or distributions, directly or
indirectly, an equivalent or larger cash payment from each holder,
other than from a holder that is Lyondell or any Restricted
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Subsidiary, or from an Affiliate of the holder, which cash payment has
not been previously applied under this clause (p) to offset any other
dividend or distribution by the Joint Venture to the holder and (y) the
dividends or distributions do not exceed the holders' pro rata share of
the Joint Venture's cash flows from operating activities, minus any non-
cash charge to the extent that it represents an accrual of or reserve
for cash expenditures in any future period or amortization of a prepaid
cash expense in any future period.
The board of directors of Lyondell may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if this designation would not cause a
Default. For purposes of making this determination, all outstanding
Investments by Lyondell and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of the
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this covenant, except to the extent the Investments
were repaid in cash, and, in the case of a Joint Venture and any Subsidiary of
a Joint Venture designated as an Unrestricted Subsidiary on the first day that
it is a Subsidiary of Lyondell, and except to the extent that either:
. the Investments were made after May 17, 1999; or
. in the case of a Specified Joint Venture, the Investments were made
before May 17, 1999.
All outstanding Investments deemed to be Restricted Payments as described in
the preceding sentence will be deemed to constitute Investments in an amount
equal to the fair market value of the Investments at the time of the
designation (as conclusively determined by the board of directors). The
designation will only be permitted if any Restricted Payment would be
permitted at the time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. In the case of any designation by
Lyondell of a Person as an Unrestricted Subsidiary on the first day that the
Person is a Subsidiary of Lyondell in accordance with the provisions of the
indentures, the designation will be deemed to have occurred for all purposes
of the indentures simultaneously with, and automatically upon, the Person
becoming a Subsidiary.
Not later than the date of making any Restricted Payment, other than those
permitted by clauses (b)(1), (f), (j) and (n) above, and not later than the
120th day after making any Restricted Payment permitted by clause (f) above,
Lyondell will deliver to the Trustee an Officers' Certificate stating that the
Restricted Payment is permitted and stating the basis upon which the
calculations required by the covenant described under the caption "--
Restricted Payments" were computed.
Incurrence of Indebtedness and Issuance of Preferred Stock
On or after May 17, 1999:
. Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, Guarantee or
otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Debt);
. Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, issue any Disqualified Stock, including Acquired Disqualified Stock;
and
. Lyondell will not permit any of its Restricted Subsidiaries that are not
Subsidiary Guarantors to issue any shares of Preferred Stock, including
Acquired Preferred Stock;
provided, however, that Lyondell and the Subsidiary Guarantors may incur
Indebtedness, including Acquired Debt, and may issue shares of Disqualified
Stock, including Acquired Disqualified Stock, if the Fixed Charge Coverage
Ratio for Lyondell's most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC under the covenant described
below under the caption "--Reports" immediately preceding the date on which
the additional Indebtedness is incurred or the Disqualified Stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock had been issued, as
the case may be, at the beginning of the four-quarter period. Letters of
credit and bankers'
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acceptances will be deemed to have an aggregate principal amount of
Indebtedness equal to the maximum amount available under these instruments.
The foregoing provisions will not apply to:
(a) the incurrence by Lyondell of Indebtedness under the Existing Credit
Facility and by its Subsidiaries under Guarantees of the Existing
Credit Facility thereof in an aggregate principal amount at any time
outstanding not to exceed an amount equal to $3.87 billion less the
aggregate amount of all mandatory repayments, other than mandatory
prepayments triggered solely by the issuance of Indebtedness or
Preferred Stock of a Finance Subsidiary to refinance the Existing
Credit Facility, applied to:
(1) repay loans outstanding, other than revolving credit loans; or
(2) permanently reduce the revolving credit commitments;
(b) the incurrence by Lyondell and the Subsidiary Guarantors of
Indebtedness represented by the Senior Secured Notes, the Senior
Subordinated Notes and the Subsidiary Guarantees;
(c) the incurrence by Lyondell and its Restricted Subsidiaries of Existing
Indebtedness other than Indebtedness of the type described in clauses
(a), (b) or (e) through (l) of this covenant;
(d) the incurrence by Lyondell or any of its Restricted Subsidiaries of any
Permitted Refinancing in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted to be incurred under the Fixed Charge
Coverage Ratio test described above or clauses (b) or (c) above or (m)
or (n) below or this clause (d);
(e) the incurrence by Lyondell or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Lyondell and any of its
Restricted Subsidiaries; provided, however, that:
(1) if Lyondell or any Subsidiary Guarantor is the obligor on the
Indebtedness, the Indebtedness is expressly subordinated to the
prior payment in full in cash of all Obligations with respect to
the new notes or the Subsidiary Guarantee, as the case may be; and
(2)A. any subsequent issuance or transfer of Equity Interests that
results in any Indebtedness being held by a Person other than
Lyondell or a Restricted Subsidiary; and
B. any sale or other transfer of any Indebtedness to a Person that
is not either Lyondell or a Restricted Subsidiary;
will be deemed, in each case, to constitute an incurrence of
Indebtedness by Lyondell or the Restricted Subsidiary, as the case may
be;
(f) the incurrence by Lyondell or any Restricted Subsidiary of Hedging
Obligations that are incurred for the purpose of:
(1) fixing or hedging interest rate or currency risk with respect to
any fixed or floating rate Indebtedness that is permitted by the
applicable indenture to be outstanding or any receivable or
liability the payment of which is determined by reference to a
foreign currency; provided that the notional principal amount of
any Hedging Obligation does not exceed the principal amount of the
Indebtedness to which the Hedging Obligation relates; or
(2) fixing or hedging risk with respect to fluctuations in the cost of
raw materials; provided that the obligation is entered into for
valid business purposes other than speculative purposes, as
determined by Lyondell's or the Restricted Subsidiary's principal
financial officer in the exercise of his or her good faith business
judgment;
(g) the issuance by any of Lyondell's Restricted Subsidiaries of shares of
Preferred Stock to Lyondell or a Wholly Owned Restricted Subsidiary;
provided that:
(1) any subsequent issuance or transfer of Equity Interests that
results in the Preferred Stock being held by a Person other than
Lyondell or a Wholly Owned Restricted Subsidiary; or
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(2) the transfer or other disposition by Lyondell or a Wholly Owned
Restricted Subsidiary of any shares to a Person other than Lyondell
or a Wholly Owned Restricted Subsidiary will be deemed, in each
case, to constitute an issuance of Preferred Stock by the
Subsidiary on the date that is not permitted by this clause (g);
(h) the incurrence by Lyondell or any of its Restricted Subsidiaries of
Indebtedness represented by tender, bid, performance, government
contract, surety or appeal bonds, standby letters of credit and
warranty and contractual service obligations of like nature, trade
letters of credit or documentary letters of credit, in each case to the
extent incurred in the ordinary course of business of Lyondell or the
Restricted Subsidiary and the incurrence by Lyondell of Indebtedness
represented by letters of credit incurred in connection with the PBGC
Settlement;
(i) the incurrence by any Restricted Subsidiary of Lyondell of Indebtedness
or the issuance by any Restricted Subsidiary of Preferred Stock, the
aggregate principal amount or liquidation preference of which, together
with all other Indebtedness and Preferred Stock of Lyondell's
Restricted Subsidiaries at the time outstanding and incurred or issued
in reliance upon this clause (i), does not exceed $50 million;
(j) the issuance by any Finance Subsidiary of Preferred Stock with an
aggregate liquidation preference not exceeding the amount of
Indebtedness of Lyondell held by the Finance Subsidiary; provided that
the Fixed Charge Coverage Ratio for Lyondell's most recently ended four
full fiscal quarters for which financial statements have been filed
with the SEC under the covenant described below under the caption "--
Reports" immediately preceding the date on which the Preferred Stock is
issued would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom)
as if the Preferred Stock had been issued at the beginning of the four-
quarter period;
(k) the incurrence of Indebtedness by Foreign Subsidiaries in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding and incurred in reliance upon this clause (k) not to exceed
$100 million;
(l) the Guarantee by any Restricted Subsidiary of Indebtedness of Lyondell
or a Restricted Subsidiary that was permitted to be incurred by another
provision of this covenant;
(m) Acquired Debt or Acquired Disqualified Stock; provided that the
Indebtedness or Disqualified Stock was not incurred in connection with
or in contemplation of the Person becoming a Restricted Subsidiary; and
provided further that immediately after giving effect to the
incurrence, the Fixed Charge Coverage Ratio for Lyondell's most
recently ended four full fiscal quarters for which financial statements
have been filed with the SEC under the covenant described below under
the caption "--Reports" immediately preceding the date of the
incurrence would have been at least 2.0 to 1.0, determined on a pro
forma basis;
(n) Indebtedness or Disqualified Stock of a Specified Joint Venture or a
Subsidiary thereof existing at the time the Specified Joint Venture
first becomes a Restricted Subsidiary; provided that the Indebtedness
or Disqualified Stock was not incurred in connection with or in
contemplation of the Specified Joint Venture becoming a Restricted
Subsidiary; and provided further that immediately after giving effect
to the Specified Joint Venture becoming a Restricted Subsidiary, the
Fixed Charge Coverage Ratio for Lyondell's most recently ended four
full fiscal quarters for which financial statements have been filed
with the SEC under the covenant described below under the caption "--
Reports" immediately preceding the date on which the Specified Joint
Venture became a Restricted Subsidiary would have been, determined on a
pro forma basis:
(i) at least 2.0 to 1.0; or
(ii) equal to or greater than it was immediately before the Specified
Joint Venture becoming a Restricted Subsidiary;
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(o) with respect to any Specified Joint Venture that becomes a Restricted
Subsidiary, the incurrence by that Specified Joint Venture of
Indebtedness under any revolving credit facility in an aggregate
principal amount at any time outstanding not to exceed the aggregate
principal amount of committed financing under all revolving credit
facilities of the Specified Joint Venture as in effect on May 17, 1999;
and
(p) the incurrence by Lyondell or any Subsidiary Guarantor of Indebtedness
in an aggregate principal amount or accreted value, as applicable, at
any time outstanding and incurred in reliance on this clause (p) not to
exceed $25 million.
For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness or Preferred Stock meets the criteria of more than one
of the categories of permitted Indebtedness described in clauses (a) through
(p) above or is entitled to be incurred under the first paragraph of this
covenant, Lyondell will, in its sole discretion, classify the item of
Indebtedness or Preferred Stock in any matter that complies with this covenant
and the Indebtedness or Preferred Stock will be treated as having been incurred
under the clauses or the first paragraph hereof, as the case may be, designated
by Lyondell. The amount of Indebtedness issued at a price which is less than
the principal amount of the Indebtedness will be equal to the amount of the
liability in respect of the Indebtedness determined in accordance with GAAP.
Liens
Senior Secured Notes
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien,
except Permitted Liens, on any asset now owned or hereafter acquired, or any
income or profits therefrom, unless all payments due under the Senior Secured
Note Indentures and the Senior Secured Notes or the Senior Secured Note
Guarantees are secured on an equal and ratable basis with the obligations so
secured or, if the obligations are subordinated by their terms to the Senior
Secured Notes or the Senior Secured Note Guarantees, before the obligations so
secured, until such time as the obligations are no longer so secured.
Senior Subordinated Notes
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien,
except Permitted Liens, to secure Indebtedness or other obligations that are
pari passu with or subordinated by their terms in right of payment to the
Senior Subordinated Notes or the Senior Subordinated Note Guarantees on any
asset now owned or hereafter acquired, or any income or profits therefrom,
unless all payments due under the Senior Subordinated Note Indenture and the
Senior Subordinated Notes or the Senior Subordinated Note Guarantees are
secured on an equal and ratable basis with the obligations so secured or, if
the obligations are subordinated by their terms to the Senior Subordinated
Notes or the Senior Subordinated Note Guarantees, before the obligations so
secured, until such time as the obligations are no longer so secured.
Dividend and Other Payment Restrictions Affecting Subsidiaries and Joint
Ventures
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any restriction on the ability of any Restricted Subsidiary
to:
(a)(1) pay dividends or make any other distributions to Lyondell or any of
its Restricted Subsidiaries on its Capital Stock, or with respect to
any other interest or participation in, or measured by, its profits;
or
(2) pay any Indebtedness owed to Lyondell or any of its Restricted
Subsidiaries;
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(b)make loans or advances to Lyondell or any of its Restricted
Subsidiaries; or
(c)transfer any of its properties or assets to Lyondell or any of its
Restricted Subsidiaries;
except for those restrictions existing under or by reason of:
(1) existing agreements as in effect on May 17, 1999;
(2) Indebtedness permitted by the indentures to be incurred containing
restrictions on the ability of Restricted Subsidiaries to
consummate transactions of the types described in clauses (a), (b)
or (c) above not materially more restrictive than those contained
in the indentures;
(3) the indentures;
(4) applicable law;
(5) existing restrictions with respect to a Person acquired by Lyondell
or any of its Restricted Subsidiaries, except to the extent the
restrictions were put in place in connection with or in
contemplation of the acquisition, which restrictions are not
applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the
Person, so acquired;
(6) customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business;
(7) construction loans and purchase money obligations (including
Capital Lease Obligations) for property acquired in the ordinary
course of business that impose restrictions of the nature described
in clause (c) above on the property so constructed or acquired;
(8) in the case of clause (c) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent the restrictions restrict the transfer of
the property subject to the security agreements or mortgages;
(9) a Permitted Refinancing, provided that the restrictions contained
in the agreements governing the Permitted Refinancing are not
materially more restrictive, taken as a whole, than those contained
in the agreements governing the Indebtedness being refinanced (as
conclusively evidenced by a resolution of the board of directors);
(10) customary restrictions on a Finance Subsidiary imposed in the
Finance Subsidiary's organizational documents or by the terms of
its Preferred Stock;
(11) any restriction with respect to shares of Capital Stock of a
Restricted Subsidiary imposed under an agreement entered into for
the sale or disposition of the shares of Capital Stock or any
restriction with respect to the assets of a Restricted Subsidiary
imposed under an agreement entered into for the sale or
disposition of the assets or all or substantially all the Capital
Stock of the Restricted Subsidiary pending the closing of the sale
or disposition;
(12) in the case of any Restricted Subsidiary that is a Joint Venture,
customary restrictions on the Restricted Subsidiary contained in
its joint venture agreement, which restrictions are consistent
with the past practice of Lyondell and its Restricted Subsidiaries
(as conclusively evidenced by a resolution of the board of
directors);
(13) existing restrictions with respect to a Specified Joint Venture or
the property or assets of the Specified Joint Venture or a
Subsidiary of a Specified Joint Venture or the property or assets
of the Subsidiary, in each case, at the time the Specified Joint
Venture first becomes a Restricted Subsidiary, except to the
extent the restrictions were put in place in connection with or in
contemplation of the Specified Joint Venture becoming a Restricted
Subsidiary, which restrictions are not applicable to any Person,
or the properties or assets of any Person, other than
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the Specified Joint Venture or the property or assets of the
Specified Joint Venture or a Subsidiary of the Specified Joint
Venture or the property or assets of the Subsidiary; and
(14) the Existing Credit Facility and related documentation as the same
is in effect on May 17, 1999 and as amended, modified, extended,
renewed, refunded, refinanced, restated or replaced from time to
time; provided that the Existing Credit Facility and related
documentation as so amended, modified, extended, reviewed,
refunded, refinanced, restated or replaced is not materially more
restrictive, taken as a whole, as to the matters enumerated above
than the Existing Credit Facility and related documentation as in
effect on May 17, 1999 (as conclusively evidenced by a resolution
of the board of directors).
For purposes of determining compliance with this covenant, in the event that
a restriction meets the criteria of more than one of the categories of
permitted restrictions described in clauses (1) through (14) above, Lyondell
will, in its sole discretion, classify the restriction in any matter that
complies with this covenant and the restriction will be treated as existing
under the clauses designated by Lyondell.
In addition, Lyondell will use its best efforts consistent with its
contractual obligations and fiduciary duties to any Joint Venture, in each
case, as in effect on May 17, 1999 not to permit any of its Joint Ventures that
are not Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any restriction on the ability of
the Joint Venture to:
(a)(1) pay dividends or make any other distributions to Lyondell or any of
its Restricted Subsidiaries on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits;
or
(2) pay any Indebtedness owed to Lyondell or any of its Restricted
Subsidiaries;
(b) make loans or advances to Lyondell or any of its Restricted
Subsidiaries; or
(c) transfer any of its properties or assets to Lyondell or any of its
Restricted Subsidiaries;
except for those restrictions existing under or by reason of:
(a) the Joint Venture's joint venture agreement or its credit facility
(provided that in each case the restrictions are consistent with the
past practice of Lyondell);
(b) in the case of any Joint Venture existing on May 17, 1999, its existing
agreements as in effect on the date of the applicable indenture and as
amended, modified, extended, restated or replaced from time to time;
provided that no amendment, modification, extension, restatement or
replacement results in agreements that are materially more restrictive,
taken as a whole, as to the matters enumerated above than the existing
agreements as in effect on the date of the applicable indenture (as
conclusively evidenced by a resolution of the board of directors);
(c) in the case of LYONDELL-CITGO Refining, any instrument governing its
Indebtedness; and
(d) the restrictions described in clauses (4), (5), (6), (7), (8), (10),
(11) and (14) of the first sentence of this covenant (assuming that
references in clauses (8) and (11) to Restricted Subsidiary were
references to a Joint Venture).
Sale and Leaseback Transactions
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, enter into any Sale and Leaseback Transaction; provided that Lyondell or
any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:
(a) Lyondell or the Restricted Subsidiary, as the case may be, could have:
(1) incurred Indebtedness in an amount equal to the Attributable Debt
relating to the Sale and Leaseback Transaction under the Fixed
Charge Coverage Ratio test described in the first
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paragraph of the covenant described under the caption "--Incurrence
of Indebtedness and Issuance of Preferred Stock" (whether or not the
covenant has ceased to be otherwise in effect as described below
under "Limitation on Applicability of Covenants in Notes Rated
Investment Grade"); and
(2) incurred a Lien to secure such Indebtedness under the covenant
described under the caption "--Liens" without securing the new
notes; and
(b) the gross cash proceeds of the Sale and Leaseback Transaction are at
least equal to the fair market value (as conclusively determined by the
board of directors) of the property that is the subject of the Sale and
Leaseback Transaction.
Line of Business
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, engage in any business other than Permitted Businesses, except to the
extent as would not be material to Lyondell and its Subsidiaries taken as a
whole.
Merger, Consolidation or Sale of Assets
Lyondell may not consolidate or merge with or into, whether or not Lyondell
is the surviving corporation, or sell, assign, transfer, convey or otherwise
dispose of all or substantially all its assets in one or more related
transactions, to another corporation, Person or entity unless:
(1) Lyondell is the surviving corporation or the entity or the Person
formed by or surviving any consolidation or merger (if other than
Lyondell) or to which the sale, assignment, transfer, conveyance or
other disposition will have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the corporation formed by or surviving any consolidation or merger (if
other than Lyondell) or the corporation to which the sale, assignment,
transfer, lease, conveyance or other disposition will have been made
assumes all the obligations of Lyondell under the new notes issued
under the applicable indenture and the applicable indenture under a
supplemental indenture in form reasonably satisfactory to the Trustee
under that indenture;
(3) immediately after the transaction no Default or Event of Default
exists; and
(4) Lyondell or the entity or Person formed by or surviving any
consolidation or merger (if other than Lyondell), or to which the sale,
assignment, transfer, lease, conveyance or other disposition will have
been made:
(a) will have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of
Lyondell immediately preceding the transaction; and
(b) except with respect to a consolidation or merger of Lyondell with
or into a Person that has no outstanding Indebtedness, will, at the
time of the transaction and after giving pro forma effect thereto
as if the transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness under the Fixed Charge Coverage
Ratio test described in the first paragraph of the covenant in the
applicable indenture described above under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock."
The foregoing restrictions will not prohibit the merger or consolidation of a
Wholly Owned Restricted Subsidiary with Lyondell; provided that, in connection
with the merger or consolidation, no consideration other than common stock in
the surviving Person or Lyondell will be issued or distributed to the
stockholders of Lyondell.
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The sale, assignment, transfer, lease, conveyance or other disposition by
Lyondell of all or substantially all its property or assets taken as a whole to
one or more of Lyondell's Subsidiaries will not relieve Lyondell from its
obligations under the indentures and the new notes. In addition, Lyondell may
not lease all or substantially all its assets to another Person.
Transactions with Affiliates
Lyondell will not, and will not permit any of its Restricted Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless:
(1) the Affiliate Transaction is on an arms-length basis; and
(2) Lyondell delivers to the Trustee:
(a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, a resolution of the board
of directors described in an Officers' Certificate certifying that
the Affiliate Transaction complies with clause (1) above and that
the Affiliate Transaction has been approved by a majority of the
disinterested members of the board of directors; and
(b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $25 million, an opinion as to the
fairness to Lyondell or the Restricted Subsidiary of the Affiliate
Transaction from a financial point of view issued by an investment
banking firm of national standing;
provided that:
(1) transactions or payments under any employment arrangements or employee,
officer or director benefit plans or arrangements entered into by
Lyondell or any of its Restricted Subsidiaries in the ordinary course
of business;
(2) transactions between or among Lyondell and/or its Restricted
Subsidiaries;
(3) any Restricted Payment permitted by the provisions of the applicable
indenture described under the caption "--Restricted Payments," of the
type described in clause (1) or (2) of the first paragraph under this
caption;
(4) customary loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or consultants of
Lyondell or any of its Restricted Subsidiaries;
(5) transactions entered into on an arms-length basis in the ordinary
course of business between Lyondell or any of its Restricted
Subsidiaries and any Joint Venture;
(6) sales, including a sale in exchange for a promissory note of or Equity
Interest in an Accounts Receivable Subsidiary, of accounts receivable
and the provision of billing, collection and other services in
connection therewith, in each case, to an Accounts Receivable
Subsidiary in connection with any Receivables Facility; and
(7) transactions under any contract or agreement in effect on the date of
the applicable indenture as the same may be amended, modified or
replaced from time to time so long as any contract or agreement as so
amended, modified or replaced is, taken as a whole, no less favorable
to Lyondell and its Restricted Subsidiaries than the contract or
agreement as in effect on the date of the applicable indenture (as
conclusively evidenced by a resolution of the board of directors);
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in each case, will not be deemed to be Affiliate Transactions and therefore not
subject to the requirements of clauses (1) and (2) of the initial paragraph
above.
Limitations on Issuances of Guarantees of Indebtedness by Subsidiaries
Lyondell will not permit any Restricted Subsidiary that is not a Subsidiary
Guarantor, directly or indirectly, to Guarantee or secure the payment of any
other Indebtedness of Lyondell or any of its Restricted Subsidiaries, except
Indebtedness of the Restricted Subsidiary or a Restricted Subsidiary of the
Restricted Subsidiary, unless the Restricted Subsidiary:
(1) simultaneously executes and delivers a supplemental indenture to the
applicable indenture providing for the Guarantee of the payment of the
notes issued under the applicable indenture by the Restricted
Subsidiary; and
(2) waives and agrees not in any manner whatsoever to claim or take the
benefit or advantage of, either:
(a) any right to receive payment by way of subrogation against Lyondell
or against any direct or indirect security for the obligation, or
any right to be reimbursed, indemnified or exonerated by or for the
account of Lyondell in respect thereof; or
(b) any right to receive payment, in the nature of contribution or for
any other reason, from any other Subsidiary Guarantor with respect
to the payment, in each case so long as any amount payable by
Lyondell under the applicable indenture or under the new notes
remains unpaid;
provided that this paragraph will not be applicable to (x) any Guarantee of any
Restricted Subsidiary that existed at the time the Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, the
Person becoming a Restricted Subsidiary, (y) Guarantees of Indebtedness of a
Restricted Subsidiary that is a Foreign Subsidiary by a Restricted Subsidiary
that is a Foreign Subsidiary or (z) the granting of Liens by a Joint Venture
Subsidiary to secure Indebtedness under the Existing Credit Facility and the
Senior Secured Notes.
In the case of the Senior Subordinated Notes, if the new notes are
subordinated by their terms to the Guaranteed Indebtedness, then the Subsidiary
Guarantee will be subordinated to the guarantee of the Guaranteed Indebtedness.
If the new notes are pari passu with the Guaranteed Indebtedness, then the
Subsidiary Guarantee will be pari passu with, or senior to, the guarantee of
the Guaranteed Indebtedness. If the new notes are senior to the Guaranteed
Indebtedness, then the Subsidiary Guarantee will be senior to the guarantee of
the Guaranteed Indebtedness at least to the extent that the new notes are
senior to the Guaranteed Indebtedness.
Notwithstanding the foregoing, each Subsidiary Guarantee by a Restricted
Subsidiary will provide by its terms that it will be automatically and
unconditionally released and discharged upon:
(1) any sale, exchange or transfer, to any Person not an Affiliate of
Lyondell, of all Lyondell's and each Restricted Subsidiary's Capital
Stock in the Restricted Subsidiary, which sale, exchange or transfer is
not prohibited by the indentures;
(2) the release or discharge of the Guarantee which resulted in the
creation of the Subsidiary Guarantee or, in the case of the Subsidiary
Guarantee of Lyondell Nederland issued on May 17, 1999, the release or
discharge of its Guarantee of Indebtedness under the Existing Credit
Facility, except a discharge or release by or as a result of payment
under the Guarantee; and
(3) the designation of the Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the indentures.
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Accounts Receivable Facilities
Lyondell may, and any of its Restricted Subsidiaries may, sell at any time
and from time to time, accounts receivable to any Accounts Receivable
Subsidiary. However, the aggregate consideration received in each sale must be
at least equal to the aggregate fair market value of the receivables sold. The
term "sell" includes a sale in exchange for a promissory note of or Equity
Interest in the Accounts Receivable Subsidiary.
No Amendment to Subordination Provisions
Under the Senior Secured Note Indentures, Lyondell may not amend, modify or
alter the Senior Subordinated Note Indenture in any way that would:
(1) increase the principal of, advance the final maturity date of or
shorten the Weighted Average Life to Maturity of any Senior
Subordinated Notes such that the final maturity date of the Senior
Subordinated Notes is earlier than the 91st day following the final
maturity date of the Senior Secured Notes; or
(2) amend the subordination provisions of the Senior Subordinated Note
Indenture or any of the defined terms used in the Senior Subordinated
Note Indenture in a manner that would be adverse to the holders of the
Senior Secured Notes.
No Senior Subordinated Debt
Under the Senior Subordinated Note Indenture, Lyondell and the Subsidiary
Guarantors each may not incur any Indebtedness that under its terms is
subordinate or junior in right of payment to any Senior Indebtedness and senior
in any respect in right of payment to the Senior Subordinated Notes or the
Senior Subordinated Note Guarantees. However, this limitation will not apply to
distinctions between categories of Senior Indebtedness of Lyondell or a
Subsidiary Guarantor that exist by reason of any Liens or Guarantees arising or
created in respect of some but not all the Senior Indebtedness.
Limitation of Applicability of Covenants if New Notes Rated Investment Grade
Notwithstanding the covenants summarized above, Lyondell's and its
Restricted Subsidiaries' obligations to comply with the covenants described
under the captions "Restrictive Covenants--Restricted Payments," "--Incurrence
of Indebtedness and Issuance of Preferred Stock," "--Dividend and other Payment
Restrictions Affecting Subsidiaries," "--Line of Business," "--Limitation on
Issuance of Guarantees of Indebtedness by Subsidiaries," "--Transactions with
Affiliates," "--Accounts Receivable Facilities" and "Repurchase at the Option
of the Holders--Asset Sales" will terminate and cease to have any further
effect from and after the first date when the new notes issued under the
applicable indenture are rated Investment Grade.
Reports
Whether or not required by the rules and regulations of the SEC, so long as
any new notes issued thereunder are outstanding, Lyondell will furnish to each
Trustee and the holders of the new notes:
. all quarterly and annual financial information that would be required to
be contained in a filing with the SEC on Forms 10-Q and 10-K if Lyondell
were required to file those forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by Lyondell's
certified independent accountants; and
. all current reports that would be required to be filed with the SEC on
Form 8-K if Lyondell were required to file those reports.
In addition, whether or not required by the rules and regulations of the
SEC, Lyondell will file a copy of all information and reports with the SEC for
public availability and make this information available to
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securities analysts and prospective investors upon request. In addition,
Lyondell has agreed that, for so long as any new notes remain outstanding, it
will furnish to the holders, securities analysts and prospective investors,
upon their request, the information required to be delivered under Rule
144A(d)(4) under the Securities Act.
Events of Default and Remedies
Each of the following constitutes an Event of Default with respect to the
new notes:
(1) default for 30 days in the payment when due of interest or liquidated
damages, whether or not prohibited by the subordination provisions of
the Senior Subordinated Note Indenture;
(2) default in payment when due of the principal of or premium, if any, on
the new notes, at maturity or otherwise, whether or not prohibited by
the subordination provisions of the Senior Subordinated Note Indenture;
(3) failure by Lyondell to comply with the provisions described under the
captions "--Repurchase at the Option of Holders--Change of Control,"
"--Asset Sales" or "--Restrictive Covenants--Merger, Consolidation or
Sale of Assets";
(4) failure by Lyondell for 60 days after notice by the Trustee or holders
of at least 25% in principal amount of the new notes then outstanding
and issued to comply with any of its other agreements in the applicable
indenture or the new notes;
(5) any default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by Lyondell or any of its
Significant Subsidiaries or any Indebtedness for money borrowed
Guaranteed by Lyondell or any of its Significant Subsidiaries if
Lyondell or a Significant Subsidiary does not perform its payment
obligations under the Guarantee within any grace period provided for in
the documentation governing the Guarantee and, whether the Indebtedness
or Guarantee exists on the date of the applicable indenture or is
thereafter created, which default:
(a) constitutes a Payment Default; or
(b) results in the acceleration of the Indebtedness before its Stated
Maturity;
and in each case, the principal amount of any Indebtedness, together
with the principal amount of any other Indebtedness under which there
has been a Payment Default or that has been so accelerated, aggregates
$50 million or more;
(6) failure by Lyondell or any of its Significant Subsidiaries to pay a
final judgment or final judgments aggregating in excess of $50 million,
which judgment or judgments are not paid, discharged or stayed for a
period of 60 days;
(7) specified events of bankruptcy or insolvency with respect to Lyondell
or any of its Significant Subsidiaries;
(8) except as permitted by the applicable indenture:
(a) any Subsidiary Guarantee will be held in any judicial proceeding to
be unenforceable or invalid or will cease for any reason to be in
full force and effect or any Subsidiary Guarantor; or
(b) any Person acting on behalf of any Subsidiary Guarantor, will deny
or disaffirm its obligations under the Subsidiary Guarantees; and
(9) in the case of the Senior Secured Notes:
(a) any of the Security Documents ceases to be in full force and
effect;
(b) any of the Security Documents ceases to give the holders of the
Senior Secured Notes any of the Liens purported to be created
thereby;
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(c) any of the Security Documents is declared null and void; or
(d) Lyondell or any Restricted Subsidiary denies in writing that it has
any further liability under any Security Document or gives written
notice to that effect;
However, it will not be an Event of Default if the event described in
clause (9) above occurs in accordance with the terms of the applicable
indenture or the terms of the Existing Credit Facility or the Security
Documents, including the cessation of effectiveness of any Security
Document in connection with the release of all collateral covered
thereby according to the terms of the applicable indenture, the
Existing Credit Facility and the Security Document, or if an event
occurs that is waived by the requisite lenders under the Existing
Credit Facility and, after that waiver, Lyondell is in compliance with
the covenant described under "--Security." However, if a failure of the
sort described in this clause (9) is susceptible of cure, no Event of
Default will arise under this clause (9) with respect thereto until 30
days after notice of the failure will have been given to Lyondell by
the applicable Senior Secured Note Trustee or holders of at least 25%
in principal amount of the then outstanding notes issued under the
applicable indenture.
If an Event of Default other than an Event of Default specified in clause
(7) above that occurs with respect to Lyondell or any Subsidiary Guarantor
occurs and is continuing under any indenture, the Trustee or the holders of at
least 25% in aggregate principal amount of the Series A Senior Secured Notes,
or Senior Subordinated Notes, as the case may be, then outstanding, by written
notice to Lyondell and to the applicable Trustee if the notice is given by the
holders (the "Acceleration Notice"), may, and the applicable Trustee at the
request of the holders will, declare the principal of and premium, if any, and
accrued interest and liquidated damages, if any, on the new notes to be
immediately due and payable. Upon a declaration of acceleration, the principal,
premium, if any, and accrued interest and liquidated damages, if any, will be
immediately due and payable. If an Event of Default specified in clause (7)
above occurs with respect to Lyondell or any Subsidiary Guarantor, the
principal of and premium, if any, and accrued interest and liquidated damages,
if any, on the new notes then outstanding will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder.
The holders of at least a majority in principal amount of the then
outstanding Series A Senior Secured Notes, Series B Senior Secured Notes or
Senior Subordinated Notes, as the case may be, by written notice to Lyondell
and to the applicable Trustee, may waive all past defaults and rescind and
annul a declaration of acceleration and its consequences under the Series A
Senior Secured Notes, Series B Senior Secured Notes or Senior Subordinated
Notes, as the case may be, if:
(1) all existing Events of Default, other than the nonpayment of the
principal of and premium, if any, and interest and liquidated damages,
if any, on the new notes that have become due solely by the declaration
of acceleration, have been cured or waived; and
(2) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction.
For information as to the waiver of defaults, see "--Modification and
Waiver."
The holders of at least a majority in aggregate principal amount of the then
outstanding Series A Senior Secured Notes, Series B Senior Secured Notes or
Senior Subordinated Notes, 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 the applicable Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or the applicable indenture, that may involve the Trustee in personal
liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of holders of the Series A Senior Secured Notes,
Series B Senior Secured Notes or Senior Subordinated Notes, as the case may be,
not joining in the giving of the direction and may take any other action it
deems proper that is not inconsistent with any direction received from holders
of the Series A Senior Secured Notes, Series B Senior Secured Notes or Senior
Subordinated Notes, as the case may be.
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A holder may not pursue any remedy with respect to the applicable indenture
or the Series A Senior Secured Notes, Series B Senior Secured Notes or Senior
Subordinated Notes, as the case may be, unless:
(1) the holder gives the Trustee written notice of a continuing Event of
Default;
(2) the holders of at least 25% in aggregate principal amount of
outstanding Series A Senior Secured Notes, Series B Senior Secured
Notes or Senior Subordinated Notes, as the case may be, make a written
request to the Trustee to pursue the remedy;
(3) the holder or holders offer the applicable Trustee indemnity
satisfactory to the Trustee against any costs, 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 the 60-day period, the holders of at least a majority in
aggregate principal amount of the outstanding Series A Senior Secured
Notes, Series B Senior Secured Notes or Senior Subordinated Notes, as
the case may be, do not give the Trustee a direction that is
inconsistent with the request.
However, these limitations do not apply to the right of any holder of a Series
A Senior Secured Note, Series B Senior Secured Note or Senior Subordinated
Note, as the case may be, to receive payment of the principal of or premium, if
any, interest or liquidated damages, if any, on the new notes or to bring suit
for the enforcement of the payment, on or after the due date expressed in the
new notes, which right will not be impaired or affected without the consent of
the holder.
Specified officers of Lyondell must certify, on or before a date not more
than 120 days after the end of each fiscal year, that they have conducted or
supervised a review of the activities of Lyondell and its Restricted
Subsidiaries and Lyondell's and its Restricted Subsidiaries' performance under
the applicable indenture and that, to the best of the officer's knowledge,
based upon this review, Lyondell has fulfilled all obligations under the
indenture. If there has been a default in the fulfillment of any obligation
under the applicable indenture, the certifying officers must specify each
default and the nature and status of any default. Lyondell will also be
obligated to notify the applicable Trustee promptly of any default or defaults
in the performance of any covenants or agreements under any indenture.
Modification and Waiver
Modifications and amendments of the indentures may be made by Lyondell, the
Subsidiary Guarantors and the Trustee with the consent of the holders of not
less than a majority in aggregate principal amount of the then outstanding
Series A Senior Secured Notes, Series B Senior Secured Notes or Senior
Subordinated Notes, as the case may be. However, without the consent of each
holder affected thereby, no modification or amendment may:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any new note;
(2) reduce the principal amount of or premium, if any, or interest or
liquidated damages, if any, on any new note;
(3) reduce any amount payable on redemption of the new notes or upon the
occurrence of an Event of Default or reduce the Change of Control
Payment or the amount to be paid in connection with an Asset Sale
Offer;
(4) change the place or currency of payment of principal of or premium, if
any, or interest or liquidated damages, if any, on any new note;
(5) impair the right to institute suit for the enforcement of any payment
on or after the Stated Maturity or, in the case of a redemption, on or
after the Redemption Date, of any new note;
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(6) reduce the above-stated percentage of the then outstanding notes the
consent of whose holders is necessary to modify or amend an indenture;
(7) waive a default in the payment of principal of or premium, if any, or
interest or liquidated damages, if any, on the new notes, except as
stated in the penultimate sentence of the second paragraph under the
caption "--Events of Default and Remedies";
(8) reduce the percentage or aggregate principal amount of the then
outstanding notes the consent of whose holders is necessary for waiver
of compliance with provisions of an indenture or for waiver of
defaults;
(9) modify or change any provision of an indenture affecting the ranking of
the new notes or the Subsidiary Guarantees in a manner adverse to the
holders of the new notes;
(10) release any Subsidiary Guarantor from any of its obligations under its
Subsidiary Guarantee or an indenture other than in accordance with the
provisions of the indenture, or amend or modify any provision relating
to the release; or
(11) in the case of the Senior Secured Notes Indentures, directly or
indirectly release the Liens created by the Security Documents on all
or substantially all the Collateral, other than in accordance with the
terms of the Existing Credit Facility or the Security Documents or
with the consent of the requisite lenders under the Existing Credit
Facility if, after the consent, Lyondell is in compliance with the
covenant described under "--Security".
Neither Lyondell nor any of its Subsidiaries or Affiliates will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any new notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of any indenture or the new notes issued thereunder unless the
consideration is offered to be paid or agreed to be paid to all holders of the
new notes that consent, waive or agree to amend the term or provision in the
time frame stated in the solicitation documents relating to the consent, waiver
or agreement.
Defeasance
Defeasance and Discharge. Lyondell will be deemed to have paid and will be
discharged from any and all obligations in respect of the new notes issued
under any indenture, and any Subsidiary Guarantor will be discharged from any
and all obligations in respect of its Subsidiary Guarantee on the 123rd day
after the deposit referred to below. Thereafter the provisions of the
applicable indenture will no longer be in effect with respect to the new notes
and the Subsidiary Guarantees except for, among other matters, obligations to
register the transfer or exchange of the new notes, to replace stolen, lost or
mutilated notes, to maintain paying agencies and to hold monies for payment in
trust, if, among other things:
(1) Lyondell has deposited with the Trustee, in trust, money and/or U.S.
Government obligations that through the payment of interest and
principal in respect of which obligations in accordance with their
terms will provide money in an amount sufficient to pay the principal
of and premium, if any, and accrued interest and liquidated damages, if
any, on the new notes on the Stated Maturity of the payments in
accordance with the terms of the applicable indenture and the new notes
to redemption or maturity, as the case may be;
(2) Lyondell has delivered to the Trustee:
(a) either (x) an opinion of counsel to the effect that holders will
not recognize income, gain or loss for federal income tax purposes
as a result of Lyondell's exercise of its option under this
"Defeasance" provision 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 the deposit, defeasance and discharge
had not occurred, which opinion of counsel must be based upon and
accompanied by a copy of a ruling of the Internal Revenue Service
to the same effect unless there has been a
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change in applicable federal income tax law after May 17, 1999 such
that a ruling is no longer required or (y) a ruling directed to the
Trustee or Lyondell received from the Internal Revenue Service to the
same effect as the aforementioned opinion of counsel; and
(b) an opinion of counsel to the effect that the creation of the
defeasance trust does not violate the Investment Company Act of 1940
and after the passage of 123 days following the deposit, the trust
fund will not be subject to the effect of Section 547 of the United
States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law, or any comparable provision or applicable law;
(3) immediately after giving effect to the deposit on a pro forma basis, no
Event of Default, or event that after the giving of notice or lapse of
time or both would become an Event of Default, will have occurred and
be continuing on the date of the deposit or during the period ending on
the 123rd day after the date of the deposit, and the deposit will not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which Lyondell is a party or by which
Lyondell is bound; and
(4) if at such time the new notes are listed on a national securities
exchange, Lyondell has delivered to the Trustee an opinion of counsel
to the effect that the new notes will not be delisted as a result of
the deposit, defeasance and discharge.
Defeasance of Covenants and Events of Default. The provisions of an
indenture will no longer be in effect with respect to the provision described
under "--Security," clause (4) under "--Merger, Consolidation and Sale of
Assets" and all the covenants described under "--Restrictive Covenants," and
clauses (3) and (4) under "--Events of Default" with respect to the covenants
and clause (4) under "--Merger, Consolidation and Sale of Assets," and clauses
(5), (6) and (9) under "--Events of Default" will be deemed not to be Events
of Default, upon, among other things, the deposit with the applicable Trustee,
in trust, of money and/or U.S. Government obligations that through the payment
of interest and principal in respect of which obligations in accordance with
their terms will provide money in an amount sufficient to pay the principal of
and premium, if any, and accrued interest and liquidated damages, if any, on
the new notes on the Stated Maturity of the payments in accordance with the
terms of the applicable indenture and the new notes, the satisfaction of the
provisions described in clauses (2)(b), (3) and (4) of the preceding paragraph
and the delivery by Lyondell to the Trustee of an opinion of counsel to the
effect that, among other things, the holders will not recognize income, gain
or loss for federal income tax purposes as a result of the deposit and
defeasance of some covenants and Events of Default 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 the deposit and defeasance had not
occurred.
Defeasance and Other Events of Default. In the event Lyondell exercises its
option to omit compliance with some covenants and provisions of any indenture
with respect to the new notes issued thereunder as described in the
immediately preceding paragraph and the new notes are declared due and payable
because of the occurrence of an Event of Default that remains applicable, the
amount of money and/or U.S. Government obligations on deposit with the
applicable Trustee will be sufficient to pay amounts due on the new notes at
the time of their Stated Maturity but may not be sufficient to pay amounts due
on the new notes at the time of the acceleration resulting from the Event of
Default. However, Lyondell will remain liable for these payments.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder or other holder
of Equity Interests of Lyondell or the Subsidiary Guarantors, as such, will
have any liability for any obligations of Lyondell or the Subsidiary
Guarantors under the new notes, the Subsidiary Guarantees, the indentures or
for any claim based on, in respect of, or by reason of, the obligations or
their creation. Each holder of new notes by accepting a new note waives and
releases all liability with respect to these persons. The waiver and release
are part of the consideration for the issuance of the new notes. The waiver
may not be effective to waive liabilities under the federal securities laws
and it is the view of the SEC that this waiver is against public policy.
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Transfer and Exchange
A holder may transfer or exchange new notes in accordance with the
indentures. The Registrar and the Trustees may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and Lyondell
may require a holder to pay any taxes and fees required by law or permitted by
the indentures.
The registered holder of a new note will be treated as the owner of the new
note for all purposes.
Concerning the Trustee
Each indenture contains limitations on the rights of the applicable Trustee,
should it become a creditor of Lyondell, to obtain payment of claims in some
cases, or to realize on some property received in respect of any claim as
security or otherwise. Each Trustee will be permitted to engage in other
transactions. However, if a Trustee acquires any conflicting interest it must
eliminate the conflict within 90 days, apply to the SEC for permission to
continue or resign.
The holders of a majority in principal amount of the then outstanding notes
issued under an indenture will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
applicable Trustee, subject to some exceptions. In case an Event of Default
occurs (which will not be cured), the Trustee will be required, in the exercise
of its power, to use the degree of care of a prudent man in the conduct of his
own affairs. Subject to these provisions, the Trustees will not be under any
obligation to exercise any rights or powers under the indentures at the request
of any holder of new notes, unless the holder will have offered to the
applicable Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
The Bank of New York will act as trustee for each series of the new notes
and is also the transfer agent for Lyondell's stock and a lender under its
credit facility.
Definitions
We have provided below a summary of capitalized terms used in this summary
description of the new notes. Please refer to the indentures for full
definitions of these terms as well as any other capitalized terms used in this
prospectus for which no definition is provided.
"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of
Lyondell:
(1) which is formed solely for the purpose of, and which engages in no
activities other than activities in connection with, financing accounts
receivable of Lyondell and/or its Restricted Subsidiaries;
(2) which is designated by Lyondell as an Accounts Receivables Subsidiary
under an Officers' Certificate delivered to the Trustee;
(3) no portion of Indebtedness or any other obligation, contingent or
otherwise, of which is at any time recourse to or obligates Lyondell or
any Restricted Subsidiary in any way, or subjects any property or asset
of Lyondell or any Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than
under:
(a) representations, warranties and covenants or any indemnity with
respect to those representations, warranties and covenants entered
into in the ordinary course of business in connection with the sale
of accounts receivable to the Accounts Receivable Subsidiary; or
(b) any guarantee of any accounts receivable financing by Lyondell or
any Restricted Subsidiary that is permitted to be incurred under
the covenant described under the caption entitled "--Restrictive
Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock";
(4) with which neither Lyondell nor any Restricted Subsidiary of Lyondell
has any contract, agreement, arrangement or understanding other than
contracts, agreements, arrangements and understandings
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entered into in the ordinary course of business in connection with the
sale of accounts receivable in accordance with the covenant described
under the caption "--Restrictive Covenants--Accounts Receivable
Facilities" and fees payable in the ordinary course of business in
connection with servicing accounts receivable; and
(5) with respect to which neither Lyondell nor any Restricted Subsidiary of
Lyondell has any obligation:
(a) to subscribe for additional shares of Capital Stock or other Equity
Interests or make any additional capital contribution or similar
payment or transfer thereto other than in connection with the sale
of accounts receivable to the Accounts Receivable Subsidiary in
accordance with the covenant described under "--Restrictive
Covenants--Accounts Receivable Facilities"; or
(b) to maintain or preserve the solvency, any balance sheet term,
financial condition, level of income or results of operations
thereof.
The references above to sales of accounts receivable to the Accounts
Receivable Subsidiary include a sale in exchange for a promissory note of or
Equity Interest in the Accounts Receivable Subsidiary.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time the other Person
is merged with or into or became a Subsidiary of the specified Person,
including, without limitation, Indebtedness incurred in connection
with, or in contemplation of, the other Person merging with or into or
becoming a Subsidiary of the specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by the
specified Person.
"Acquired Disqualified Stock" means, with respect to any specified Person,
Disqualified Stock of any other Person existing at the time the other Person
is merged with or into or became a Subsidiary of the specified Person,
including, without limitation, Disqualified Stock incurred in connection with,
or in contemplation of, the other Person merging with or into or becoming a
Subsidiary of the specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time the other Person is
merged with or into or became a Subsidiary of the specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, the other Person merging with or into or becoming a
Subsidiary of the specified Person.
"Acquiring Person" means a Person other than a Subject Assets Transferee
which acquires:
(1) all or a portion of the Subject Assets; or
(2) an interest in a Subject Assets Transferee in connection with a Major
Asset Sale.
"Adjusted Consolidated Cash Flow" means, for any period, the sum of
Consolidated Cash Flow of Lyondell for that period plus the aggregate
Distributable Joint Venture Cash Flow of Lyondell and its Restricted
Subsidiaries, determined on a consolidated basis, for that period.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with that specified Person. For purposes of this definition,
"control", as used with respect to any Person, will mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of the Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that beneficial ownership of
10% or more of the voting securities of a Person will be deemed to be control;
provided further that the foregoing proviso will not apply for purposes of
clauses (g) and (i) of the covenant described under "--Restricted Payments" or
clause (d) of the definition of "Unrestricted Subsidiaries." The terms
"controlling," "controlled by" and "under common control with" have the
correlative meanings to the term "control."
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"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition, other than the
creation of a Lien, of any assets other than the disposition of
inventory, equipment or Cash Equivalents in the ordinary course of
business consistent with past practices; provided that the sale,
conveyance or other disposition of all or substantially all the assets
of Lyondell and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of the indentures described above under the
caption "Repurchase at the Option of Holders--Change of Control" and/or
the provisions described above under the caption "Restrictive
Covenants--Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant;
(2) the sale by Lyondell or any of its Restricted Subsidiaries of Equity
Interests of any of Lyondell's Restricted Subsidiaries, Unrestricted
Subsidiaries or Joint Ventures; and
(3) the issuance by any of Lyondell's Restricted Subsidiaries of Equity
Interests of the Restricted Subsidiary, in the case of clauses (1), (2)
or (3), whether in a single transaction or a series of related
transactions:
(a) that have a fair market value in excess of $25 million; or
(b) for Net Proceeds in excess of $25 million.
Notwithstanding the foregoing:
(1) a transfer of assets by Lyondell to a Restricted Subsidiary or by a
Restricted Subsidiary to Lyondell or to another Restricted Subsidiary;
(2) an issuance of Equity Interests by a Restricted Subsidiary to Lyondell
or to another Restricted Subsidiary;
(3) a Restricted Payment that is permitted by the covenant described under
the caption "--Restrictive Covenants--Restricted Payments";
(4) an issuance of Preferred Stock by a Finance Subsidiary that is
permitted by the covenant described under the caption "--Restrictive
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock";
(5) sales, including a sale in exchange for a promissory note of or Equity
Interest in the Accounts Receivable Subsidiary, of accounts receivable
to an Accounts Receivable Subsidiary in connection with any Receivables
Facility; and
(6) Sale and Leaseback Transactions
will not be deemed to be an Asset Sale.
"Asset Sale Lien" means a Lien on the Subject Assets, including as a Lien
for this purpose contractual rights with respect to the operation of the
Subject Assets, arising in connection with a Major Asset Sale in favor of the
Acquiring Person or an Affiliate thereof which Lien does not secure any
Indebtedness.
"Attributable Debt" in respect of a Sale and Leaseback Transaction that is
treated as a capital lease in accordance with GAAP means, at the time of
determination, the present value discounted at the rate of interest implicit in
the transaction, determined in accordance with GAAP of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in the Sale and Leaseback Transaction, including any period for which the lease
has been extended or may, at the option of the lessor, be extended.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
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(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership, partnership interests, whether general or
limited; and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality of the United
States government, provided that the full faith and credit of the
United States is pledged in support of the securities having maturities
of not more than one year from the date of acquisition;
(3) demand deposits, time deposits and certificates of deposit with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year from the date of
acquisition and overnight bank deposits, in each case with any bank or
trust Lyondell organized or licensed under the laws of the United
States or any State having capital, surplus and undivided profits in
excess of $500 million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the type described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper rated as least P-1 or A-1 by Moody's or S&P,
respectively, and in each case maturing within six months after the
date of acquisition;
(6) any fund investing exclusively in investments of the type described in
clauses (1) through (5) above; and
(7) in the case of a Foreign Subsidiary, substantially similar investments
denominated in foreign currencies (including similarly capitalized
foreign banks).
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of that Person for that period, less the Net Income
of any Joint Venture to the extent included therein under clause (1) of the
definition of "Consolidated Net Income," plus, in each case, without
duplication:
(1) provision for taxes based on income or profits of the Person and its
Restricted Subsidiaries for the period, including any provision for
taxes on the Net Income of any Joint Venture that is a pass-through
entity for federal income tax purposes, to the extent the taxes are
paid or payable by the Person or any of its Restricted Subsidiaries, to
the extent that the provision for taxes was included in computing the
Consolidated Net Income;
(2) the Fixed Charges of the Person and its Restricted Subsidiaries for the
period, to the extent that the Fixed Charges were deducted in computing
the Consolidated Net Income;
(3) depreciation and amortization, including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period, of the Person and its Restricted
Subsidiaries for the period to the extent that the depreciation and
amortization were deducted in computing the Consolidated Net Income;
and
(4) any non-cash charges reducing Consolidated Net Income for the period,
excluding any non-cash charge to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period;
minus
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(5) any non-cash items increasing Consolidated Net Income for the period;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary
of the Person will be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent and in the same proportion that the Net Income of
the Restricted Subsidiary was included in calculating the Consolidated Net
Income of the Person.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of that Person and its Restricted Subsidiaries
for that period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary will
be included only to the extent of the lesser of (x) the amount of
dividends or distributions paid in cash but not by means of a loan to
that Person or a Restricted Subsidiary thereof or (y) that Person's or
a Restricted Subsidiary of that Person's proportionate share of the Net
Income of the other Person;
(2) the Net Income (but not loss) of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period before the date of the acquisition will be
excluded; and
(4) the cumulative effect of a change in accounting principles will be
excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of:
(1) the consolidated equity of the common stockholders of the Person and
its Restricted Subsidiaries as of the date; plus
(2) the respective amounts reported on the Person's balance sheet as of the
date with respect to any series of Preferred Stock (other than
Disqualified Stock);
less all write-ups, other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business made
in accordance with GAAP as a result of the acquisition of the business,
subsequent to the date of the applicable indenture in the book value of any
asset owned by the Person or a consolidated Restricted Subsidiary of the
Person, and excluding the cumulative effect of a change in accounting
principles, all as determined in accordance with GAAP.
"Disqualified Stock" means any Capital Stock that, by its terms or by the
terms of any security into which it is convertible or for which it is
exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable, under a sinking fund obligation or otherwise, or redeemable at the
option of the holder, in whole or in part, on or before the date on which the
notes mature; provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions giving holders the right to require the
Person to repurchase or redeem the Capital Stock upon the occurrence of an
"asset sale" or "change of control" occurring before the date on which the new
notes mature will not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to the Capital Stock are no more
favorable to the holders of the Capital Stock than the provisions contained in
"Repurchase at the Option of the Holders--Asset Sales" with respect to the
Senior Subordinated Notes and "--Change of Control" covenants described above
and the Capital Stock specifically provides that the Person will not repurchase
or redeem any stock under the provision before Lyondell's repurchase of the new
notes as are required under the covenants.
"Distributable Joint Venture Cash Flow" means, with respect to any Person
for any period, in the case of each Joint Venture that is not a Restricted
Subsidiary of that Person, the sum of:
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(1) the lesser of:
(a) the amount of dividends or distributions paid in cash but not by
means of a loan by the Joint Venture to that Person or a Restricted
Subsidiary; or
(b) the Person's or a Restricted Subsidiary of that Person's
proportionate share of:
(i) the Net Income of the Joint Venture for the period, plus
(ii) to the extent deducted therefrom, depreciation and
amortization, including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period, of the Joint Venture for the
period, plus
(iii) any non-cash charges reducing Net Income of the Joint Venture
for the period, excluding any non-cash charge to the extent
that it represents an accrual of or reserve for cash expenses
in any future period or amortization of a prepaid cash expense
that was paid in a prior period, less
(iv) any non-cash items increasing Net Income of the Joint Venture
for the period, minus
(2) the aggregate amount of all Investments made by Lyondell or any of its
Restricted Subsidiaries in the Joint Venture during the period under
clause (h) of the covenant described under "--Restrictive Covenants--
Restricted Payments," in each case determined on a consolidated basis
and in accordance with GAAP.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock.
"Equistar Assumed Debt" means:
(1) the 10.00% Notes Due 1999 issued by Lyondell under the Indenture dated
as of May 31, 1989 between Lyondell and Texas Commerce Bank, National
Association, as trustee, as supplemented by the First Supplemental
Indenture dated as of May 31, 1989 and the Second Supplemental
Indenture dated as of December 1, 1997;
(2) the 9.125% Notes Due 2002 issued by Lyondell under an Indenture dated
as of March 10, 1992 between Lyondell and First Trust National
Association, as trustee, as supplemented by the First Supplemental
Indenture dated as of March 10, 1992 and the Second Supplemental
Indenture dated as of December 1, 1997;
(3) the 6.5% Notes Due 2006 and 7.55% Notes Due 2026, each issued by
Lyondell under an Indenture dated as of January 29,1996 between
Lyondell and Texas Commerce Bank National Association, as trustee, as
supplemented by the First Supplemental Indenture dated as of February
15, 1996 and the Second Supplemental Indenture dated as of December 1,
1997; and
(4) Indebtedness under the medium term notes issued by Lyondell, maturing
at various dates from 1998 to 2005; in each case outstanding as of May
17, 1999 and with respect to which, as between Lyondell and Equistar,
Equistar is the primary obligor and Lyondell is an obligor;
in each case, as may be amended from time to time, provided that any amendment
does not increase the principal amount or interest rate applicable or shorten
the Weighted Average Life to Maturity or Stated Maturity thereof or add any
Restricted Subsidiary as an obligor with respect to the debt.
"Existing ARCO Chemical Debt" means the 9.9% Debentures Due 2000, the 9.375%
Debentures Due 2005, the 10.25% Debentures Due 2010 and the 9.8% Debentures Due
2020, all issued by ARCO Chemical under the Indenture dated June 15, 1988 among
ARCO Chemical and The Bank of New York, as Trustee.
"Existing Credit Facility" means the Credit Agreement dated as of July 23,
1998 by and among Lyondell and Morgan Guaranty Trust of New York, as
administrative agent, DLJ Capital Funding, Inc., as syndication
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agent, and the other lenders that are party thereto, including any related
notes, instruments, and agreements executed in connection therewith, as
amended, restated, modified, extended, renewed, refunded, replaced or
refinanced, in whole or in part, from time to time, whether or not with the
same lenders or agents.
"Existing Indebtedness" means Indebtedness of Lyondell and its Restricted
Subsidiaries in existence, and considered Indebtedness of Lyondell or any of
its Restricted Subsidiaries, on May 17, 1999, until these amounts are repaid,
including all reimbursement obligations with respect to letters of credit
outstanding as of the date of the applicable indenture.
"Finance Subsidiary" means a Restricted Subsidiary of Lyondell, all the
Capital Stock of which (other than Preferred Stock) is owned by Lyondell that
does not engage in any activity other than:
(1) holding of Indebtedness of Lyondell;
(2) the issuance of Capital Stock; and
(3) any activity necessary, incidental or related to the foregoing.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Adjusted Consolidated Cash Flow of that Person for
that period to the Fixed Charges of that Person for that period. In the event
that Lyondell or any of its Restricted Subsidiaries incurs, assumes or redeems
any Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated but before the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to the incurrence, assumption or redemption
of Indebtedness, or the issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of making the computation referred to above:
(1) acquisitions that have been made by Lyondell or any of its Restricted
Subsidiaries, including through mergers or consolidations and including
any related financing transactions, during the four-quarter reference
period or subsequent to the reference period and on or before the
Calculation Date will be deemed to have occurred on the first day of
the four-quarter reference period;
(2) the Adjusted Consolidated Cash Flow and Fixed Charges attributable to
operations or businesses disposed of before the Calculation Date, will
be excluded, but, in the case of the Fixed Charges, only to the extent
that the obligations giving rise to the Fixed Charges will not be
obligations of the Person or any of its Restricted Subsidiaries
following the Calculation Date; and
(3) if since the beginning of the four-quarter reference period any Person
was designated as an Unrestricted Subsidiary or redesignated as or
otherwise became a Restricted Subsidiary, the event will be deemed to
have occurred on the first day of the four-quarter reference period.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of:
(1) the consolidated interest expense of the Person and its Restricted
Subsidiaries for the period, whether paid or accrued, including,
without limitation, amortization of original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letters of credit or bankers' acceptance
financings and net payments or receipts (if any) under Hedging
Obligations;
(2) the consolidated interest expense of the Person and its Restricted
Subsidiaries that was capitalized during the period;
(3) any interest expense on Indebtedness of another Person, other than Non-
Recourse Debt of a Joint Venture or Unrestricted Subsidiary secured by
a pledge by Lyondell or any Restricted Subsidiary of
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Capital Stock which pledge is permitted by clause (k) or (l) of the
covenant described under the caption "--Restrictive Covenants--
Restricted Payments", that is Guaranteed by the Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of the Person or
one of its Restricted Subsidiaries (whether or not Guarantee or Lien is
called upon); and
(4) the product of:
(a) all dividend payments other than any payments to the Person or any
of its Restricted Subsidiaries on any series of Preferred Stock of
the Person and its Restricted Subsidiaries; times
(b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and
local statutory tax rate of the Person, expressed as a decimal;
in each case, on a consolidated basis and in accordance with GAAP; provided
that interest payments by Equistar on the Equistar Assumed Debt and interest
payments on Indebtedness of a Joint Venture will, in each case, not be deemed
Fixed Charges of Lyondell as of any date of determination when the Indebtedness
is not considered Indebtedness of Lyondell or any Restricted Subsidiary of
Lyondell.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly Guaranteeing any Indebtedness or Disqualified Stock of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of the Person:
(1) to purchase or pay or advance or supply funds for the purchase or
payment of the Indebtedness or Disqualified Stock of the other Person,
including those arising by virtue of partnership arrangements other
than, in the case of Lyondell or a Restricted Subsidiary of Lyondell,
with respect to the obligations of a Joint Venture, solely by virtue of
a Restricted Subsidiary of Lyondell being the General Partner of the
Joint Venture if, as of the date of determination, no payment on the
Indebtedness or obligation has been made by the General Partner of the
Joint Venture and the arrangement would not be classified and accounted
for, in accordance with GAAP, as a liability on a consolidated balance
sheet of Lyondell; or
(2) entered into for purposes of assuring in any other manner the obligee
of the Indebtedness or Disqualified Stock of payment or to protect the
obligee against loss in whole or in part, including by agreement to
keep-well, to purchase assets, goods, securities or services, to take-
or-pay, to maintain financial statement conditions or otherwise;
provided that the term "Guarantee" will not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Hedging Obligations" means, with respect to any Person, the obligations of
that Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements;
(2) forward foreign exchange contracts or currency swap agreements;
(3) other agreements or arrangements designed to protect the Person against
fluctuations in interest rates or currency values; and
(4) agreements designed to protect the Person against fluctuations in raw
material prices.
"Indebtedness" means, with respect to any Person, any indebtedness of that
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit or
reimbursement agreements in respect of the indebtedness or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing net Hedging Obligations,
except any balance that constitutes an accrued expense or trade payable, if and
to the extent any of the foregoing indebtedness, other than letters of credit
and Hedging Obligations, would appear as a liability on a balance sheet of the
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of the Person whether or not the indebtedness
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is assumed by the Person (provided that, for purposes of determining the amount
of any Indebtedness of the type described in this clause, if recourse with
respect to the Indebtedness is limited to the asset, the amount of the
Indebtedness will be limited to the lesser of the fair market value of the
asset or the amount of the Indebtedness) and, to the extent not otherwise
included, the Guarantee by the Person of any indebtedness of the types
described above of any other Person; provided that Indebtedness will not
include the pledge by Lyondell or any of its Restricted Subsidiaries of the
Capital Stock of a Joint Venture Subsidiary, Unrestricted Subsidiary or Joint
Venture permitted by clauses (k) or (l) of the covenant described above under
the caption "Restrictive Covenants--Restricted Payments" to secure Non-Recourse
Debt of the Unrestricted Subsidiary or Joint Venture.
The Equistar Assumed Debt will not constitute Indebtedness of Lyondell as of
any date of determination if Lyondell has not made any principal or interest
payments on the Indebtedness after May 17, 1999; provided that, the payment by
Lyondell of any principal or interest thereon will be deemed to be an
incurrence of the Indebtedness on the day of the payment.
The amount of any Indebtedness outstanding as of any date will be (i) the
accreted value of the Indebtedness, in the case of any Indebtedness that does
not require current payments of interest and (ii) the principal amount of the
Indebtedness, together with any interest thereon that is more than 30 days past
due, in the case of any other Indebtedness.
"Investment Grade" means a rating of BBB- or higher by S&P or Baa3 or higher
by Moody's or the equivalent of the ratings by S&P or Moody's. In the event
that Lyondell will select any other Rating Agency under the provisions of the
definition of "Rating Agency", the equivalent of the ratings by the Rating
Agency will be used.
"Investments" means, with respect to any Person, all investments by the
Person in another Person, including an Affiliate of the Person, in the form of
direct or indirect loans, advances or extensions of credit to the other Person,
including any Guarantee by the Person of the Indebtedness or Disqualified Stock
of the other Person, or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of the other Person, together with all items that are or would be
classified as investments of the investing Person on a balance sheet prepared
in accordance with GAAP; provided that (x) trade credit and accounts receivable
in the ordinary course of business, (y) commissions, loans, advances, fees and
compensation paid in the ordinary course of business to officers, directors and
employees and (z) reimbursement obligations in respect of letters of credit and
tender, bid, performance, government contract, surety and appeal bonds, in each
case solely with respect to obligations of Lyondell or any of its Restricted
Subsidiaries will not be considered Investments. If Lyondell or any Restricted
Subsidiary of Lyondell sells or otherwise disposes of any Equity Interests of
any direct or indirect Restricted Subsidiary of Lyondell such that, after
giving effect to any sale or disposition, the Person is no longer a Restricted
Subsidiary of Lyondell, Lyondell will be deemed to have made an Investment on
the date of any sale or disposition equal to the fair market value of the
Equity Interests of the Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the first paragraph of the covenant described
above under the caption "--Restrictive Covenants--Restricted Payments."
"Joint Venture Subsidiary" means a Subsidiary of Lyondell or any of its
Subsidiaries that has no assets and conducts no operations other than its
ownership of Equity Interests of a Joint Venture.
"Major Asset Sale" means an Asset Sale designated by Lyondell by prior
notice to the Trustees as a Major Asset Sale, so long as in connection
therewith:
(1) Lyondell receives Net Proceeds in an aggregate amount not less than
$1,000,000,000 which will be deemed Net Proceeds of the Major Asset
Sale for purposes of the covenant described under the caption "--Asset
Sales";
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(2) at the time of the Major Asset Sale and after giving effect thereto, no
Default will exist;
(3) the sum of the gross cash proceeds received by Lyondell in respect of
the Major Asset Sale plus the value of the interest of Lyondell in the
Subject Assets Transferee (if any) after giving effect to the Major
Asset Sale is not less than the value (as conclusively determined by
the board of directors of Lyondell) of the portion of the Subject
Assets transferred by Lyondell in connection with the Major Asset Sale;
and
(4) Lyondell directly or indirectly is the operator of the Subject Assets
in which it or a Subject Assets Transferee retains an interest.
For purposes of clause (1) above of this definition:
(1) a transaction which produces substantially the same economic result as
a sale of a partial interest in an asset, as might be achieved, for
instance, through contractual arrangements allocating future revenues
and costs attributable to the asset, will be deemed an Asset Sale even
though there may be no change in title to the asset or in the ownership
of the Person which has title to the asset; and
(2) a subsequent related transaction with the same Acquiring Person or an
Affiliate of the Acquiring Person contemplated by the terms of the
initial Major Asset Sale with the Person will, for purposes of
determining the applicability of and compliance with this definition,
be deemed a single cumulative transaction.
"Net Income" means, with respect to any Person, the net income (loss) of
that Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes on the
gain or loss, realized in connection with:
(a) any Asset Sale or any disposition under a Sale and Leaseback
Transaction; or
(b) the disposition of any securities by the Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness
of the Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related provision for
taxes on the extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds, excluding any proceeds
deemed to be "cash" under the covenant described above under "--Repurchase at
the Option of the Holders--Asset Sales," received by Lyondell or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-
cash consideration received in any Asset Sale), net of the direct costs
relating to the Asset Sale, including, without limitation, legal, accounting
and investment banking fees and sales commissions and any relocation expenses
incurred as a result, taxes paid or payable as a result (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be paid to holders of minority interests in
Restricted Subsidiaries as a result of the Asset Sale, amounts required to be
applied to the repayment of Indebtedness other than Indebtedness under the
Existing Credit Facility or Existing ARCO Chemical Debt secured by a Lien on
any asset sold in the Asset Sale and any reserves for adjustment in respect of
the sale price of the asset or assets established in accordance with GAAP and
any reserve for future liabilities established in accordance with GAAP;
provided that the reversal of any reserve that reduced Net Proceeds when issued
will be deemed a receipt of Net Proceeds in the amount of the proceeds on the
day.
"Non-Recourse Debt" means Indebtedness as to which the lenders have been
notified in writing that they will not have any recourse to the stock or
assets, in each case, other than the stock of a Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of the Joint Venture pledged by Lyondell or any of its Restricted Subsidiaries
to secure debt of the Joint Venture or Unrestricted Subsidiary, of Lyondell or
any of its Restricted Subsidiaries.
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"Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary to these businesses.
"Permitted Investments" means:
(1) any Investment in Lyondell or in a Restricted Subsidiary of Lyondell
that is engaged in a Permitted Business;
(2) any Investment in Cash Equivalents;
(3) any Investment by Lyondell or any Subsidiary of Lyondell in a Person,
if as a result of that Investment:
(a) the Person becomes a Restricted Subsidiary of Lyondell engaged in a
Permitted Business; or
(b) the Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all its assets to, or is
liquidated into, Lyondell or a Restricted Subsidiary of Lyondell
engaged in a Permitted Business;
(4) any non-cash consideration, other than a joint venture interest
received in full or partial satisfaction of the 80% requirement in
clause (2) of the first paragraph of the covenant described above under
the caption "--Repurchase at the Option of Holders--Asset Sales,"
received as consideration in an Asset Sale that was made under and in
compliance with the covenant described above under the caption "--
Repurchase at the Option of Holders--Asset Sales";
(5) any acquisition of assets or Equity Interests solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of
Lyondell;
(6) Hedging Obligations entered into in the ordinary course of business and
otherwise permitted under the applicable indenture;
(7) Investments in an Accounts Receivable Subsidiary that, as conclusively
determined by the board of directors, are necessary or advisable to
effect a Receivables Facility;
(8) Investments in Unrestricted Subsidiaries and Joint Ventures in an
aggregate amount, taken together with all other Investments made in
reliance on this clause (8), not to exceed at any time outstanding $25
million, after giving effect to any reductions in the amount of any
Investments as a result of the repayment or other disposition of the
Investments for cash, the amount of the reduction not to exceed the
amount of the Investments previously made under this clause (8); and
(9) any Investment received by Lyondell or any Restricted Subsidiary as
consideration for the settlement of any litigation, arbitration or
claim in bankruptcy or in partial or full satisfaction of accounts
receivable owned by a financially troubled Person to the extent
reasonably necessary to prevent or limit any loss by Lyondell or any of
its Restricted Subsidiaries in connection with the accounts receivable.
"Permitted Liens" means:
(1) Liens in favor of Lyondell or any Subsidiary Guarantor;
(2) Liens securing the Senior Secured Notes and the Subsidiary Guarantees;
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(3) Liens on property of a Person existing at the time the Person is merged
into or consolidated with Lyondell or any Restricted Subsidiary of
Lyondell or becomes a Subsidiary of Lyondell; provided that the Liens
were in existence before the contemplation of the merger, consolidation
or acquisition and do not extend to any assets of Lyondell or its
Restricted Subsidiaries other than those of the Person merged into or
consolidated with Lyondell or that becomes a Restricted Subsidiary of
Lyondell;
(4) Liens on property existing at the time of acquisition by Lyondell or
any Restricted Subsidiary of Lyondell; provided that the Liens were in
existence before the contemplation of the acquisition;
(5) Liens, including the interest of a lessor under a capital lease, on any
asset existing at the time of acquisition or incurred within 180 days
of the time of acquisition or completion of construction, whichever is
later, to secure or provide for the payment of all or any part of the
purchase price (or construction price) thereof;
(6) Liens incurred or assumed in connection with the issuance of revenue
bonds the interest on which is exempt from federal income taxation
under Section 103(b) of the Internal Revenue Code;
(7) Liens imposed by law, such as laborers' or other employees', carriers',
warehousemen's, mechanics', materialmen's and vendors' Liens and Liens
imposed by law on pipelines or pipeline facilities;
(8) Liens arising by reason of deposits necessary to qualify Lyondell or
any Restricted Subsidiary to conduct business, maintain self insurance
or comply with any law and Liens securing the PBGC Settlement;
(9) Liens to secure the performance of statutory obligations, tender, bid,
performance, government contract, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course of
business;
(10) Liens existing on May 17, 1999 other than Liens securing Indebtedness
under the Existing Credit Facility or the Existing ARCO Chemical Debt;
(11) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings, prejudgment Liens that are being contested in
good faith by appropriate proceedings and Liens arising out of
judgments or awards against Lyondell or any Restricted Subsidiary with
respect to which Lyondell or the Restricted Subsidiary at the time
will be prosecuting an appeal or proceedings for review and with
respect to which it will have secured a stay of execution pending the
appeal or proceedings for review; provided that in each case any
reserve or other appropriate provision as will be required in
conformity with GAAP will have been made therefor;
(12) easements, rights-of-ways, restrictions, irregularities of title and
other similar charges or encumbrances, not interfering in any material
respect with the ordinary conduct of the business of Lyondell or any
of its Restricted Subsidiaries;
(13) Liens securing reimbursement obligations with respect to commercial
letters of credit obtained in the ordinary course of business which
encumber documents and other property or assets relating to the
letters of credit and products and proceeds thereof;
(14) Liens securing assets under construction arising from progress or
partial payments by a customer of Lyondell or its Restricted
Subsidiaries relating to the property or assets;
(15) licenses or leases by Lyondell or any of its Restricted Subsidiaries
as licensor or lessor in the ordinary course of business and otherwise
permitted by the applicable indenture for patents, copyrights,
trademarks, tradenames and other intellectual property;
(16) leases or subleases by Lyondell or any of its Restricted Subsidiaries
as lessor or sublessor in the ordinary course of business and
otherwise permitted by the indenture;
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(17) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the
importation of goods;
(18) Liens resulting from the deposit of funds or evidences of Indebtedness
in trust for the purpose of (A) defeasing Indebtedness of Lyondell or
any of its Restricted Subsidiaries, which defeasance is otherwise
permitted under the applicable indenture, having an aggregate
principal amount at any one time outstanding not to exceed $25 million
or (B) defeasing Indebtedness ranking pari passu with the notes issued
under the applicable indenture; provided that the new notes issued
under the indenture are defeased concurrently with the Indebtedness;
(19) from and after the first date when the new notes issued under the
applicable indenture are rated Investment Grade, Liens on any asset of
Lyondell other than any of Lyondell's or any of its Restricted
Subsidiary's manufacturing plants or Liens on any Equity Interests of
any Restricted Subsidiary that owns a manufacturing plant;
(20) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture or of a Joint Venture Subsidiary that has no assets and
conducts no operations other than the holding, directly or indirectly,
of Equity Interests of the Joint Venture organized or designated as an
Unrestricted Subsidiary and holding no other assets and conducting no
other operations to construct, own and/or operate a propylene oxide
plant in the European Union to secure Non-Recourse Debt of the Joint
Venture or Unrestricted Subsidiary;
(21) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture or of a Joint Venture Subsidiary that has no assets and
conducts no operations other than the holding, directly or indirectly,
of Equity Interests of the Joint Venture organized or designated as an
Unrestricted Subsidiary and holding no other assets and conducting no
other operations to participate in the improvement of the Rhodia TDI
Plant to secure Non-Recourse Debt of the Joint Venture or Unrestricted
Subsidiary or Rhodia or a wholly owned subsidiary of Rhodia;
(22) Liens on equipment of Lyondell or any Restricted Subsidiary arising as
a result of a sale and leaseback with respect to equipment; provided
that the proceeds from the sale and leaseback are applied under the
covenant described above under the caption "--Repurchase at the Option
of Holders--Asset Sales";
(23) Asset Sale Liens;
(24) customary Liens for the fees, costs and expenses of trustees and
escrow agents under any indenture, escrow agreement or similar
agreement establishing a trust or escrow arrangement, and Liens under
merger agreements, stock purchase agreements, asset sale agreements,
option agreements and similar agreements in respect of the disposition
of property or assets of Lyondell or any Restricted Subsidiary, to the
extent the dispositions are permitted under the applicable indenture;
(25) netting provisions and setoff rights in favor of counterparties to
agreements creating Hedging Obligations;
(26) other Liens on assets of Lyondell or any Restricted Subsidiary of
Lyondell securing Indebtedness that is permitted by the terms of the
applicable indenture to be outstanding having an aggregate principal
amount at any one time outstanding not to exceed $100 million; and
(27) Liens to secure a Permitted Refinancing incurred to refinance
Indebtedness that was secured by a Lien permitted under the applicable
indenture and that was incurred in accordance with the provisions of
the applicable indenture; provided that the Liens do not extend to or
cover any property or assets of Lyondell or any Restricted Subsidiary
other than assets or property securing the Indebtedness so refinanced.
"Permitted Refinancing" means any Indebtedness of Lyondell or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend,
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refinance, renew, replace, defease or refund, other Indebtedness of Lyondell or
any of its Restricted Subsidiaries; provided that:
(1) the principal amount, or liquidation preference in the case of
Preferred Stock, of the Permitted Refinancing, or if the Permitted
Refinancing is issued at a discount, the initial issuance price of the
Permitted Refinancing, does not exceed the principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of any premiums paid and reasonable expenses
incurred in connection therewith);
(2) the Permitted Refinancing or, in the case of Preferred Stock of a
Finance Subsidiary, the Indebtedness issued to the Finance Subsidiary,
has a Stated Maturity date later than the Stated Maturity date of, and
has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated by its terms in right of payment
to the new notes or the Subsidiary Guarantees, the Permitted
Refinancing, or, in the case of Preferred Stock, the Indebtedness
issued to the Finance Subsidiary, has a Stated Maturity date later than
the Stated Maturity date of, and is subordinated in right of payment
to, the new notes on subordination terms at least as favorable to the
holders of new notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(4) the Indebtedness is incurred by Lyondell or a Subsidiary Guarantor or
the Preferred Stock is issued by a Finance Subsidiary, if Lyondell or a
Subsidiary Guarantor is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(5) the Indebtedness is incurred by Lyondell or a Restricted Subsidiary or
the Preferred Stock is issued by a Finance Subsidiary, if a Restricted
Subsidiary that is not a Subsidiary Guarantor is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Qualified Equity Interests" will mean all Equity Interests of a Person
other than Disqualified Stock of the Person.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of that Person
which is not an Unrestricted Subsidiary.
"Significant Asset Sale" means an Asset Sale of (x) any of Lyondell's or its
Restricted Subsidiaries' plants that (a) has a fair market value in excess of
$50 million or (b) for Net Proceeds in excess of $50 million (a "Significant
Asset") or (y) a controlling interest in any Restricted Subsidiary that owns a
Significant Asset, other than, in each case, an involuntary disposition, to the
extent that the Existing Credit Facility, but not any refinancing thereof other
than a credit facility with commercial banks and other lenders, permits the
proceeds to be reinvested before any mandatory prepayment of amounts
outstanding under the Existing Credit Facility.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated under the Act, as the Regulation is in effect on May 17, 1999.
"Specified Joint Ventures" means (i) Equistar Chemicals, LP, (ii) LYONDELL-
CITGO Refining LP and (iii) Lyondell Methanol Company, L.P.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing the Indebtedness or any later date established by any amendment to
the original documentation and will not include any contingent obligations to
repay, redeem or repurchase the interest or principal before the date
originally scheduled for the payment.
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"Subject Assets" means, with respect to any Major Asset Sale, the assets
which are the subject of that Major Asset Sale.
"Subject Assets Transferee" means any Restricted Subsidiary or Joint Venture
which becomes the owner of Subject Assets in connection with a Major Asset
Sale.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
to vote, without regard to the occurrence of any contingency, in the
election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership:
(a) the sole general partner or the managing general partner of which
is the Person or a Subsidiary of the Person; or
(b) the only general partners of which are the Person or of one or more
Subsidiaries of the Person or any combination thereof; or
(c) that is a Specified Joint Venture and as to which:
(i) a general partner of which is such Person or a subsidiary of
such Person;
(ii) the Person owns, directly or indirectly, 50% or more of the
partnership interests of the Specified Joint Venture; and
(iii) the board of directors of the Person has designated the
Specified Joint Venture to be a "subsidiary," which
designation will be irrevocable for so long as the Specified
Joint Venture satisfies the foregoing requirements;
As of May 17, 1999, none of the Specified Joint Ventures are Subsidiaries of
Lyondell.
"Subsidiary Guarantor" means (i) Lyondell Worldwide and Lyondell Nederland
and (ii) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the indentures, in each case, until the
Subsidiary Guarantee of such Person is released in accordance with the
provisions of the indentures.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of Lyondell that is designated by the board of directors
of Lyondell as an Unrestricted Subsidiary under a board resolution;
(2) any Subsidiary of an Unrestricted Subsidiary; and
(3) any Accounts Receivable Subsidiary.
The board of directors may designate any Subsidiary of Lyondell, including any
newly acquired or newly formed Subsidiary, to be an Unrestricted Subsidiary
unless the Subsidiary or any of its Subsidiaries owns any Equity Interest or
Indebtedness of, or holds any Lien on any property of, Lyondell or any other
Subsidiary of Lyondell that is not a Subsidiary of the Subsidiary to be so
designated; provided that:
(a) any Guarantee, other than as a co-obligor of the Equistar Assumed Debt
so long as the Equistar Assumed Debt is not considered Indebtedness of
Lyondell under the definition in the applicable indenture, by Lyondell
or any Restricted Subsidiary of any Indebtedness of the Subsidiary
being so designated will be deemed an "Incurrence" of the Indebtedness
and an "Investment" by Lyondell or the Restricted Subsidiary or both,
if applicable, at the time of the designation;
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(b) either (i) the Subsidiary to be so designated has total assets of
$1,000 or less or (ii) if the Subsidiary has assets greater than
$1,000, the designation would be permitted under the covenant described
above under the caption "--Restrictive Covenants--Restricted Payments";
(c) if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under the
covenants described above under the captions "--Restricted Payments"
and "--Incurrence of Indebtedness and Issuance of Preferred Stock"; and
(d) in the case of any Subsidiary that is a Joint Venture as of the date of
its designation as an Unrestricted Subsidiary, the Subsidiary has an
aggregate of 15% or more of its outstanding Capital Stock or other
voting interests other than directors' qualifying shares held by
another Person other than Lyondell or any Restricted Subsidiary or any
Affiliate of Lyondell.
Any designation by the board of directors of Lyondell under clause (1) above
will be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to the designation and an Officers'
Certificate certifying that the designation complied with the foregoing
conditions and was permitted by the covenants described above under the
captions "--Restrictive Covenants--Restricted Payments" and "--Incurrence of
Indebtedness and Issuance of Preferred Stock."
If:
(1) at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements of clause (d) because Lyondell has acquired more
than 85% of the outstanding Capital Stock or other voting interests of
any Subsidiary that was a Joint Venture on the date of its designation
as an Unrestricted Subsidiary; or
(2) at any time Lyondell or any Restricted Subsidiary Guarantees any
Indebtedness of the Unrestricted Subsidiary or makes any other
Investment in the Unrestricted Subsidiary and the incurrence of
Indebtedness or Investment would not be permitted under the covenants
described above under the caption "--Restrictive Covenants--Incurrence
of Indebtedness and Issuance of Preferred Stock" or "--Restrictive
Covenants--Restricted Payments";
it will thereafter cease to be an Unrestricted Subsidiary for purposes of the
applicable indenture and any Indebtedness of the Subsidiary will be deemed to
be incurred by a Restricted Subsidiary of Lyondell as of the date and, if the
Indebtedness is not permitted to be incurred as of the date under the covenant
described above under the caption "--Restrictive Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock," Lyondell will be in default of
the covenant. The board of directors of Lyondell may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that the
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Lyondell of any outstanding Indebtedness of the Unrestricted
Subsidiary and the designation will only be permitted if:
(1) the Indebtedness is permitted under the covenant described above under
the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock"; and
(2) no Default or Event of Default would be in existence following the
designation.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof; by
(b) the number of years calculated to the nearest one-twelfth that will
elapse between the date and the making of the payment;
by:
(2) the then outstanding principal amount of the Indebtedness.
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United States Federal Income Tax Considerations
The following summary describes the material United States federal income
tax consequences expected to apply to the exchange of the outstanding notes for
new notes. This summary is based upon the provisions of the Internal Revenue
Code of 1986, as amended, the final, temporary and proposed regulations
promulgated under the Internal Revenue Code, and administrative rulings and
judicial decisions now in effect. All of the above are subject to change or to
different interpretations, possibly with retroactive effect. This discussion is
for general information only and does not purport to address all of the
possible federal income tax consequences or any other federal, state, local or
foreign tax consequences of the acquisition, ownership and disposition of the
new notes. It is limited to investors who hold the new notes as capital assets.
This summary does not address the federal income tax consequences that may be
relevant to particular investors in light of their unique circumstances or to
some types of investors, such as dealers in securities, insurance companies,
financial institutions, foreign corporations, partnerships or trusts,
nonresident alien individuals and tax-exempt entities, who may be subject to
special treatment under federal income tax law.
An exchange of the outstanding notes for new notes under the exchange offers
will not constitute a taxable event for federal income tax purposes. As a
result, holders who exchange their outstanding notes for new notes will not
recognize as income any accrued and unpaid interest on the new notes by reason
of the exchange. An exchanging holder will have the same adjusted basis and
holding period in the new notes as it had in the outstanding notes immediately
before the exchange.
Holders should consult their own tax advisor as to the particular tax
consequences to them of exchanging their outstanding notes for new notes in the
exchange offers, including the applicability and effect of any state, local or
foreign tax laws and or recent or possible future changes in the tax laws.
Registration Rights Agreement
The description of the registration rights agreement set forth below is a
summary of the material provisions of the registration rights agreement. The
registration rights agreement is filed as an exhibit to the registration
statement of which this prospectus is a part.
Exchange Offer Registration Statement
In connection with the issuance of the outstanding notes, we entered into a
registration rights agreement with the initial purchasers of the outstanding
notes. Under the registration rights agreement, we agreed to:
. file a registration statement with the SEC on or before 90 days after
issuance of the outstanding notes;
. use our best efforts to cause the registration statement to be declared
effective at the earliest possible date but no later than 210 days after
the date of issuance of the outstanding notes;
. use our best efforts to consummate the exchange offers no later than 30
business days after the registration statement is declared effective;
. keep the exchange offers open for acceptance of tenders for a period of
not less than 20 business days after the date notice of the exchange
offers is mailed to holders of the outstanding notes; and
. accept for exchange all outstanding notes duly tendered and not validly
withdrawn under the exchange offers according to the terms of the
registration statement and letter of transmittal.
To participate in an exchange offer, each holder must represent that it:
. is not one of our affiliates;
. is not a broker-dealer tendering outstanding notes acquired directly from
us for its own account;
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. has no arrangement or understanding with any person to participate in a
distribution of the new notes; and
. is acquiring the new notes in the ordinary course of business.
If the holder is a broker-dealer that will receive new notes for its own
account in exchange for outstanding notes that were acquired by it as a result
of market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with the resale of
any new notes so acquired.
As soon as practicable after the exchange offer registration statement
becomes effective, but not more than 30 business days later, we will offer the
holders of outstanding notes who are not prohibited by any law or policy of the
SEC from participating in these exchange offers the opportunity to exchange
their outstanding notes for new notes registered under the Securities Act that
are substantially identical to the outstanding notes, except that the new notes
will not contain terms with respect to transfer restrictions, registration
rights and liquidated damages.
The registration rights agreement also provides that we will:
. make available for a period of 180 days after the consummation of the
exchange offers a prospectus meeting the requirements of the Securities
Act to any broker-dealer for use in connection with any resale of the new
notes; and
. pay all expenses incident to the exchange offers, including the expense
of one counsel to the holders of the new notes, and indemnify some
holders of the new notes, including any broker-dealer, against specified
liabilities, including liabilities under the Securities Act.
Shelf Registration Statement
We will use our reasonable best efforts to file with the SEC a shelf
registration statement to cover resales of the outstanding notes by those
holders who provide required information in connection with the shelf
registration statement under the following circumstances:
. if the exchange offers as contemplated by the registration rights
agreement are not permitted by applicable law; or
. any holder of outstanding notes notifies us before the 20th business day
following the consummation of the applicable exchange offer that it:
(1) is prohibited by law or SEC policy from participating in the
exchange offers;
(2) may not resell the new notes to the public without delivering a
prospectus, and the prospectus contained in the exchange offer
registration statement is not appropriate or available for resales
by the holder; or
(3) is a broker-dealer and holds outstanding notes acquired directly
from Lyondell or any of Lyondell's affiliates.
A holder who sells outstanding notes under the shelf registration statement
generally will be:
. required to be named as a selling security holder in the related
prospectus and to deliver a prospectus to purchasers;
. subject to some of the civil liability provisions under the Securities
Act in connection with resales of the outstanding notes; and
. bound by the applicable provisions of the registration rights agreement,
including some of the indemnification obligations.
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If filed, we will use our reasonable best efforts to keep the shelf
registration statement effective for a period of two years after May 17, 1999.
Liquidated Damages
If a registration default under the registration rights agreement occurs, we
will be obligated to pay liquidated damages to each holder of outstanding notes
at an amount equal to $0.05 per week per $1000 in principal amount of
outstanding notes affected. If a registration default is not cured within 90
days, the amount of liquidated damages will increase by an additional $0.05 per
week per $1000 in principal amount of outstanding notes affected with respect
to each subsequent 90-day period during which a registration default continues,
up to a maximum amount of liquidated damages of $0.50 per week per $1000 of
principal amount of outstanding notes.
A registration default occurs if:
. a registration statement is not timely filed with the SEC;
. a registration statement is not declared effective on or before the
applicable deadline;
. one or more of the exchange offers are not consummated within 30 business
days after the exchange offer registration statement is declared
effective; or
. a registration statement is filed and declared effective but ceases to be
effective or usable.
Following the cure of all registration defaults, the accrual of liquidated
damages will cease. We are not required to pay liquidated damages for more than
one registration default at a given time. We are not required to pay liquidated
damages to a holder who has not furnished to Lyondell the information specified
in the registration rights agreement.
We will pay all accrued but unpaid liquidated damages to the entitled
holders in the manner provided for payment of interest under the applicable
indenture.
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Book-entry; Delivery and Form
Description of DTC
The description of the operations and procedures of DTC, Euroclear and Cedel
set forth below is provided solely as a matter of convenience. These operations
and procedures are solely within the control of the respective settlement
systems and are subject to change by them from time to time. We do not take any
responsibility for these operations or procedures, and investors are urged to
contact the relevant system or its participants directly to discuss these
matters.
DTC has advised us that it is a:
. limited purpose trust organized under the laws of the State of New York;
. ""banking organization" within the meaning of the New York Banking Law;
. member of the Federal Reserve System;
. ""clearing corporation" within the meaning of the Uniform Commercial
Code; and
. ""clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934.
DTC was created to hold securities for its participants and facilitates the
clearance and settlement of securities transactions between participants
through electronic book-entry changes to the accounts of its participants,
thereby eliminating the need for physical transfer and delivery of
certificates.
DTC's participants include securities brokers and dealers, banks and trust
companies, clearing corporations and other organizations. Indirect access to
DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Investors who
are not participants may beneficially own securities held by or on behalf of
DTC only through participants or indirect participants.
The new notes will initially be represented by one or more permanent global
notes in definitive, fully registered book-entry form that will be registered
in the name of Cede & Co., as nominee of DTC. The global notes will be
deposited with a custodian for DTC for credit to the respective accounts of the
acquirors of the new notes or to the other accounts as the acquirors may direct
at DTC. See "The Exchange Offers--Book-entry Transfer."
The Global Notes
We expect that under procedures established by DTC:
. upon deposit of the global notes with DTC or its custodian, DTC will
credit on its internal system the portion of the global notes
corresponding to the respective amounts of the global notes registered to
the respective accounts of persons who have accounts with the depository;
. ownership of the new notes will be shown on records maintained by DTC or
its nominee; and
. transfers of ownership of the new notes will be effected only through
records maintained by DTC or its nominee.
So long as DTC or its nominee is the registered owner of the global notes,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the new notes represented by the global notes for all purposes under
the applicable indenture. Except as provided below, owners of beneficial
interests in global notes will not:
. be entitled to have new notes represented by global notes registered in
their names;
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. receive or be entitled to receive physical delivery of certificated new
notes; and
. be considered the owners or holders of the global notes under the
applicable indenture for any purpose, including with respect to the
giving of any direction, instruction or approval to the trustee.
Payments of the new notes represented by global notes will be made to DTC,
or its nominee, as the registered owner. None of Lyondell, Lyondell Worldwide,
Lyondell Nederland, the trustee or the paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest in the global notes
or for maintaining, supervising or reviewing any records relating to beneficial
ownership interest under the applicable indenture.
We expect that DTC or its nominees, upon receipt of any payment on the new
notes represented by the global notes, will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interest in
the global notes as shown in the records of DTC or its nominee. We also expect
that participants will be governed by standing instructions and customary
practice as is now the case with securities held for the accounts of customers
registered in the names of nominees for the customers. Payment will be the
responsibility of the participants.
Transfers between participants in DTC will be effected according to DTC's
procedures and will be settled in same-day funds. Transfers between
participants in Euroclear or Cedel will be effected in the ordinary way
according to their respective rules and operating procedures. If a holder
requires physical delivery of a certificated security for any reason, including
to sell new notes to persons in states that require physical delivery of the
security or to pledge the security, a holder must transfer its interest in the
global notes according to the normal procedures of DTC, Euroclear or Cedel and
the procedures in the applicable indenture.
Subject to compliance with the transfer restrictions applicable to the new
notes, cross-market transfers between the participants in DTC, on the one hand,
and Euroclear or Cedel participants, on the other hand, will be effected
through DTC according to DTC's rules on behalf of Euroclear or Cedel, as the
case may be, by its respective depositary. Cross-market transactions will
require delivery of instructions to Euroclear or Cedel, as the case may be, by
the counter party in that system according to the rules and procedures and
within the established deadlines, in Brussels time, of the system if the
transaction meets its settlement requirements. Euroclear or Cedel, as the case
may be, will deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests
in the relevant Global Notes in DTC and making or receiving payment according
to normal procedures for same-day funds settlement applicable to DTC. Euroclear
participants and Cedel participants may not deliver instructions directly to
the depositaries for Euroclear or Cedel.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a global note from a participant in
DTC will be credited and reported to the relevant participant during the note
settlement processing day immediately following the settlement date of DTC. The
note settlement day must be a business day for Euroclear and Cedel. Cash
received in Euroclear or Cedel as a result of sales of interests in a global
note by or through a Euroclear or Cedel participant to a participant in DTC
will be received with value on the settlement date of DTC but will be available
in the relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following DTC's settlement date.
Although DTC, Euroclear and Cedel have agreed to the foregoing procedures to
facilitate transfers of interests in the global notes among participants in
DTC, Euroclear and Cedel, they are under no obligation to perform or to
continue to perform procedures, and procedures may be discontinued at any time.
Neither we nor the trustee will have any responsibility for the performance by
DTC, Euroclear or Cedel or their respective participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
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Certificated Notes
Interests in the global notes may be exchanged for certificated securities
if:
. we notify the trustee in writing that DTC is no longer willing or able to
act as a depositary or DTC ceases to be registered as a clearing agency
under the Exchange Act and a successor depositary is not appointed within
90 days of notice or cessation;
. we, at our option, notify the trustee in writing that we elect to cause
the issuance of the new notes in certificated form under the applicable
indenture; or
. other events occur as provided in the applicable indenture.
Upon the occurrence of any of the events described in the preceding sentence,
we will cause the appropriate certificated securities to be delivered.
Neither Lyondell, Lyondell Worldwide, Lyondell Nederland, nor the trustee
will be liable for any delay by DTC or any participant or indirect participant
in identifying the beneficial owners of the related notes. Each person is
protected in conclusively relying on instructions from DTC for all purposes,
including with respect to the registration and delivery of the new notes, and
the respective principal amounts of the new notes.
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Plan of Distribution
Based on interpretations by the staff of the SEC in "no action letters"
issued to third parties, we believe that you may transfer new notes issued
under an exchange offer in exchange for the outstanding notes if:
. you acquire the new notes in the ordinary course of your business; and
. you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of the new notes.
Broker-dealers receiving new notes in the exchange offers will be subject to a
prospectus delivery requirement with respect to resales of the new notes. Each
letter of transmittal states that by acknowledging and delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of the new notes received in exchange for outstanding notes where
the outstanding notes were acquired by the broker-dealer as a result of market-
making activities or other trading activities.
We believe that you may not transfer the new notes issued under an exchange
offer in exchange for the outstanding notes if you are either:
. our "affiliate" within the meaning of Rule 405 under the Securities Act;
. a broker-dealer that acquired the outstanding notes directly from us; or
. a broker-dealer that acquired the outstanding notes as a result of
market-making or other trading activities without compliance with the
registration and prospectus delivery provisions of the Securities Act.
The staff of the SEC has taken the position that participating broker-
dealers may fulfill their prospectus delivery requirements with respect to
transactions involving an exchange of securities such as these exchange offers,
other than a resale of an unsold allotment from the original sale of the
outstanding notes, by delivering the prospectus contained in the exchange offer
registration statement. Broker-dealers who acquired the outstanding notes from
Lyondell may not rely on SEC staff interpretations. They must comply with the
registration and prospectus delivery requirements of the Securities Act,
including being named as selling noteholders, in order to resell the
outstanding notes or the new notes. In the registration rights agreement, we
agreed to permit participating broker-dealers to use this prospectus in
connection with the resale of the new notes. We have agreed that we will make
this prospectus, and any amendment or supplement to this prospectus, available
for a period up to 180 days after the expiration of each exchange offer to any
broker-dealer that requests these documents in the applicable letter of
transmittal. In addition, until , 1999, all dealers effecting transactions
in the new notes may be required to deliver this prospectus.
If you wish to exchange your outstanding notes for new notes in an exchange
offer, you will be required to make representations to us as described in "The
Exchange Offers--Purpose and Effect of the Exchange Offer" and "--Procedures
for Tendering--Your Representations to Us" of this prospectus and in the
applicable letter of transmittal. In addition, if you are a broker-dealer who
receives the new notes for your own account in exchange for outstanding notes
that were acquired by you as a result of market-making activities or other
trading activities, you will be required to acknowledge that you will deliver a
prospectus in connection with any resale by you of the new notes.
We will not receive any proceeds from any sale of the new notes by broker-
dealers. Broker-dealers who receive the new notes for their own account in the
exchange offers may sell them from time to time in one or more transactions
either:
. in the over-the-counter market;
. in negotiated transactions;
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. through the writing of options on the new notes or a combination of
methods of resale;
. at market prices prevailing at the time of resale; or
. at prices related to prevailing market prices or negotiated prices.
Any resale of the new notes may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any broker-dealer or the purchasers of any new
notes. Any broker-dealer that resells the new notes it received for its own
account in an exchange offer and any broker or dealer that participates in a
distribution of the new notes may be deemed to be an "underwriter" within the
meaning of the Securities Act. Any profit on any resale of the new notes and
any commissions or concessions received by any persons may be deemed to be
underwriting compensation under the Securities Act. Each broker-dealer that
receives the new notes for its own account using a registered exchange offer
must acknowledge that it will deliver a prospectus in connection with any
resale of the new notes. Each letter of transmittal states that by
acknowledging and delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
We have agreed to pay all expenses incidental to each exchange offer other
than commissions and concessions of any brokers or dealers. We will indemnify
holders of the outstanding notes, including any broker-dealers, against some
liabilities, including liabilities under the Securities Act, as provided in the
registration rights agreement.
Legal Matters
Baker & Botts, L.L.P., Houston, Texas, counsel for Lyondell, Lyondell
Worldwide and Lyondell Nederland, has issued an opinion about the legality of
the new notes.
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 the Lyondell
Chemical Company 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 the Lyondell Chemical Company 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 ended December 31, 1998 incorporated in this registration
statement by reference from Lyondell's Annual Report on Form 10-K 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 has 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 the Lyondell Chemical Company
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.
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Where You Can Find More Information
Lyondell files annual, quarterly and special reports, proxy statements and
other information with the U.S. Securities and Exchange Commission. Lyondell's
SEC filings are available to the public over the Internet at the SEC's web site
at http://www.sec.gov. You may also read and copy any document Lyondell files
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. In addition, because Lyondell's
common stock is listed on the New York Stock Exchange, reports and other
information concerning Lyondell can also be inspected at the office of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
Incorporation of Documents by Reference
Lyondell has "incorporated by reference" information in this prospectus.
This means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is an important
part of this prospectus. Information that we file later with the SEC will
automatically update and supersede the information in this prospectus. Lyondell
incorporates by reference the documents listed below and any future filings
made with the SEC (file no. 1-10145) under Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, until each exchange offer expires or is
terminated.
1. Annual Report on Form 10-K . . . Year Ended December 31, 1998
2. Current Reports on Form 8-K . . . Filed on April 19, 1999, April 21,
1999, May 12, 1999 and June 29, 1999
3. Quarterly Report on Form 10-Q . . . Filed on May 12, 1999
You may request a copy of these filings at no cost by writing or telephoning
us the following address:
Corporate Secretary
Lyondell Chemical Company
1221 McKinney, Suite 700
Houston, Texas 77010
Telephone: (713) 652-7200
Whether or not required by the rules and regulations of the SEC, so long as
any new notes are outstanding, we have agreed to furnish to the trustees,
within 15 days after we are or would have been required to file with the SEC,
and to furnish to the holders of the new notes thereafter:
. all quarterly and annual financial information that would be required to
be contained in a filing with the SEC on Forms 10-Q and 10-K if we were
required to file these forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by our certified
independent accountants; and
. all current reports that would be required to be filed with the SEC on
Form 8-K if we were required to file these reports.
In addition, whether or not required by the rules and regulations of the
SEC, we will file a copy of all this information and reports with the SEC for
public availability and make the information available to securities analysts
and prospective investors upon request.
In addition, we have agreed that, for so long as any new notes remain
outstanding, we will furnish to the holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered under Rule 144A(d)(4) under the Securities Act. Any request and
requests for the agreements summarized in this prospectus should be directed to
the address referred to above.
129
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS dated , 1999
Lyondell Chemical Company
$2,400,000,000
Offers to Exchange
ALL OUTSTANDING
9 5/8% Senior Secured Notes, Series A, due 2007
9 7/8% Senior Secured Notes, Series B, due 2007
10 7/8% Senior Subordinated Notes due 2009
for
ALL REGISTERED
9 5/8% Senior Secured Notes, Series A, due 2007
9 7/8% Senior Secured Notes, Series B, due 2007
10 7/8% Senior Subordinated Notes due 2009
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not offering to exchange notes in any
jurisdiction where the offer is not permitted. We do not claim the accuracy of
the information in this prospectus as of any date other than the date stated on
the cover.
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. Indemnification of Directors and Officers
By-Law Provisions
Lyondell
Lyondell's By-Laws provide that Lyondell 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. Lyondell will indemnify
the officers and directors of Lyondell 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
will not in any way diminish any rights to indemnification of such person
or the obligations of Lyondell 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 will not be exclusive of any
other right which any person may have or hereafter acquire under any
statute, Lyondell'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
will continue after the person ceases to serve Lyondell as a director or
officer or to serve another entity at the request of Lyondell.
(c) Insurance. Lyondell may maintain insurance, at its expense, to
protect itself and any director or officer of Lyondell or another
corporation, partnership, joint venture, trust or other enterprise against
any expense, liability or loss, whether or not Lyondell would have the
power to indemnify such person against such expense, liability or loss
under the General Corporation Law of Delaware.
(d) Indemnity Agreements. Lyondell 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 of
directors may designate, the form of such indemnity agreements to be
approved by a majority of the Board then in office.
(e) Indemnification of Employees and Agents of Lyondell. Lyondell may,
under procedures authorized from time to time by the board of directors,
grant rights to indemnification, and to payment by Lyondell of the expenses
incurred in defending any proceeding in advance of its final disposition to
any employee or agent of Lyondell to the fullest extent of the provisions
of this Article V.
Delaware General Corporation Law Provisions
Section 145 of the General Corporation Law of the State of Delaware
provides:
(a) A corporation will 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
II-1
<PAGE>
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, will 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 will 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 will be
made in respect of any claim, issue or matter as to which such person will
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 will 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 will 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 will 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) will 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 will 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 will 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.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section will 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 will 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
II-2
<PAGE>
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" will
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, will 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" will
include employee benefit plans; references to "fines" will 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" will 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 will 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 will, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and will 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
Lyondell
Lyondell's Certificate of Incorporation limits the personal liability of
directors to Lyondell and its stockholders for monetary damages resulting from
some 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 Lyondell will not
be liable to Lyondell 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 Lyondell
will 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 Lyondell will not adversely affect any right
or protection of a director of Lyondell existing at the time of such repeal or
modification or with respect to events occurring prior to such time.
Notwithstanding anything contained in Lyondell's Certificate of Incorporation
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 Lyondell
will be required to amend or repeal this Article VII or to adopt any provision
inconsistent herewith.
II-3
<PAGE>
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 will not eliminate
or limit the liability of a director:
.for any breach of the director's duty of loyalty to the corporation or
its stockholders;
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
.under section 174 of this title; or
.for any transaction from which the director derived an improper
personal benefit.
No such provision will 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 will 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.
Lyondell Worldwide
Lyondell Worldwide's Certificate of Incorporation limits the personal
liability of directors for monetary damages resulting from some breaches of
directors' fiduciary duties. Article IX 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 will 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 after approval by the stockholders
of this provision to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Company will 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 IX by the stockholders of the
Company will not adversely affect any right or protection of a director of
the 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 will be required to amend or repeal
this Article IX or to adopt any provision inconsistent herewith.
ITEM 21. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Lyondell
Chemical Worldwide, Inc.
3.2 Amended and Restated By-Laws of Lyondell Chemical Worldwide, Inc.
3.3 Amended and Restated Certificate of Incorporation of Lyondell
Chemical Nederland, Ltd.
3.4 Amended and Restated By-Laws of Lyondell Chemical Nederland, Ltd.
4.1 Registration Rights Agreement by and among Lyondell Chemical
Company, Lyondell Chemical Worldwide, Inc., Lyondell Chemical
Nederland, Ltd. and Donaldson, Lufkin & Jenrette Securities
Corporation, J.P. Morgan Securities Inc., Salomon Smith Barney,
Inc., Chase Securities Inc. and NationsBanc Montgomery Securities
LLC, dated as of May 17, 1999
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
4.2 Indenture among Lyondell Chemical Company, the Subsidiary Guarantors
party thereto and The Bank of New York, as Trustee, dated as of May
17, 1999, for 9 5/8% Senior Secured Notes, Series A, due 2007
4.3 Indenture among Lyondell Chemical Company, the Subsidiary Guarantors
party thereto and The Bank of New York, as Trustee, dated as of May
17, 1999, for 9 7/8% Senior Secured Notes, Series B, due 2007
4.4 Indenture among Lyondell Chemical Company, the Subsidiary Guarantors
party thereto and The Bank of New York, as Trustee, dated as of May
17, 1999, for 10 7/8% Senior Subordinated Notes
due 2009
5 Opinion of Baker & Botts, L.L.P.
*12 Statement Setting Forth Detail for Computation of Ratio of Earnings
to Fixed Charges (Filed as an exhibit to Lyondell's Annual Report on
Form 10-K for the year ended December 31, 1998 and incorporated
herein by reference)
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Baker & Botts, L.L.P. (included in Exhibit 5)
**24.1 Powers of Attorney for Lyondell Chemical Company
**24.2 Powers of Attorney for Lyondell Chemical Worldwide, Inc.
**24.3 Powers of Attorney for Lyondell Chemical Nederland, Ltd.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Series A
Senior Secured Notes
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Series B
Senior Secured Notes
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Senior
Subordinated Notes
99.1 Form of Letter to DTC Participants for 9 5/8% Senior Secured Notes,
Series A, due 2007
99.2 Form of Letter to DTC Participants for 9 7/8% Senior Secured Notes,
Series B, due 2007
99.3 Form of Letter to DTC Participants for 10 7/8% Senior Subordinated
Notes due 2009
99.4 Form of Letter to Clients for 9 5/8% Senior Secured Notes, Series A,
due 2007
99.5 Form of Letter to Clients for 9 7/8% Senior Secured Notes, Series B,
due 2007
99.6 Form of Letter to Clients for 10 7/8% Senior Subordinated Notes due
2009
99.7 Form of Notice of Guaranteed Delivery for 9 5/8% Senior Secured
Notes, Series A, due 2007
99.8 Form of Notice of Guaranteed Delivery for 9 7/8% Senior Secured
Notes, Series A, due 2007
99.9 Form of Notice of Guaranteed Delivery for 10 7/8% Senior Secured
Notes, Series A, due 2009
99.10 Form of Letter of Transmittal for 9 5/8% Senior Secured Notes, Series
A, due 2007
99.11 Form of Letter of Transmittal for 9 7/8% Senior Secured Notes, Series
B, due 2007
99.12 Form of Letter of Transmittal for 10 7/8% Senior Subordinated Notes
due 2009
</TABLE>
- --------
* Incorporated by reference from the filing indicated.
** To be filed by amendment.
II-5
<PAGE>
ITEM 22. Undertakings
1. The undersigned co-registrants hereby undertake:
. to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to
--include any prospectus required by section 10(a)(3) of the
Securities Act of 1933
--include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to information in the registration statement
--reflect in the prospectus any facts or events arising after the
effective date of the registration statement or its most recent
post-effective amendment which, individually or in the aggregate,
represent a fundamental change in the information shown in the
registration statement.
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 SEC under 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
stated in the "Calculation of Registration Fee" table in the
effective registration statement
. that, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment will be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of securities at that time will be deemed
to be the initial bona fide offering
. 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
2. The undersigned co-registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrants' annual report under 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 will be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time will be deemed to be the
initial bona fide offering.
3. 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 SEC 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.
II-6
<PAGE>
4. The undersigned co-registrants hereby undertake
. to respond to requests for information that is incorporated by
reference into the prospectus under items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of a request, and to send
the incorporated documents by first-class mail or other equally
prompt means. This undertaking includes information contained in
documents filed after the effective date of the registration
statement through the date of responding to the request
5. The undersigned co-registrants hereby undertake to supply by means of a
post effective amendment all information concerning a transaction, and
the company being acquired therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell
Chemical Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-4 and has duly caused this
Registration Statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, the State of
Texas, on June 29, 1999.
LYONDELL CHEMICAL COMPANY
By: /s/ Dan F. Smith
----------------------------------
Dan F. Smith
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities indicated on June 29, 1999.
Signature Title
*/s/ William T. Butler Chairman of the Board
- ------------------------------------- President, Chief Executive Officer
William T. Butler and Director
Director
Director
/s/ Dan F. Smith Director
- ------------------------------------- Director
Dan F. Smith Director
(Principal Executive Officer)Director
*/s/ Carol Anderson Senior Vice President, Special
- ------------------------------------- Assignments and Acting Chief
Carol Anderson Financial Officer
Controller and Principal Accounting
Officer
*/s/ Travis Engen
- -------------------------------------
Travis Engen
*/s/ Stephen F. Hinchliffe, Jr.
- -------------------------------------
Stephen F. Hinchliffe, Jr.
*/s/ Dudley C. Mecum II
- -------------------------------------
Dudley C. Mecum II
*/s/ Frank Savage
- -------------------------------------
Frank Savage
*/s/ Paul R. Staley
- -------------------------------------
Paul R. Staley
/s/ Joseph M. Putz
- -------------------------------------
Joseph M. Putz
(Principal Financial Officer)
/s/ Kelvin R. Collard
- -------------------------------------
Kelvin R. Collard
(Principal Accounting Officer)
/s/ Jeffrey R. Pendergraft
*By: ________________________________
Jeffery R. Pendergraft, as Attorney-
in-fact
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell
Chemical Worldwide, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-4 and has duly
caused this Registration Statement or amendment thereto to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
the State of Texas, on June 29, 1999.
LYONDELL CHEMICAL WORLDWIDE, INC.
By: /s/ Dan F. Smith
----------------------------------
Dan F. Smith
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities indicated on June 29, 1999.
Signature Title
/s/ Dan F. Smith
- ------------------------------------- President
Dan F. Smith
(Principal Executive Officer)
/s/ Robert J. Millstone Director
- -------------------------------------
Robert J. Millstone
/s/ Edward W. Rich Director and Treasurer
- -------------------------------------
Edward W. Rich
/s/ Joseph M. Putz Chief Financial Officer
- -------------------------------------
Joseph M. Putz
(Principal Financial Officer)
/s/ Kelvin R. Collard Controller
- -------------------------------------
Kelvin R. Collard
(Principal Accounting Officer)
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lyondell
Chemical Nederland, Ltd. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-4 and has duly
caused this Registration Statement or amendment thereto to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
the State of Texas, on June 29, 1999.
LYONDELL CHEMICAL NEDERLAND, LTD.
By: /s/ Morris Gelb
----------------------------------
Morris Gelb
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities indicated on June 29, 1999.
Signature Title
/s/ Morris Gelb President
- -------------------------------------
Morris Gelb
(Principal Executive Officer)
/s/ T. Kevin DeNicola Director
- -------------------------------------
T. Kevin DeNicola
/s/ Robert J. Millstone Director
- -------------------------------------
Robert J. Millstone
/s/ Edward W. Rich Director and Vice President and
- ------------------------------------- Treasurer
Edward W. Rich
/s/ Joseph M. Putz Chief Financial Officer
- -------------------------------------
Joseph M. Putz
(Principal Financial Officer)
/s/ Kelvin R. Collard Controller
- -------------------------------------
Kelvin R. Collard
(Principal Accounting Officer)
II-10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
<C> <S>
3.1 Amended and Restated Certificate of Incorporation of Lyondell
Chemical Worldwide, Inc.
3.2 Amended and Restated By-Laws of Lyondell Chemical Worldwide, Inc.
3.3 Amended and Restated Certificate of Incorporation of Lyondell
Chemical Nederland, Ltd.
3.4 Amended and Restated By-Laws of Lyondell Chemical Nederland, Ltd.
4.1 Registration Rights Agreement by and among Lyondell Chemical
Company, Lyondell Chemical Worldwide, Inc., Lyondell Chemical
Nederland, Ltd. and Donaldson, Lufkin & Jenrette Securities
Corporation, J.P. Morgan Securities Inc., Salomon Smith Barney,
Inc., Chase Securities Inc. and NationsBanc Montgomery Securities
LLC, dated as of May 17, 1999
4.2 Indenture among Lyondell Chemical Company, the Subsidiary
Guarantors party thereto and The Bank of New York, as Trustee,
dated as of May 17, 1999, for 9 5/8% Senior Secured Notes,
Series A, due 2007
4.3 Indenture among Lyondell Chemical Company, the Subsidiary
Guarantors party thereto and The Bank of New York, as Trustee,
dated as of May 17, 1999, for 9 7/8% Senior Secured Notes,
Series B, due 2007
4.4 Indenture among Lyondell Chemical Company, the Subsidiary
Guarantors party thereto and The Bank of New York, as Trustee,
dated as of May 17, 1999, for 10 7/8% Senior Subordinated Notes
due 2009
5 Opinion of Baker & Botts, L.L.P.
*12 Statement Setting Forth Detail for Computation of Ratio of
Earnings to Fixed Charges (Filed as an exhibit to Lyondell's
Annual Report on Form 10-K for the year ended December 31, 1998
and incorporated herein by reference)
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Baker & Botts, L.L.P. (included in Exhibit 5)
**24.1 Powers of Attorney for Lyondell Chemical Company
**24.2 Powers of Attorney for Lyondell Chemical Worldwide, Inc.
**24.3 Powers of Attorney for Lyondell Chemical Nederland, Ltd.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Series
A Senior Secured Notes
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Series
B Senior Secured Notes
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture relating to the Senior
Subordinated Notes
99.1 Form of Letter to DTC Participants for 9 5/8% Senior Secured
Notes, Series A, due 2007
99.2 Form of Letter to DTC Participants for 9 7/8% Senior Secured
Notes, Series B, due 2007
99.3 Form of Letter to DTC Participants for 10 7/8% Senior Subordinated
Notes due 2009
99.4 Form of Letter to Clients for 9 5/8% Senior Secured Notes, Series
A, due 2007
</TABLE>
- --------
* Incorporated by reference from the filing indicated.
** To be filed by amendment.
II-11
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
<C> <S>
99.5 Form of Letter to Clients for 9 7/8% Senior Secured Notes, Series
B, due 2007
99.6 Form of Letter to Clients for 10 7/8% Senior Subordinated Notes
due 2009
99.7 Form of Notice of Guaranteed Delivery for 9 5/8% Senior Secured
Notes, Series A, due 2007
99.8 Form of Notice of Guaranteed Delivery for 9 7/8% Senior Secured
Notes, Series A, due 2007
99.9 Form of Notice of Guaranteed Delivery for 10 7/8% Senior Secured
Notes, Series A, due 2009
99.10 Form of Letter of Transmittal for 9 5/8% Senior Secured Notes,
Series A, due 2007
99.11 Form of Letter of Transmittal for 9 7/8% Senior Secured Notes,
Series B, due 2007
99.12 Form of Letter of Transmittal for 10 7/8% Senior Subordinated
Notes due 2009
</TABLE>
II-12
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ARCO CHEMICAL COMPANY
**********
ARCO Chemical Company (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL"), hereby adopts this Amended and Restated Certificate of
Incorporation, which accurately restates and integrates the provisions of the
existing Certificate of Incorporation of the Corporation and any and all
amendments thereto that are in effect on the date hereof (the "Certificate of
Incorporation") and further amends the provisions of the Certificate of
Incorporation as described below, and does hereby further certify that:
A. The name of the Corporation is ARCO Chemical Company, The Corporation
was originally incorporated under the name "ARCO Chemical Corporation" and the
original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on December 31, 1965.
B. The Board of Directors of the Corporation duly adopted a resolution
proposing and declaring advisable the amendments to the Certificate of
Incorporation as described herein, and the Corporation's stockholders duly
adopted such amendments, all in accordance with the provisions of Sections 228,
242 and 245 of the DGCL.
C. The Certificate of Incorporation is hereby restated and further
amended to read in its entirety as follows:
1. The name of the Corporation is ARCO Chemical Company.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent as such address is
The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations
may be organized under the DGCL.
4. The total number of shares of stock which the Corporation shall
have authority to issue is: One Thousand (1.000) and the par value of each
of such shares is No Dollars and One Cents ($0.01) amounting in the
aggregate to Ten Dollars and Zero Cents ($10).
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<PAGE>
5. The Corporation is to have perpetual existence.
6. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
7. A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director except for liability (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 the DGCL, or (iv)
for any transaction from which the director derived any improper personal
benefit.
I, THE UNDERSIGNED, being the Vice President of the Corporation, for the
purpose of amending and restating its Certificate of Incorporation pursuant to
the DGCL, do make this Certificate, hereby declaring and certifying that this is
my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this _____ day of July, 1998.
ARCO CHEMICAL COMPANY
By: ------------------------------------
Kerry A. Galvin
Vice President
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
**********
ARCO Chemical Company, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
1. That the Board of Directors and the sole stockholder, by unanimous
written consent of the Board of Directors and written consent of the sole
stockholder, filed with the minutes of the Board, adopted a resolution proposing
and declaring advisable the following amendment to the Amended and Restated
Certificate of Incorporation of said corporation:
RESOLVED, that, pursuant to the provisions of Section 242 of the
General Corporation Law of the State of Delaware, the Amended and Restated
Certificate of Incorporation of ARCO Chemical Company, be amended by
changing the First Article thereof, so that, as amended, said Article shall
be and read as follows:
"1. The name of the Corporation is LYONDELL CHEMICAL WORLDWIDE,
INC."
2. That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Sections 228 and 242 of the General Corporation Law of
the State of Delaware.
3. That the effective date of this Certificate of Amendment shall be
January 1, 1999.
IN WITNESS WHEREOF, ARCO Chemical Company has caused this Certificate of
Amendment to be signed by Robert J. Millstone, its Vice President and attested
by Valerie H. Perry, its Assistant Secretary, as of this _____ day of December,
1998.
ARCO Chemical Company
By: ---------------------------------------
Robert J. Millstone
Vice President
Attest:--------------------
Valerie H. Perry
Assistant Secretary
<PAGE>
BY-LAWS
of
LYONDELL CHEMICAL WORLDWIDE, INC.
ARTICLE I
OFFICES
Section 1. Principal Office. -- The principal office shall be established
and maintained at the office of the Corporation Trust Company, in the City of
Wilmington, in the County of New Castle, in the State of Delaware, and said
corporation shall be the resident agent of this corporation in charge thereof.
Section 2. Other Offices. -- The corporation may have other offices,
either within or outside of the State of Delaware at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of meetings. -- All meetings of stockholders shall be
held at the principal office of the corporation or at such other place as shall
be fixed by the Board of Directors or by vote of the stockholders.
Section 2. Annual Meetings. -- The annual meeting of stockholders for the
election of directors and the transaction of other business shall be held once
per calendar year on the second Thursday in June of such year at 10:00 a.m.
local time or on such other day and at such other time as shall be fixed by the
Board of Directors or by vote of the stockholder.
At each annual meeting, the stockholders entitled to vote shall elect a
Board of Directors and they may transact such other corporate business as shall
be stated in the notice of the meeting.
Section 3. Voting. -- Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-laws, shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to vote held by such stockholder, but no
proxy shall be voted after three years from its date unless such proxy provides
for a longer period. All elections for directors shall be decided by plurality
vote; all other questions shall be decided by majority vote except as otherwise
provided by the Certificate of Incorporation or the Delaware General Corporation
Law (the "DGCL").
Section 4. Quorum. -- Except as otherwise required by the Certificate of
Incorporation, these By-Laws or the DGCL, the presence, in person or by proxy,
of stockholders holding a majority of the stock of the corporation entitled to
vote shall constitute a quorum at all meetings of the
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<PAGE>
stockholders. In case a quorum shall not be present at any meeting, a majority
in interest of the stockholders entitled to vote thereat, present in person or
by proxy, shall have power to adjourn the meeting from time to time without
notice other than announcement at the meeting, until the requisite amount of
stock entitled to vote shall be present. At any such adjourned meeting at which
the requisite amount of stock entitled to vote shall be represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed; but only those stockholders entitled to vote at the meeting
as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof.
Section 5. Special Meetings. -- Special meetings of the stockholders for
any purpose or purposes may be called by the Board of Directors, the Chairman of
the Board, if any, the President, any Vice President, the Secretary or any
Assistant Secretary or by vote of the stockholders. No business other than that
stated in the notice of the meeting shall be transacted at any special meeting.
Section 6. Notice of Meetings. -- Notice of any meeting, stating the
place, date and hour of the meeting, and in the case of a duly called special
meeting, the purpose or purposes for which the meeting is called, shall be given
by the Chairman of the Board, if any, the President, any Vice President, the
Secretary, or any Assistant Secretary by written, telegraphic, or by any other
means of communication to each stockholder entitled to vote at his address as it
appears on the records of the corporation not less than ten days nor more than
sixty days before the meeting.
Section 7. Action without Meeting. -- Whenever the vote of stockholders at
a meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the Certificate of Incorporation, these
By-Laws or the DGCL, the meeting and vote of stockholders may be dispensed with,
if, subject to the provisions of the DGCL, a consent in writing,setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all stockholders entitled to vote
thereon were present and voted.
Section 8. Organization. -- Meetings of the stockholders shall be presided
over by the Chairman of the Board, if any, the President, any Vice President, or
in their absence by a chairman to be chosen by a majority of the stockholders
entitled to vote at the meeting who are present in person or by proxy. The
Secretary, an Assistant Secretary, or in their absence, any person appointed by
the chairman of the meeting shall act as secretary of the meeting.
ARTICLE III
DIRECTORS
Section 1. Number and Term. -- The number of directors which shall
constitute the whole board shall be one or more, with the specific number
thereof to be determined from time to time by the Board of Directors or by the
stockholders. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
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<PAGE>
Section 2. Resignations. -- Any director may resign at any time. Such
resignation shall be made in writing, and shall take effect at the time
specified therein, and if no time be specified, at the time of its receipt by
the President or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective.
Section 3. Vacancies. -- Unless otherwise provided in the Certificate of
Incorporation or these By-Laws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors, may be filled
by a majority of the directors then in office, although less than a quorum, or
by a sole remaining director. If at any time, by reason of death or resignation
or other cause, the corporation should have no directors in office, then any
officer or any stockholder may call a special meeting of stockholders in
accordance with the provisions of the Certificate of Incorporation or these By-
Laws to elect one or more directors.
Section 4. Removal. -- Any director or directors may be removed with or
without cause at any time by the affirmative vote of the holders of a majority
of all the shares of stock outstanding and entitled to vote.
Section 5. Powers. -- The Board of Directors shall exercise all of the
powers of the corporation except such as are conferred upon or reserved to the
stockholders by the Certificate of
Incorporation, these By-Laws or otherwise by law.
Section 6. Committees. -- The Board of Directors may, by resolution or
resolutions, passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation, which, to the extent provided in said resolution or resolutions or
in these By-Laws, shall have and may exercise the powers of the Board in the
management of the business and affairs of the corporation. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board. The committees shall keep regular minutes of
their proceedings and report the same to the board when required. The Board
shall have power at any time to fill vacancies in, change the membership of,
designate one or more directors as alternate members of, or discharge any such
committee.
Section 7. Meetings. -- An annual organizational meeting of the Board of
Directors may be held without notice immediately after the annual meeting of the
stockholders or at such other time and place as may be fixed by consent in
writing of all the directors.
Regular meetings of the Board of Directors may be held without notice at
such places and times as shall be determined from time to time by resolution of
the Board.
Special meetings of the Board of Directors may be called by Chairman of the
Board, if any, the President, the Secretary or the greater of one director or
one-third of the entire Board on at least two days' notice to each director and
shall be held at such place or places as may be agreed upon by the directors, or
as shall be stated in the call of the meeting.
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<PAGE>
Members of the Board of Directors or any committee designated by the Board,
may participate in a meeting of the Board or of such committee, as the case may
be, by conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this procedure shall constitute presence
in person at such meeting.
Meetings of the Board of Directors shall be presided over by the Chairman
of the Board, if any, or in his absence by the President, or in their absence by
a chairman chosen at the meeting. The Secretary or an Assistant Secretary shall
act as secretary of the meeting, but in their absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.
Section 8. Action Without Meeting. -- Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board or of such
committee, as the case may be, consent thereto in writing and such written
consent is filed with the minutes of the proceedings of the Board or committee.
Section 9. Quorum. -- At all meetings of the Board of Directors or of any
committee thereof, one-third of the entire Board or committee shall constitute a
quorum for the transaction of business. However, whenever the Board or the
stockholders shall determine that there be two or less members of the Board or
committee, then and only then, one director shall constitute a quorum.
Except as otherwise provided by the Certificate of Incorporation, these By-
Laws or the DGCL, the act of a majority of the directors at a meeting at which a
quorum is present shall be the act of the Board of Directors. If at any meeting
of the Board a quorum shall not be present, the members of the Board present may
adjourn the meeting from time to time until a quorum shall have been obtained.
Section 10. Compensation. -- Directors shall not receive any stated salary
for their services as directors or as members of committees, but by resolution
of the board a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
ARTICLE IV
OFFICERS
Section 1. Officers. -- The officers of the corporation shall be a
President, one or more Vice Presidents, a Treasurer, and a Secretary, and such
Assistant Treasurers and Assistant Secretaries as the Board of Directors may
deem proper. In addition, the Board may elect a Chairman of the Board. All of
such officers shall be elected by the Board. None of the officers, except the
Chairman of the Board, if any, need be directors. The officers shall be elected
at the first meeting of the Board after each annual meeting of stockholders and
each officer elected shall hold office until his successor is
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<PAGE>
elected and qualified or until his earlier resignation or removal. Any number of
offices may be held by the same person, except that the President shall not also
be the Secretary.
Section 2. Other Officers and Agents. -- The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board.
Section 3. Chairman. -- The Chairman of the Board, if one be elected,
shall preside at all meetings of the Board of Directors and he shall have and
perform such other duties as from time to time may be assigned to him by the
Board.
Section 4. President. -- The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management and execution usually vested in the office of
President of a corporation. He shall preside, in the absence or non-election of
the Chairman of the Board, at all meetings of the stockholders and of the Board
of Directors, shall have general supervision, direction and control of the
business of the corporation and shall perform such other duties as from time to
time may be specified by the Board.
Section 5. Treasurer. -- The Treasurer shall have the care and custody of
the funds and securities of the corporation and shall have such powers and
perform such duties as are incident to the office of Treasurer, or as may from
time to time be specified by the Board of Directors. The Treasurer shall be
subject to the control of the Board and to the powers of the President.
Section 6. Secretary. -- The Secretary shall attend all meetings of the
Board of Directors and of the stockholders and shall have the care and custody
of the seal and the minute books of the corporation and shall have such powers
and perform such duties as are incident to the office of the Secretary or as may
from time to time be specified by the Board. The Secretary shall be subject to
the control of the Board.
Section 7. Assistant Officers. -- Unless otherwise provided in these By-
Laws, the Vice Chairman of the Board, any Vice President, any Assistant
Secretary and any Assistant Treasurer, if any, shall, in the order of their
respective seniorities, in the absence or disability of the Chairman of the
Board, President, Secretary or Treasurer, respectively, perform the duties of
such officer and shall generally assist the Chairman of the Board, President,
Secretary or Treasurer, respectively.
Section 8. Resignations. -- Any officer may resign at any time upon
written notice to the corporation. Such resignation shall take effect at the
time specified therein, or if no time specified, at the time of its receipt by
the President, the Secretary or the Board of Directors.
Section 9. Vacancies. -- A vacancy in any office arising from any cause
may be filled by the Board of Directors.
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<PAGE>
Section 10. Removal. -- The Board of Directors may remove any officer with
or without cause at any time.
ARTICLE V
MISCELLANEOUS
Section 1. Certificates of Stock. -- Certificates of stock, numbered and
with the seal of the corporation affixed, signed by the President or Vice
President, and the Treasurer or an Assistant Treasurer, or Secretary or an
Assistant Secretary, shall be issued to each stockholder certifying the number
of shares owned by him in the corporation. When such certificates are signed by
a transfer agent or an assistant transfer agent or by a transfer clerk acting on
behalf of the corporation and a registrar, the signatures of such officers may
be facsimiles.
Section 2. Lost Certificate. -- A new certificate of stock may be issued in
the place of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost or destroyed certificate, or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against any claim
that may be made against it on account of the alleged loss of any such
certificate, or the issuance of any such new certificate.
Section 3. Transfer of Shares. -- The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
such other person as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer, and a duplicate thereof mailed to the Delaware office,
and whenever a transfer shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer.
Section 4. Closing of Transfer Books. -- The Board of Directors shall have
power to close the stock transfer books of the corporation for a period not more
than five days preceding the date of any meeting of stockholders, the date for
payment of any dividend, the date for the allotment of rights or the date when
any change or conversion or exchange of capital stock shall go into effect;
provided, however, that in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date not more than sixty
days, and in the case of any meeting of stockholders not less than ten days,
preceding the day of any meeting of stockholders or the date for the payment of
any dividend, the date for the allotment of rights or the date when any change
or conversion or exchange of capital stock shall go into effect, as a record
date for the determination of the stockholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividends
or any such allotment of rights or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, and in such case such
stockholders only as shall be stockholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend or to receive such allotment of rights or to
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<PAGE>
exercise such rights, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.
Section 5. Dividends. -- Subject to the provisions of the Certificate of
Incorporation and the DGCL, the Board of Directors may, out of funds legally
available therefor at any regular or special meeting, declare dividends upon the
capital stock of the corporation as and when they deem expedient. Before
declaring any dividend there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the directors from time
to time in their discretion deem proper for working capital or as a reserve fund
to meet contingencies or for equalizing dividends or for such other purposes as
the directors shall deem conducive to the interests of the corporation.
Section 6. Seal. -- The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"CORPORATE SEAL DELAWARE." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Fiscal Year. -- The fiscal year of the corporation shall be the
calendar year, unless otherwise determined by the Board of Directors.
Section 8. Checks. -- All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers, agent or agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 9. Notice and Waiver of Notice. -- Whenever any notice is required
by these By-Laws to be given, personal notice is not meant unless expressly so
stated and any notice so required shall be deemed to be sufficient if given by
depositing the same in a post office box in a sealed post-paid wrapper,
addressed to the person entitled thereto at his last known post office address,
and such notice shall be deemed to have been given on the day of such mailing.
Stockholders not entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by the DGCL.
Whenever any notice whatever is required to be given under the provisions
of the Certificate of Incorporation, these By-Laws or the DGCL, a waiver thereof
in writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
Section 10. Voting Other Stocks. -- Unless otherwise directed by the Board
of Directors, the Chairman of the Board, if any, the President, any Vice
President, the Treasurer or the Secretary may vote any shares of stock issued by
another corporation and owned by the corporation at any stockholders' meeting of
such other corporation and the Chairman of the Board, if any, the President, any
Vice President, the Treasurer or the Secretary shall have the authority on
behalf of the corporation
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<PAGE>
to execute and deliver a proxy or proxies for any stockholders, meeting or give
any stockholders' consent in respect of the shares of stock of such other
corporation owned by the corporation.
ARTICLE VI
AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal of By-Law or By-Laws to be made, be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the Board of Directors, at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors, if notice of the
proposed alteration or repeal, or By-Laws to be made, be contained in the notice
of such special meeting.
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<PAGE>
EXHIBIT 3.3
CERTIFICATE OF INCORPORATION
OF
WILLET LIMITED
**********
FIRST. The name of the corporation is
WILLET LIMITED.
SECOND. Its registered office in the State of Delaware is located at No.
100 West Tenth Street, in the City of Wilmington, County of New Castle. The name
and address of its registered agent is The Corporation Trust Company, No. 100
West Tenth Street, Wilmington, Delaware.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To construct, own and operate plants and other facilities for
manufacturing, refining, producing, processing, blending, marketing and
preparing any and all petroleum products or derivatives thereof, any and
all chemical products and derivatives thereof, and any and all products
useful in manufacturing, refining, producing, processing, blending and
preparing any and all such petroleum and chemical products and derivatives
thereof whether or not consumed in whole or in part in such process, and
metals, ores and mineral substances of every description and kind; to
provide management and sales agency services; and barter, trade or
otherwise dispose of all manner of goods, wares and merchandise.
To engage in the business of developing, improving and acquiring
technical information concerning manufacturing processes in the
petrochemical field and to acquire, hold, use, sell, assign, lease,
mortgage, grant licenses and sublicenses in respect of letters patent of
the United States or any foreign country, patent rights, licenses and
privileges, Inventions, processes, copyrights, trade marks and trade names
relating to or useful in connection with any business of the corporation.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade,
deal in and deal with goods, wares and merchandise and personal property of
every class and description.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any
person, firm, association or corporation.
To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares of the capital
stock, or any voting trust certificates in respect of the shares of capital
stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts,
and other securities, obligations, choses in action and evidences of
indebtedness or interest issued or created by any corporations, joint stock
companies, syndicates, association, firms, trusts or persons, public or
private, or by the government of the United States of America, or by any
foreign government, or by any state, territory, province, municipality or
other political
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<PAGE>
subdivision or by any governmental agency, and as owner thereof to possess
and exercise all the rights, powers and privileges of ownership, including
the right to execute consents and vote thereon, and to do any and all acts
and things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation, municipality,
county, state, body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable
instrument and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance
or assignment in trust of the whole or any part of the property of the
corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
corporation for its corporate purposes.
To loan to any person, firm or corporation any of its surplus funds,
either with or without security.
To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds; or property for the purchase of
its own shares of capital stock when such use would cause any impairment of
its capital except as otherwise permitted by law, and provided further that
shares of its own capital stock belonging to it shall not be voted upon
directly or indirectly.
To have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount, to purchase,
lease or otherwise acquire, hold, own, mortgage, sell, convey or otherwise
dispose of, real and personal property of every class and description in
any of the states, districts, territories or colonies of the United States,
and in any and all foreign countries, subject to the laws of such state,
districts territory, colony or country.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the laws of
Delaware upon corporations formed under the General Corporation Law of the State
of Delaware, and to do any or all of the things hereinbefore set forth to the
same extent as natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall, except
where otherwise expressed, be in nowise limited or restricted by reference to,
or inference from, the terms of any other clause in this certificate of
incorporation, but the objects and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent objects and purposes.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is eleven thousand (11,000) shares of which ten thousand
(10,000) shares of the par value of One Hundred Dollars ($100.00) each,
amounting in the aggregate to One Million Dollars ($1,000,000.00) shall be
Preferred stock and one thousand (1,000) shares of the par value of
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Ten Dollars ($10.00) each, amounting in the aggregate to Ten Thousand Dollars
($10,000.00) shall Common stock.
The board of directors is hereby expressly vested with authority to fix and
determine by resolution at the time of issuance, the preference, qualifications,
privileges, limitations, restrictions, and other special or relative rights and
terms and conditions of the Preferred stock.
The board of directors is authorized to fix by resolution or resolutions,
the voting powers, if any, full or limited, the designations and the powers,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, in respect of the
Preferred stock to the full extent now or hereafter permitted by the laws of
Delaware, except as otherwise provided In the certificate of incorporation or
any amendment thereto or any certificate setting forth the resolutions fixing
the terms of any class.
Every holder of shares of Common stock shall be entitled to one (1) vote at
all stockholders' meetings for each share so held. The holders of shares of the
Preferred stock shall have no right to vote and shall not be entitled to notice
of any meeting of stockholders of the corporation nor to participate in any such
meeting, except as required by law or as herein otherwise expressly provided.
FIFTH. The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars ($1,000.00).
SIXTH. The names and mailing addresses of the incorporators are as
follows:
NAMES MAILING ADDRESS
----- ---------------
B. J. CONSONO 100 West Tenth Street
Wilmington, Delaware
F. J. OBARA, Jr. 100 West Tenth Street
Wilmington, Delaware
J. L. RIVERA 100 West Tenth Street
Wilmington, Delaware
SEVENTH. The corporation in to have perpetual existence.
EIGHTH. The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatever.
NINTH. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the
real and personal property of the corporation.
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To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any
such reserve in the manner in which it was created.
By resolution passed by a majority of the whole board, to designate
one or more committees, each committee to consist of two or more of the
directors of the corporation, which, to the extent provided in the
resolution or in the by-laws of the corporation, shall have and may
exercise the powers of the board of directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be stated in
the by-laws of the corporation or as may be determined from time to time by
resolution adopted by the board of directors.
When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by
the written consent of the holders of a majority of the voting stock issued
and outstanding, to sell, lease or exchange all of the property and assets
of the corporation, including its good will and its corporate franchises,
upon such terms and conditions and for such consideration, which may be in
whole or in part shares of stock in, and/or other securities of, any other
corporation or corporations, as its board of directors shall deem expedient
and for the best interests of the corporation.
TENTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement shall, the said compromise or arrangement and the said
reorganization if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
ELEVENTH. Meetings of stockholders may be held outside the State of
Delaware, if the by-laws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of directors
need not be by ballot unless the by-laws of the corporation shall so provide.
TWELFTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
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<PAGE>
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring and
certifying that the facts herein stated are true. and accordingly have hereunto
set our hands and seals this _____ day of ____________________, 1970.
-----------------------------------
-----------------------------------
-----------------------------------
STATE OF DELAWARE (S)
(S) ss:
COUNTY OF NEW CASTLE (S)
BE IT REMEMBERED that on this _____ day of ____________________, 1970,
personally came before me, a Notary Public for the State of Delaware, B. J,
CONSONO, F. J. OBARA, Jr. and J. L. RIVERA all of the parties to the foregoing
certificate of incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively and that the facts stated therein are true.
GIVEN under my hand and seal of office the day and year aforesaid.
-----------------------------------
Notary Public
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
WILLET LIMITED, a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, at a meeting duly
held, adopted a resolution proposing and declaring advisable the following
amendment to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of WILLET LIMITED be
amended by changing the first Article thereof so that, as amended, said
article shall be and read as follows:
"FIRST. The name of the corporation is OXIRANE CHEMIE NEDERLAND,
LTD."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said WILLET LIMITED has caused this certificate to be
signed by ________________, its president, and attested by ________________, its
__________________ secretary, this _____ day of ____________________, 1980.
WILLET LIMITED
By: ________________________________________
President
ATTEST:
By: ____________________
Asst. Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OXIRANE CHEMIE NEDERLAND, LTD., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation adopted a
resolution by the unanimous consent of its members, with the minutes of the
board, proposing and declaring advisable the following amendment to the
Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of Oxirane Chemie
Nederland, Ltd. be amended by changing the first Article thereof so that,
as amended, said Article shall be and read as follows:
"1. The name of the corporation is ARCO Chemie Nederland, Ltd."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, said OXIRANE CHEMIE NEDERLAND, LTD. has caused this
certificate to be signed by D. W. McPhail, its Vice President and attested by H.
W. Gill, Jr., its Secretary this _____ day of September, 1981.
OXIRANE CHEMIE NEDERLAND, LTD.
By: ______________________________________
Vice President
ATTEST:
By: _____________________
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
ARCO CHEMIE NEDERLAND, LTD., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of said corporation, by the unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of ARCO CHEMIE NEDERLAND,
LTD. be amended by changing the First Article thereof so that, as amended,
said Article shall be and read as follows:
"1. The name of the corporation is LYONDELL CHEMIE NEDERLAND,
LTD."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said ARCO CHEMIE NEDERLAND, LTD. has caused this
certificate to be signed by Robert J. Millstone, its Vice President, and
attested by Connie E. Cothran, its Assistant Secretary, this ______ day of
_________________, 1998.
ARCO CHEMIE NEDERLAND, LTD.
By: ______________________________________
Vice President
ATTEST:
By: _____________________
Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
LYONDELL CHEMIE NEDERLAND, LTD., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of LYONDELL CHEMIE
NEDERLAND, LTD. be amended by changing the First Article thereof so that,
as amended, said Article shall be and read as follows:
"1. The name of the corporation is LYONDELL CHEMICAL NEDERLAND,
LTD."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said LYONDELL CHEMIE NEDERLAND, LTD. has caused this
certificate to be signed by Robert J. Millstone, its Vice President, and
attested by Connie E. Cothran, its Assistant Secretary, this ______ day of
________________, 1998.
LYONDELL CHEMIE NEDERLAND, LTD.
By: __________________________________
Vice President
ATTEST:
By: _____________________
Assistant Secretary
<PAGE>
Exhibit 3.4
BY-LAWS
of
ARCO Chemie Nederland, Ltd.
ARTICLE I
OFFICES
Section 1. Principal Office. -- The principal office shall be established
and maintained at the office of the Corporation Trust Company, in the City of
Wilmington, in the County of New Castle, in the State of Delaware, and said
corporation shall be the resident agent of this corporation in charge thereof.
Section 2. Other Offices. -- The corporation may have other offices,
either within or outside of the State of Delaware at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. -- All meetings of stockholders shall be
held at the principal office of the corporation or at such other place as shall
be fixed by the Board of Directors or by vote of the stockholders.
Section 2. Annual Meetings. -- The annual meeting of stockholders for the
election of directors and the transaction of other business shall be held once
per calendar year on the second Thursday in June of such year at 10:00 a.m.
local time or on such other day and at such other time as shall be fixed by the
Board of Directors or by vote of the stockholder.
At each annual meeting, the stockholders entitled to vote shall elect a
Board of Directors and they may transact such other corporate business as shall
be stated in the notice of the meeting.
Section 3. Voting. -- Each stockholder entitled to vote in accordance with
the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-laws, shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to vote held by such stockholder, but no
proxy shall be voted after three years from its date unless such proxy provides
for a longer period. All elections for directors shall be decided by plurality
vote; all other questions shall be decided by majority vote except as otherwise
provided by the Certificate of Incorporation or the Delaware General Corporation
Law (the "DGCL").
Section 4. Quorum. -- Except as otherwise required by the Certificate of
Incorporation, these By-Laws or the DGCL, the presence, in person or by proxy,
of stockholders holding a majority of the stock of the corporation entitled to
vote shall constitute a quorum at all meetings of the
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stockholders. In case a quorum shall not be present at any meeting, a majority
in interest of the stockholders entitled to vote thereat, present in person or
by proxy, shall have power to adjourn the meeting from time to time without
notice other than announcement at the meeting, until the requisite amount of
stock entitled to vote shall be present. At any such adjourned meeting at which
the requisite amount of stock entitled to vote shall be represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed; but only those stockholders entitled to vote at the meeting
as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof.
Section 5. Special Meetings. -- Special meetings of the stockholders for
any purpose or purposes may be called by the Board of Directors, the Chairman of
the Board, if any, the President, any Vice President, the Secretary or any
Assistant Secretary or by vote of the stockholders. No business other than that
stated in the notice of the meeting shall be transacted at any special meeting.
Section 6. Notice of Meetings. -- Notice of any meeting, stating the
place, date and hour of the meeting, and in the case of a duly called special
meeting, the purpose or purposes for which the meeting is called, shall be given
by the Chairman of the Board, if any, the President, any Vice President, the
Secretary, or any Assistant Secretary by written, telegraphic, or by any other
means of communication to each stockholder entitled to vote at his address as it
appears on the records of the corporation not less than ten days nor more than
sixty days before the meeting.
Section 7. Action without Meeting. -- Whenever the vote of stockholders at
a meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the Certificate of Incorporation, these
By-Laws or the DGCL, the meeting and vote of stockholders may be dispensed with,
if, subject to the provisions of the DGCL, a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all stockholders entitled to vote
thereon were present and voted.
Section 8. Organization. -- Meetings of the stockholders shall be presided
over by the Chairman of the Board, if any, the President, any Vice President, or
in their absence by a chairman to be chosen by a majority of the stockholders
entitled to vote at the meeting who are present in person or by proxy. The
Secretary, an Assistant Secretary, or in their absence, any person appointed by
the chairman of the meeting shall act as secretary of the meeting.
ARTICLE III
DIRECTORS
Section 1. Number and Term. -- The number of directors which shall
constitute the whole board shall be one or more, with the specific number
thereof to be determined from time to time by the Board of Directors or by the
stockholders. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
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<PAGE>
Section 2. Resignations. -- Any director may resign at any time. Such
resignation shall be made in writing, and shall take effect at the time
specified therein, and if no time be specified, at the time of its receipt by
the President or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective.
Section 3. Vacancies. -- Unless otherwise provided in the Certificate of
Incorporation or these By-Laws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors, may be filled
by a majority of the directors then in office, although less than a quorum, or
by a sole remaining director. If at any time, by reason of death or resignation
or other cause, the corporation should have no directors in office, then any
officer or any stockholder may call a special meeting of stockholders in
accordance with the provisions of the Certificate of Incorporation or these By-
Laws to elect one or more directors.
Section 4. Removal. -- Any director or directors may be removed with or
without cause at any time by the affirmative vote of the holders of a majority
of all the shares of stock outstanding and entitled to vote.
Section 5. Powers. -- The Board of Directors shall exercise all of the
powers of the corporation except such as are conferred upon or reserved to the
stockholders by the Certificate of Incorporation, these By-Laws or otherwise by
law.
Section 6. Committees. -- The Board of Directors may, by resolution or
resolutions, passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation, which, to the extent provided in said resolution or resolutions or
in these By-Laws, shall have and may exercise the powers of the Board in the
management of the business and affairs of the corporation. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board. The committees shall keep regular minutes of
their proceedings and report the same to the board when required. The Board
shall have power at any time to fill vacancies in, change the membership of,
designate one or more directors as alternate members of, or discharge any such
committee.
Section 7. Meetings. -- An annual organizational meeting of the Board of
Directors may be held without notice immediately after the annual meeting of the
stockholders or at such other time and place as may be fixed by consent in
writing of all the directors.
Regular meetings of the Board of Directors may be held without notice at
such places and times as shall be determined from time to time by resolution of
the Board.
Special meetings of the Board of Directors may be called by Chairman of the
Board, if any, the President, the Secretary or the greater of one director or
one-third of the entire Board on at least two days' notice to each director and
shall be held at such place or places as may be agreed upon by the directors, or
as shall be stated in the call of the meeting.
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<PAGE>
Members of the Board of Directors or any committee designated by the Board,
may participate in a meeting of the Board or of such committee, as the case may
be, by conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this procedure shall constitute presence
in person at such meeting.
Meetings of the Board of Directors shall be presided over by the Chairman
of the Board, if any, or in his absence by the President, or in their absence by
a chairman chosen at the meeting. The Secretary or an Assistant Secretary shall
act as secretary of the meeting, but in their absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.
Section 8. Action Without Meeting. -- Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board or of such
committee, as the case may be, consent thereto in writing and such written
consent is filed with the minutes of the proceedings of the Board or committee.
Section 9. Quorum. -- At all meetings of the Board of Directors or of any
committee thereof, one-third of the entire Board or committee shall constitute a
quorum for the transaction of business. However, whenever the Board or the
stockholders shall determine that there be two or less members of the Board or
committee, then and only then, one director shall constitute a quorum.
Except as otherwise provided by the Certificate of Incorporation, these By-
Laws or the DGCL, the act of a majority of the directors at a meeting at which a
quorum is present shall be the act of the Board of Directors. If at any meeting
of the Board a quorum shall not be present, the members of the Board present may
adjourn the meeting from time to time until a quorum shall have been obtained.
Section 10. Compensation. -- Directors shall not receive any stated salary
for their services as directors or as members of committees, but by resolution
of the board a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
ARTICLE IV
OFFICERS
Section 1. Officers. -- The officers of the corporation shall be a
President, one or more Vice Presidents, a Treasurer, and a Secretary, and such
Assistant Treasurers and Assistant Secretaries as the Board of Directors may
deem proper. In addition, the Board may elect a Chairman of the Board. All of
such officers shall be elected by the Board. None of the officers, except the
Chairman of the Board, if any, need be directors. The officers shall be elected
at the first meeting of the Board after each annual meeting of stockholders and
each officer elected shall hold office until his successor is
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<PAGE>
elected and qualified or until his earlier resignation or removal. Any number of
offices may be held by the same person, except that the President shall not also
be the Secretary.
Section 2. Other Officers and Agents. -- The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board.
Section 3. Chairman. -- The Chairman of the Board, if one be elected,
shall preside at all meetings of the Board of Directors and he shall have and
perform such other duties as from time to time may be assigned to him by the
Board.
Section 4. President. -- The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management and execution usually vested in the office of
President of a corporation. He shall preside, in the absence or non-election of
the Chairman of the Board, at all meetings of the stockholders and of the Board
of Directors, shall have general supervision, direction and control of the
business of the corporation and shall perform such other duties as from time to
time may be specified by the Board.
Section 5. Treasurer. -- The Treasurer shall have the care and custody of
the funds and securities of the corporation and shall have such powers and
perform such duties as are incident to the office of Treasurer, or as may from
time to time be specified by the Board of Directors. The Treasurer shall be
subject to the control of the Board and to the powers of the President.
Section 6. Secretary. -- The Secretary shall attend all meetings of the
Board of Directors and of the stockholders and shall have the care and custody
of the seal and the minute books of the corporation and shall have such powers
and perform such duties as are incident to the office of the Secretary or as may
from time to time be specified by the Board. The Secretary shall be subject to
the control of the Board.
Section 7. Assistant Officers. -- Unless otherwise provided in these By-
Laws, the Vice Chairman of the Board, any Vice President, any Assistant
Secretary and any Assistant Treasurer, if any, shall, in the order of their
respective seniorities, in the absence or disability of the Chairman of the
Board, President, Secretary or Treasurer, respectively, perform the duties of
such officer and shall generally assist the Chairman of the Board, President,
Secretary or Treasurer, respectively.
Section 8. Resignations. -- Any officer may resign at any time upon
written notice to the corporation. Such resignation shall take effect at the
time specified therein, or if no time specified, at the time of its receipt by
the President, the Secretary or the Board of Directors.
Section 9. Vacancies. -- A vacancy in any office arising from any cause
may be filled by the Board of Directors.
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Section 10. Removal. -- The Board of Directors may remove any officer with
or without cause at any time.
ARTICLE V
MISCELLANEOUS
Section 1. Certificates of Stock. -- Certificates of stock, numbered and
with the seal of the corporation affixed, signed by the President or Vice
President, and the Treasurer or an Assistant Treasurer, or Secretary or an
Assistant Secretary, shall be issued to each stockholder certifying the number
of shares owned by him in the corporation. When such certificates are signed by
a transfer agent or an assistant transfer agent or by a transfer clerk acting on
behalf of the corporation and a registrar, the signatures of such officers may
be facsimiles.
Section 2. Lost Certificate. -- A new certificate of stock may be issued
in the place of any certificate therefore issued by the corporation, alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost or destroyed certificate, or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against any claim
that may be made against it on account of the alleged loss of any such
certificate, or the issuance of any such new certificate.
Section 3. Transfer of Shares. -- The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
such other person as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer, and a duplicate thereof mailed to the Delaware office,
and whenever a transfer shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer.
Section 4. Closing of Transfer Books. -- The Board of Directors shall have
power to close the stock transfer books of the corporation for a period not more
than five days preceding the date of any meeting of stockholders, the date for
payment of any dividend, the date for the allotment of rights or the date when
any change or conversion or exchange of capital stock shall go into effect;
provided, however, that in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date not more than sixty
days, and in the case of any meeting of stockholders not less than ten days,
preceding the day of any meeting of stockholders or the date for the payment of
any dividend, the date for the allotment of rights or the date when any change
or conversion or exchange of capital stock shall go into effect, as a record
date for the determination of the stockholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividends
or any such allotment of rights or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, and in such case such
stockholders only as shall be stockholders of record on the date so fixed shall
be entitled to such notice of, and to vote
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at, such meeting, or to receive payment of such dividend or to receive such
allotment of rights or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
Section 5. Dividends. -- Subject to the provisions of the Certificate of
Incorporation and the DGCL, the Board of Directors may, out of funds legally
available therefor at any regular or special meeting, declare dividends upon the
capital stock of the corporation as and when they deem expedient. Before
declaring any dividend there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the directors from time
to time in their discretion deem proper for working capital or as a reserve fund
to meet contingencies or for equalizing dividends or for such other purposes as
the directors shall deem conducive to the interests of the corporation.
Section 6. Seal. -- The corporate seal shall be circular in form and shall
contain the name of the corporation, the year of its creation and the words
"CORPORATE SEAL DELAWARE." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Fiscal Year. -- The fiscal year of the corporation shall be the
calendar year, unless otherwise determined by the Board of Directors.
Section 8. Checks. -- All checks, drafts or other orders for the payment
of money, note or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers, agent or agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 9. Notice and Waiver of Notice. -- Whenever any notice is required
by these By-Laws to be given, personal notice is not meant unless expressly so
stated and any notice so required shall be deemed to be sufficient if given by
depositing the same in a post office box in a sealed post-paid wrapper,
addressed to the person entitled thereto at his last known post office address,
and such notice shall be deemed to have been given on the day of such mailing.
Stockholders not entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by the DGCL.
Whenever any notice whatever is required to be given under the provisions
of the Certificate of Incorporation, these By-Laws or the DGCL, a waiver thereof
in writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
Section 10. Voting Other Stocks. -- Unless otherwise directed by the Board
of Directors, the Chairman of the Board, if any, the President, any Vice
President, the Treasurer or the Secretary may vote any shares of stock issued by
another corporation and owned by the corporation at any stockholders' meeting of
such other corporation and the Chairman of the Board, if any, the President, any
Vice President, the Treasurer or the Secretary shall have the authority on
behalf of the
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<PAGE>
corporation to execute and deliver a proxy or proxies for any stockholders'
meeting or give any stockholders' consent in respect of the shares of stock of
such other corporation owned by the corporation.
ARTICLE VI
AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal of By-Law or By-Laws to be made, be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the Board of Directors, at any regular meeting of the Board of
Directors, or at any special meeting of the Board of Directors, if notice of the
proposed alteration or repeal, or By-Laws to be made, be contained in the notice
of such special meeting.
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<PAGE>
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
Dated as of May 17, 1999
by and among
LYONDELL CHEMICAL COMPANY
LYONDELL CHEMICAL WORLDWIDE, INC.
LYONDELL CHEMICAL NEDERLAND, LTD.
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 17, 1999, by and among Lyondell Chemical Company, a Delaware
corporation (the "Company"), Lyondell Chemical Worldwide, Inc. ("LCW"), Lyondell
Chemical Nederland, Ltd., a Delaware corporation (together with LCW, the
"Guarantors"), and Donaldon, Lufkin & Jenrette Securities Corporation, J. P.
Morgan Securities Inc., Salomon Smith Barney Inc., Chase Securities Inc. and
NationsBanc Montgomery Securities LLC (each an "Initial Purchaser" and,
collectively, the "Initial Purchasers"), each of whom has agreed to purchase the
Company's 9 5/8% Senior Secured Notes, Series A, due 2007 (the "Series A
Notes"), 9 7/8% Senior Secured Notes, Series B, due 2007 (the "Series B Notes",
and together with the Series A Notes, the "Senior Notes") and 10 7/8% Senior
Subordinated Notes due 2009 (the "Subordinated Notes" and, together with the
Senior Notes, the "Initial Notes") pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement, dated May 11,
1999, (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Initial Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Indenture
relating to the Series A Notes among the Company, the Guarantors and The Bank of
New York, as trustee, the Indenture relating to the Series B Notes among the
Company, the Guarantors and The Bank of New York, as trustee and the Indenture
relating to the Subordinated Notes among the Company, the Guarantors and The
Bank of New York, as trustee (collectively, the "Indentures").
The parties hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date hereof.
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Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement with respect to a series of Initial Notes upon the occurrence
of (a) the filing and effectiveness under the Act of the Exchange Offer
Registration Statement relating to Exchange Notes to be issued in the Exchange
Offer with respect to such series of Notes, (b) the maintenance of such Exchange
Offer Registration Statement continuously effective and the keeping of the
applicable Exchange Offer open for a period not less than the period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar under the applicable Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Initial Notes validly
tendered and not withdrawn by Holders thereof pursuant to the applicable
Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
Effectiveness Deadline: As defined in Sections 3(b) and 4(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Company's 9 5/8% Senior Secured Exchange Notes, Series
A, due 2007, 9 7/8% Senior Secured Exchange Notes, Series B, due 2007 and
10 7/8% Senior Subordinated Exchange Notes due 2009 to be issued pursuant to the
applicable Indenture: (i) in the respective Exchange Offers or (ii) as
contemplated by Section 6(b) hereof.
Exchange Offer: The exchange and issuance by the Company of a principal
amount of a series of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of the series of Initial Notes issued under the same Indenture that are validly
tendered and not withdrawn by Holders in connection with such exchange and
issuance.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offers for each series of Initial Notes, including the related
Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Initial Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
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Holders: As defined in Section 2 hereof.
Majority Holders: As defined in Section 6(c)(xi) hereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company and the
Guarantors relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including post-
effective amendments) and all exhibits and material incorporated by reference
therein.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
Suspension Period: As defined in Section 4(c) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the Closing Date.
Transfer Restricted Securities: (I) Each Initial Note, until the earliest
to occur of (a) the date on which such Initial Note is exchanged in an Exchange
Offer for an Exchange Note and entitled to be resold to the public without
complying with the prospectus delivery requirements of the Act, (b) the date on
which such Initial Note has been disposed of in accordance with a Shelf
Registration Statement (and, if an Exchange Offer with respect to the relevant
series of Notes has been Consummated prior to such purchase, purchasers thereof
have been issued Exchange Notes), or (c) the date on which such Initial Note is
distributed to the public pursuant to Rule 144 under the Act (and, if an
Exchange Offer with respect to the relevant series of Notes has been Consummated
prior to such purchase, purchasers thereof have been issued Exchange Notes) or
is
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<PAGE>
saleable pursuant to Rule 144(k) under the Act and each (II) Exchange Note
issued to a Broker-Dealer in an Exchange Offer until the date on which such
Exchange Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the Prospectus contained therein).
Section 2. Holders.
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
Section 3. Registered Exchange Offers.
(a) Unless an Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a)(i) below have been complied
with), the Company and the Guarantors shall (i) cause the Exchange Offer
Registration Statement with respect to each series of Initial Notes to be filed
with the Commission as soon as practicable after the Closing Date, but in no
event later than 90 days after the Closing Date (such 90th day being the "Filing
Deadline"), (ii) use their best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event later than 210 days after the Closing Date (such 210th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Exchange Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement and within the time period contemplated by
Section 3(b) hereof, commence and Consummate the Exchange Offer with respect to
each series of Initial Notes. Each Exchange Offer shall be on the appropriate
form permitting (i) registration of the Exchange Notes to be offered in exchange
for the Initial Notes that are Transfer Restricted Securities and (ii) resales
of Exchange Notes by Broker-Dealers that tendered into the Exchange Offer
Initial Notes that such Broker-Dealer acquired for its own account as a result
of market making activities or other trading activities (other than Initial
Notes acquired directly from the Company or any of its Affiliates) as
contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective best efforts
to cause the Exchange Offer Registration Statement to be effective continuously,
and shall keep the Exchange Offer with respect to each series of Initial Notes
open for a period of not less than the minimum period required under
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applicable federal and state securities laws to Consummate such Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Company and the Guarantors shall cause the Exchange Offers to comply
with all applicable federal and state securities laws. No securities other than
the Exchange Notes shall be included in the Exchange Offer Registration
Statement. The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer with respect to each series of Initial Notes
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter (such 30th day being the "Consummation Deadline").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Initial Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the Prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Exchange Notes by Broker-Dealers, the Company and the Guarantors agree to use
their respective best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(a) and 6(c) hereof and in conformity
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
180 days from the Consummation Deadline or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold pursuant thereto or are no longer outstanding. The Company and
the Guarantors shall provide sufficient copies of the latest version of such
Prospectus
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<PAGE>
to such Broker-Dealers, promptly upon request, and in no event later than one
day after such request, at any time during such period.
Section 4. Shelf Registration.
(a) Shelf Registration. If (i) an Exchange Offer is not permitted by
applicable law (after the Company and the Guarantors have complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company within 20 Business Days following
the Consummation Deadline that (A) such Holder was prohibited by law or
Commission policy from participating in the applicable Exchange Offer or (B)
such Holder may not resell the Exchange Notes acquired by it in the applicable
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Initial Notes acquired directly from the Company or any of its
Affiliates, then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 30 days after the earlier of (i) the
date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause 4(a)(i) above and (ii) the date
on which the Company receives the notice specified in clause 4(a)(ii) above,
(such earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "Shelf Registration Statement")), relating to
(1) all Transfer Restricted Securities of each series of Initial Notes with
respect to which an Exchange Offer is not permitted in the case of clause
4(a)(i) above or (2) the Transfer Restricted Securities specified in any notice
in the case of clause 4(a)(ii), and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 60 days after the
Filing Deadline for the Shelf Registration Statement (such 60th day the
"Effectiveness Deadline").
If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
4(a)(i) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; provided that,
in such event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
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<PAGE>
To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and 6(c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(d)) following the Closing Date, or such shorter period as
will terminate on the earlier of the date when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto, no longer constitute Transfer Restricted Securities or are no longer
outstanding.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information which is required by rules of the Commission to be included in the
Shelf Registration Statement prior to the time it is declared effective. Each
selling Holder agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
(c) Suspension. The Company and the Guarantors will have the ability to
suspend the Shelf Registration Statement (a "Suspension Period"), if the Company
and the Guarantors determine, in their reasonable best judgment, upon written
advice of counsel, that the continued effectiveness and use of the Shelf
Registration Statement would require the disclosure of confidential information
or interfere with any financing, acquisition, reorganization or other material
transaction involving the Company. A Suspension Period shall commence on and
include the date that the Company and the Guarantors give notice that the Shelf
Registration Statement is no longer effective or the Prospectus included therein
is no longer usable for offers and sales of Transfer Restricted Securities
covered by such Registration Statement and continue until holders of such
Transfer Restricted Securities either receive the copies of the supplemented or
amended prospectus contemplated by Section 6(c) hereof or are advised in writing
by the Company
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and the Guarantors that use of the Prospectus may be resumed. Any such
suspensions may not exceed (i) 60 days in the aggregate in the first twelve
month period after the Closing Date, (ii) 60 days in the aggregate in the twelve
month period immediately thereafter and (iii) 90 days in the aggregate during
any subsequent twelve month period.
Section 5. Liquidated Damages.
If (a) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (b) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (c) the Exchange Offer with
respect to any series of Initial Notes has not been Consummated on or prior to
the Consummation Deadline or (d) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable (provided that the unavailability of a
Registration Statement for the use of a Holder as a result of such Holder's
failure to provide information pursuant to Section 4(b) or make representations
required by Section 6(a)(ii) shall not be deemed to make the Registration
Statement fail to be usable) for its intended purpose (except as provided in,
and during the time periods specified in, Section 4(c)) without being succeeded
within five days by a post-effective amendment to such Registration Statement
that cures such failure and that is itself declared effective within 10 days of
the filing of such post-effective amendment (each such event referred to in
clauses (a) through (d), a "Registration Default"), then the Company and each
of the Guarantors hereby jointly and severally agree to pay to each Holder of
Transfer Restricted Securities affected thereby liquidated damages in an amount
equal to $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of such Registration Default. The amount of the liquidated
damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of liquidated damages of $.50 per week per $1,000 in principal amount of
Transfer Restricted Securities; provided that the Company and the Guarantors
shall in no event be required to pay liquidated damages with respect to a series
of Notes for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (i) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of clause (a) above, (ii) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of clause (b) above,
(iii) upon Consummation of the Exchange Offer, in the case of clause (c) above,
or (iv) upon the filing of a post-effective amendment to the Registration
Statement or an additional
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Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of clause (d) above, in each case with
respect to the applicable series of Notes, the liquidated damages payable with
respect to the Transfer Restricted Securities of such series of Notes as a
result of such clause (a), (b), (c) or (d), as applicable, shall cease to
accrue.
All accrued liquidated damages shall be paid to the record Holders entitled
thereto, in the manner provided for the payment of interest in the applicable
Indenture, on each Interest Payment Date, as more fully set forth in the
applicable Indenture and the Notes. Notwithstanding the fact that any
securities for which liquidated damages are due cease to be Transfer Restricted
Securities, all obligations of the Company and the Guarantors to pay liquidated
damages with respect to securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in full.
Section 6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Exchange Notes by
Broker-Dealers that tendered in the Exchange Offer Initial Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Initial Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a change in
Commission policy with respect to exchange offers such as the Exchange Offer,
that in the reasonable opinion of counsel to the Company raises a substantial
question as to whether the Exchange Offer is permitted by applicable federal
law, the Company and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Company and the
Guarantors to Consummate an Exchange Offer for such Transfer Restricted
Securities. The Company and the Guarantors hereby agree to pursue the issuance
of such a decision to the Commission staff level but shall not be required to
take commercially unreasonable action to effect a change of Commission policy.
In connection with the foregoing, the Company and the Guarantors hereby agree to
take all such other actions (other than such actions as may be commercially
unreasonable) as may be requested by the Commission or otherwise required in
connection with the issuance of such decision,
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including without limitation (A) participating in telephonic conferences with
the Commission, (B) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted and (C)
diligently pursuing a resolution (which need not be favorable) by the Commission
staff.
(ii) As a condition to its participation in the Exchange Offer, each Holder
of Transfer Restricted Securities (including, without limitation, any Holder who
is a Broker Dealer) shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company and
the Guarantors (which may be contained in the letter of transmittal contemplated
by the Exchange Offer Registration Statement) to the effect that (A) that such
Holder is not an Affiliate of the Company or a Broker-Dealer tendering Initial
Notes acquired directly from the Company for its own account, (B) such Holder
will have no arrangement or understanding with any person to participate in the
distribution of the Initial Notes or the Exchange Notes within the meaning of
the Act, (C) if the Holder is not a Broker-Dealer or is a Broker-Dealer but
will not receive Exchange Notes for its own account in exchange for Initial
Notes, neither the Holder nor any such other Person is engaged in or intends to
participate in a distribution of the Exchange Notes, and (D) any Exchange Notes
received by such Holder will be acquired in the ordinary course of its business.
If the Holder is a Broker-Dealer that will receive Exchange Notes for its own
account in exchange for Initial Notes, it will represent that the Initial Notes
to be exchanged for the Exchange Notes were acquired by it as a result of
market-making activities or other trading activities, and will acknowledge that
it will deliver a prospectus meeting the requirements of the Act in connection
with any resale of such Exchange Notes. It is understood that, by acknowledging
that it will deliver, and by delivering, a prospectus meeting the requirements
of the Act in connection with any resale of such Exchange Notes, the Holder is
not admitting that it is an "underwriter" within the meaning of the Act.
(iii) Prior to effectiveness of the Exchange Offer Registration Statement,
the Company and the Guarantors shall provide a supplemental letter to the
Commission (A) stating that the Company and the Guarantors are registering the
Exchange Offer in reliance on the position of the Commission enunciated in Exxon
Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action letter
obtained pursuant to Section 6(a)(i) above, (B) including a representation that
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neither the Company nor any of the Guarantors has entered into any arrangement
or understanding with any Person to distribute the Exchange Notes to be received
in the Exchange Offer and that, to the best of the Company's and each
Guarantor's information and belief, each Holder participating in the Exchange
Offer is acquiring the Exchange Notes in its ordinary course of business and has
no arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer and (C) any
other undertaking or representation required by the Commission as set forth in
any no-action letter obtained pursuant to Section 6(a)(i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall
(i) comply with all the provisions of Section 6(c) below and use their
respective reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof, and
(ii) issue, upon the request of any Holder or purchaser of Initial Notes
covered by any Shelf Registration Statement contemplated by this Agreement,
Exchange Notes having an aggregate principal amount equal to the aggregate
principal amount of Initial Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Company for cancellation; the Company shall
register Exchange Notes on the Shelf Registration Statement for this purpose and
issue the Exchange Notes to the purchaser(s) of securities subject to the Shelf
Registration Statement in the names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
(i) use their respective best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for the
period specified in Section 3 or 4 of this Agreement, as applicable. Upon the
occurrence of any event that would cause any such
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Registration Statement or the Prospectus contained therein (A) to contain an
untrue statement of material fact or omit to state any material fact necessary
to make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement curing such defect, and, if
Commission review is required, use their respective reasonable best efforts to
cause such amendment to be declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as the case may be; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with Rules 424, 430A and 462, as applicable, under the Act in a timely manner;
and comply with the provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the Initial Purchasers and, in the case of a Shelf
Registration Statement, each Holder of securities covered thereby, promptly and,
if requested by such Holder, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any applicable Registration Statement or any post-
effective amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or of
the suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company and the
Guarantors shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(v) furnish to the Initial Purchasers and, in the case of a Shelf
Registration Statement, each Holder of securities covered thereby, in connection
with such exchange or sale, if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period of at
least five Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which such Holders shall reasonably object within five Business Days after
the receipt thereof. A Holder shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading or fails to comply with the applicable
requirements of the Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to the Initial Purchasers and in the case of a Shelf
Registration Statement, each Holder of securities covered thereby, in connection
with such exchange or sale, if any, make the
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Company's and each Guarantor's representatives available for discussion of such
document and other customary due diligence matters, and include such information
in such document prior to the filing thereof as the Initial Purchasers or such
Holders may reasonably request;
(vii) make available, at reasonable times, for inspection by the Initial
Purchasers and, in the case of a Shelf Registration Statement, each Holder of
securities covered thereby, and the designated counsel or any accountant
retained by such Holders, all financial and other records, pertinent corporate
documents of the Company and each Guarantor and cause the Company's and each
Guarantor's officers, directors and employees to supply all information
reasonably requested by any such Initial Purchaser, Holder, attorney or
accountant in connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness; provided, however, that such persons shall first agree in writing
with the Company and the Guarantors that any information that is reasonably and
in good faith designated by the Company and the Guarantors in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of such Registration Statement or
the use of any Prospectus), (iii) such information becomes generally available
to the public other than as a result of a disclosure or failure to safeguard
such information by such person or (iv) such information becomes available to
such person from a source other than the Company and its subsidiaries and such
source is not known, after due inquiry, by such person to be bound by a
confidentiality agreement; provided further, that the foregoing investigation
shall be coordinated on behalf of such persons by one representative designated
by and on behalf of such persons and any such confidential information shall be
available from such representative to such persons so long as any person agrees
to be bound by such confidentiality agreement;
(viii) if requested by the Initial Purchasers and, in the case of a Shelf
Registration Statement, any Holders of securities covered thereby, in connection
with such exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such Persons may reasonably request to have included
therein, including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities; and make all required
filings of such Prospectus
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<PAGE>
supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be included in such Prospectus supplement or post-
effective amendment;
(ix) furnish to the Initial Purchasers and, in the case of a Shelf
Registration Statement, each Holder of securities covered thereby, in connection
with such exchange or sale, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(x) deliver to each Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company and the
Guarantors hereby consent to the use (in accordance with law) of the Prospectus
and any amendment or supplement thereto by each selling Holder in connection
with the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;
(xi) in the case of a Shelf Registration Statement, enter into such
agreements (including underwriting agreements) and, the case of any Registration
Statement contemplated by this Agreement, make such representations and
warranties and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any applicable Registration Statement contemplated by this Agreement
as may be reasonably requested by any Initial Purchaser or, in the case of a
Shelf Registration Statement, the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities covered thereby (the "Majority
Holders") in connection with any sale or resale pursuant to any applicable
Registration Statement. In such connection, the Company shall:
(A) upon request of the Majority Holders (in the case of a Shelf
Registration Statement) or any Initial Purchaser (in the case of an Exchange
Offer), furnish (or in the case of Sections 6(c)(xi)(A)(2) and 6(c)(xi)(A)(3),
use its best efforts to cause to be furnished) to each Holder upon Consummation
of the Exchange Offer or upon the effectiveness of the Shelf Registration
Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf of the Company and
each Guarantor by (x) the President or
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any Vice President and (y) a principal financial or accounting officer of the
Company and the Guarantor, confirming, as of the date thereof, the matters set
forth in Sections 6(d), 9(a) and 9(b) of the Purchase Agreement and such other
similar matters as may be reasonably requested;
(2) an opinion, dated the date of Consummation of the Exchange Offer or
the date of effectiveness of the Shelf Registration Statement, as the case may
be, of counsel for the Company and the Guarantors covering matters similar to
those set forth in paragraphs (e), (f) and (g) of Section 9 of the Purchase
Agreement and such other matter as may be reasonably requested, and in any event
including a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Company and the
Guarantors, representatives of the independent public accountants for the
Company and the Guarantors and have considered the matters required to be stated
therein and the statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of the foregoing
(relying as to materiality to the extent such counsel deems appropriate upon the
statements of officers and other representatives of the Company and the
Guarantors and without independent check or verification), no facts came to such
counsel's attention that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement or any post-
effective amendment thereto became effective and, in the case of the Exchange
Offer Registration Statement, as of the date of Consummation of the Exchange
Offer, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained in such Registration
Statement as of its date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such
17
<PAGE>
counsel assumes no responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of Consummation of the
Exchange Offer, or as of the date of effectiveness of the Shelf Registration
Statement, as the case may be, from the Company's independent accountants, in
the customary form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with underwritten offerings, and
affirming the matters set forth in the comfort letters delivered pursuant to
Section 9(j) of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be reasonably
requested by any of the Initial Purchasers or, in the case of any Shelf
Registration Statement, the Majority Holders, to evidence compliance with the
matters covered in Section 6(c)(xi)(A) above and with any customary conditions
contained in any agreement entered into by the Company and the Guarantors
pursuant to this Section 6(c)(xi);
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the Holders named in the applicable Registration Statement (or
any prospectus supplement thereto) and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as any such Holders may
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; provided, however, that
neither the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted Securities that
will result in such securities no longer being Transfer Restricted Securities,
cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to
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<PAGE>
be sold and not bearing any restrictive legends; and, subject to the provisions
of the Indenture regarding global securities, to register such Transfer
Restricted Securities in such denominations and such names as the selling
Holders may request at least two Business Days prior to such sale of Transfer
Restricted Securities;
(xiv) use their respective best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in Section 6(c)(xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Registration Statement covering such Transfer
Restricted Securities and provide the Trustee under the applicable Indenture
with printed certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with the Depository Trust Company;
(xvi) otherwise use their respective best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders with regard to any applicable Registration Statement, as
soon as practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xvii) cause the Indentures to be qualified under the TIA not later than
the effective date of the first Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indentures as may be required for such
Indentures to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indentures to be so
qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each document filed
with the Commission pursuant to the requirements of Section 13 or Section 15(d)
of the Exchange Act.
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(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 4(c) or Section 6(c)(iii)(C) or any notice from the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof (in
each case, a "Suspension Notice"), such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until (i) such Holder has received copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or
(ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "Recommencement Date"). Each Holder receiving a Suspension
Notice hereby agrees that it will either (i) destroy any Prospectuses, other
than permanent file copies, then in such Holder's possession which have been
replaced by the Company with more recently dated Prospectuses or (ii) deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the Prospectus covering such
Transfer Restricted Securities that was current at the time of receipt of the
Suspension Notice. The time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall
be extended by a number of days equal to the number of days in the period from
and including the date of delivery of the Suspension Notice to the date of
delivery of the Recommencement Date.
No holder may participate in any underwritten registration under the
Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
Section 7. Registration Expenses.
(a) All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses,
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company, the Guarantors and, in accordance with Section 7(b)
below, the Holders of Transfer Restricted Securities; (v) all application and
filing fees in connection with listing the Exchange Notes on a national
securities
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<PAGE>
exchange or automated quotation system pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified public accountants of
the Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any Guarantor.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Initial Notes in the Exchange Offer and/or selling
or reselling Initial Notes or Exchange Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Davis Polk & Wardwell,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
Section 8. Indemnification.
(a) The Company and each of the Guarantors agree, jointly and severally,
to indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments, (including without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto) provided by the Company to any Holder or any prospective purchaser of
Exchange Notes or registered Initial Notes, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders provided, however, that the foregoing indemnity agreement
with respect
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<PAGE>
to the preliminary prospectus shall not inure to the benefit of any Holder who
failed to deliver the Prospectus, as then amended or supplemented (so long as
the Prospectus and any such amendment or supplement was provided by the Company
to the Holders in the requisite quantity and on a timely basis to permit proper
delivery) to the person asserting any losses, claims, damages, liabilities or
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
material misstatement or omission or alleged material misstatement or omission
was cured in the Prospectus, as so amended or supplemented.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company or the Guarantors to the same extent as the foregoing indemnity from
the Company and the Guarantors set forth in Section 8(a) above, but only with
reference to information relating to such Holder furnished in writing to the
Company by such Holder expressly for use in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto).
In no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the total
amount received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment
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of such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company and the Guarantors, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than sixty days after the indemnifying party
shall have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party) and more than twenty days after the
indemnifying party shall have received notice of the proposed settlement and,
prior to the date of such settlement, the indemnifying party shall have failed
to comply with such reimbursement request. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the
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relative benefits received by the Company and the Guarantors, on the one hand,
and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Guarantors, on the one hand, or by the Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Guarantors and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective principal amount of Transfer Restricted Securities held by each
Holder hereunder and not joint.
Section 9. Rule 144A and Rule 144.
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The Company and each Guarantor agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company or any Guarantor (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of
the Exchange Act, to make all filings required thereby in a timely manner in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.
Section 10. Miscellaneous.
(a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and/or any Guarantor to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce
the Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
which remains in effect granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's and the Guarantors' securities under any agreement in
effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this clause 10(c)(i), the Company has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities (excluding Transfer Restricted Securities held by the
25
<PAGE>
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the applicable Indenture, with a copy to the Registrar under
such Indenture; and
(ii) if to the Company or the Guarantors:
One Houston Center, Suite 700
1221 McKinney Street
Houston, Texas 77010
Telecopier No.: 713-309-2143
Attention: General Counsel
With a copy to:
Baker & Botts
710 Louisiana
Houston, Texas 77002
Telecopier No.: 713-229-1522
Attention: Steve Massad, Esq.
All such 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 receipt
26
<PAGE>
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the applicable Trustee
at the address specified in the relevant Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the applicable Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
27
<PAGE>
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
28
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
LYONDELL CHEMICAL COMPANY
By:
---------------------------------------
Name:
Title:
LYONDELL CHEMICAL WORLDWIDE, INC.
By:
---------------------------------------
Name:
Title:
LYONDELL CHEMICAL NEDERLAND, LTD.
By: ____________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J. P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
NATIONSBANC MONTOGOMERY
SECURITIES LLC
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: ___________________________________
Name:
Title:
29
<PAGE>
CROSS-REFERENCE TARGET LIST
===========================
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(THIS LIST IS FOR THE USE OF THE WORDPROCESSOR ONLY, IS NOT A PART OF THIS
DOCUMENT AND MAY BE DISCARDED.)
<TABLE>
<CAPTION>
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=============== =========== =============== =========== =============== =========== =============== ===========
<S> <C> <C> <C> <C> <C> <C> <C>
2.................. holders
3.................. reg.exch.off
3(a)............... deadline
3(b)............... off.eff
3(c)............... plan.dist
4.................. shelf.reg
4(a)............... shelf.reg.dead
4(a)(i)............ exch.off.not.perm
4(a)(ii)........... holder.notify
4(b)............... prov.cert.info
5.................. liq.dam
6.................. reg.pro
6(a)............... exch.off.reg.stmt
6(a)(i)............ chg.comm.policy
6(b)............... shelf.reg.stmt
6(b)(i)............ sale.trans.restrict
6(b)(ii)........... series.b.notes
6(c)............... gen.prov
6(c)(i)............ reg.cont.eff
6(c)(iii).......... aff.mark.marker
6(c)(iii)(C)....... iss.stop.order
6(c)(iii)(D)....... exist.fact.untrue
6(c)(iv)........... prepare.supp
6(c)(xi)........... holder.req
6(c)(xi)(A)........ req.holder
6(c)(xi)(A)(2)..... co.coun.opin
6(c)(xi)(A)(3)..... comfort.ltr
6(c)(xii).......... blue.sky
6(d)............... restrict.holders
8.................. indem
8(a)............... co.indem
8(b)............... holder.indem
8(c)............... indem.party
8(d)............... indem.unavail
8(d)(i)............ appro.propor
10(c)(i)........... writ.consent.holder
</TABLE>
30
<PAGE>
LYONDELL CHEMICAL COMPANY,
the SUBSIDIARY GUARANTORS party hereto
and
THE BANK OF NEW YORK,
as Trustee
______________
INDENTURE
Dated as of May 17, 1999
______________
9 5/8% Senior Secured Notes, Series A, Due 2007
<PAGE>
TABLE OF CONTENTS
--------------
PAGE
----
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions 1
Section 1.02. Other Definitions 29
Section 1.03. Rules of Construction 29
Section 1.04. Incorporation by Reference of TIA 30
Section 1.05. Conflict with TIA 30
Section 1.06. Compliance Certificates and Opinions 30
Section 1.07. Form of Documents Delivered to Trustee 31
Section 1.08. Acts of Noteholders; Record Dates 32
Section 1.09. Notices, Etc., to Trustee and Company 34
Section 1.10. Notices to Holders; Waivers 34
Section 1.11. Effect of Headings and Table of Contents 34
Section 1.12. Successors and Assigns 34
Section 1.13. Separability Clause 35
Section 1.14. Benefits of Indenture 35
Section 1.15. Governing Law 35
Section 1.16. Legal Holidays 35
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders 35
Section 1.18. Exhibits and Schedules 35
Section 1.19. Counterparts 35
ARTICLE 2
Note Forms
Section 2.01. Forms Generally 36
Section 2.02. Form of Trustee' Certificate of Authentication 36
Section 2.03. Restrictive Legends 37
ARTICLE 3
The Notes
Section 3.01. Title and Terms 38
Section 3.02. Denominations 39
Section 3.03. Execution, Authentication and Delivery and Dating 39
Section 3.04. Temporary Notes 40
Section 3.05. Registration, Registration of Transfer and Exchange 40
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes 41
Section 3.07. Payment of Interest Rights Preserved 42
Section 3.08. Persons Deemed Owners 43
Section 3.09. Cancellation 43
Section 3.10. Computation of Interest 43
<PAGE>
PAGE
----
Section 3.11. Payment of Liquidated Damages 43
Section 3.12. CUSIP Numbers 44
Section 3.13. Book-entry Provisions for Global Notes 44
Section 3.14. Transfer Provisions 45
ARTICLE 4
Covenants
Section 4.01. Payment of Principal, Premium and Interest 48
Section 4.02. Maintenance of Office or Agency 49
Section 4.03. Money for Payments to Be Held in Trust 49
Section 4.04. SEC Reports 50
Section 4.05. Certificates to Trustee 51
Section 4.06. Limitation on Indebtedness 51
Section 4.07. Limitation on Restricted Payments 55
Section 4.08. Limitation on Dividend and other Payment
Restrictions affecting Restricted Subsidiaries
and Joint Ventures 61
Section 4.09. Limitation on Sales of Assets 64
Section 4.10. Limitation on Affiliate Transactions 66
Section 4.11. Limitation on Liens 67
Section 4.12. Equal and Ratable Liens 67
Section 4.13. No Amendment to Subordination Provisions 67
Section 4.14. Repurchase of Notes upon a Change in Control 68
Section 4.15. Limitation on Sale and Leaseback Transactions 68
Section 4.16. Limitation on Line of Business 69
Section 4.17. Limitation on Accounts Receivable Facilities 69
Section 4.18. Limited Applicability of Covenants when Notes
are rated Investment-Grade 69
Section 4.19. Existence 69
Section 4.20. Payment of Taxes and Other Claims 69
Section 4.21. Maintenance of Properties and Insurance 70
Section 4.22. Limitation on Issuance of Guarantees by
Restricted Subsidiaries 70
Section 4.23. Payments for Consents 71
ARTICLE 5
Consolidation, Merger or Sale of Assets
Section 5.01. Consolidation, Merger or Sale of Assets by the Company 71
Section 5.02. Successor Company Substituted 72
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor 72
Section 5.04. Opinion of Counsel to Trustee 73
ii
<PAGE>
PAGE
----
ARTICLE 6
Remedies
Section 6.01. Events of Default 73
Section 6.02. Acceleration 75
Section 6.03. Other Remedies 75
Section 6.04. Waiver of Past Defaults 76
Section 6.05. Control by Majority 76
Section 6.06. Limitation on Suits 76
Section 6.07. Rights of Holders to Receive Payment 76
Section 6.08. Collection Suit by Trustee 77
Section 6.09. Trustee May File Proofs of Claim 77
Section 6.10. Priorities 77
Section 6.11. Undertaking for Costs 78
Section 6.12. Restoration of Rights and Remedies 78
Section 6.13. Rights and Remedies Cumulative 78
Section 6.14. Waiver of Stay, Extension or Usury Laws 78
ARTICLE 7
The Trustee
Section 7.01. Certain Duties and Responsibilities 79
Section 7.02. Notice of Defaults 79
Section 7.03. Certain Rights of Trustees 80
Section 7.04. Not Responsible for Recitals or Issuance of Notes 81
Section 7.05. Trustee's Disclaimer 81
Section 7.06. May Hold Notes 81
Section 7.07. Money Held in Trust 81
Section 7.08. Compensation and Reimbursement 81
Section 7.09. Conflicting Interests 82
Section 7.10. Corporate Trustee Required; Eligibility 82
Section 7.11. Resignation and Removal; Appointment of Successor 82
Section 7.12. Acceptance of Appointment by Successor 84
Section 7.13. Merger, Conversion, Consolidation or Succession
to Business 84
Section 7.14. Preferential Collection of Claims Against the Company 84
Section 7.15. Appointment of Authenticating Agent 84
ARTICLE 8
Holders' List and Reports by Trustee and the Company
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing 85
Section 8.02. Preservation of Information; Communications to Holders 85
Section 8.03. Reports by Trustee 85
iii
<PAGE>
PAGE
----
ARTICLE 9
Amendment, Supplement or Waiver
Section 9.01. Without Consent of the Holders 86
Section 9.02. With Consent of Holders 86
Section 9.03. Execution of Amendments, Supplements or Waivers 88
Section 9.04. Revocation and Effect of Consents 88
Section 9.05. Conformity with TIA 88
Section 9.06. Notation on or Exchange of Notes 88
ARTICLE 10
Redemption of Notes
Section 10.01. Right of Redemption 89
Section 10.02. Applicability of Article 89
Section 10.03. Election to Redeem; Notice to Trustee 89
Section 10.04. Selection by Trustee of Notes to Be Redeemed 89
Section 10.05. Notice of Redemption 90
Section 10.06. Deposit of Redemption Price 90
Section 10.07. Notes Payable on Redemption Date 91
Section 10.08. Notes Redeemed in Part 91
ARTICLE 11
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharges of Indenture 91
Section 11.02. Application of Trust Money 93
ARTICLE 12
Defeasance and Covenant Defeasance
Section 12.01. Option of the Company to Effect Defeasance
or Covenant Defeasance 93
Section 12.02. Legal Defeasance and Discharge 93
Section 12.03. Covenant Defeasance 93
Section 12.04. Conditions to Legal or Covenant Defeasance 94
Section 12.05. Deposited Money and Government Securities to
Be Held in Trust; Other Miscellaneous Provisions 95
Section 12.06. Repayment to Company 96
Section 12.07. Reinstatement 96
ARTICLE 13
Subsidiary Guarantees
Section 13.01. The Guarantees 97
Section 13.02. Guarantee Unconditional 97
Section 13.03. Discharge; Reinstatement 98
iv
<PAGE>
PAGE
----
Section 13.04. Waiver by the Subsidiary Guarantors 98
Section 13.05. Subrogation and Contribution 98
Section 13.06. Stay of Acceleration 98
Section 13.07. Limits of Guarantees 98
Section 13.08. Execution and Delivery of Note Guarantee 101
ARTICLE 14
Security Arrangements
Section 14.01. Security 99
Section 14.02. Notice of Payment, Discharge or Defeasance 100
EXHIBIT A - Form of Note
EXHIBIT B - Form of Supplemental Indenture
v
<PAGE>
INDENTURE, dated as of May 17, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), among LYONDELL CHEMICAL COMPANY, a
Delaware corporation (as further defined below, the "Company"), the Subsidiary
Guarantors party hereto and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company and the Subsidiary Guarantors have duly authorized the
execution and delivery of this Indenture to provide for the issuance of (i)
initially, $900,000,000 aggregate principal amount of 9 5/8% Senior Secured
Notes, Series A, due 2007 of the Company (the "Initial Notes" and, together with
any Exchange Notes issued in respect thereof, the "Original Notes") and (ii) if
and when issued, additional 9 5/8% Senior Secured Notes, Series A, due 2007 of
the Company (the "Initial Additional Notes" and, together with any Exchange
Notes issued in respect thereof, the "Additional Notes") issuable as provided in
this Indenture, in each case, guaranteed to the extent provided herein and in
the Notes by the Subsidiary Guarantors. All things necessary to make the
Original Notes, when duly issued, executed and delivered by the Company and
authenticated and delivered by the Trustee hereunder, the valid obligation of
the Company, and to make this Indenture a valid agreement of the Company and the
Subsidiary Guarantors as of the date hereof, in accordance with the terms of the
Original Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the equal and ratable benefit of
all Holders, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.
"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of the
Company (i) which is formed solely for the purpose of, and which engages in no
activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries, (ii) which is
designated by the Company as an Accounts Receivables Subsidiary pursuant to an
Officer's Certificate delivered to the Trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which (a) is at any time
recourse to or obligates the Company or any Restricted Subsidiary in any way, or
subjects any property or asset of the Company or any Restricted Subsidiary,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to (I) representations, warranties and covenants (or, any
indemnity with respect to such representations, warranties and covenants)
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable to such
<PAGE>
Accounts Receivable Subsidiary or (II) any guarantee of any such accounts
receivable financing by the Company or any Restricted Subsidiary that is
permitted to be incurred pursuant to Section 4.06, (iv) with which neither the
Company nor any Restricted Subsidiary of the Company has any contract,
agreement, arrangement or understanding other than contracts, agreements,
arrangements and understandings entered into in the ordinary course of business
in connection with the sale (including a sale in exchange for a promissory note
of or Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable in accordance with Section 4.17 and fees payable in the ordinary
course of business in connection with servicing accounts receivable and (v) with
respect to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation (a) to subscribe for additional shares of Capital
Stock or other Equity Interests therein or make any additional capital
contribution or similar payment or transfer thereto other than in connection
with the sale (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable to such
Accounts Receivable Subsidiary in accordance with Section 4.17 or (b) to
maintain or preserve the solvency, any balance sheet term, financial condition,
level of income or results of operations thereof.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquired Disqualified Stock" means, with respect to any specified Person,
Disqualified Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Disqualified Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquiring Person" means a Person other than a Subject Assets Transferee
which acquires (i) all or a portion of the Subject Assets or (ii) an interest in
a Subject Assets Transferee in connection with a Major Asset Sale.
"Additional Notes" means any notes issued under this Indenture in addition
to the Original Notes, including any Exchange Notes issued in exchange therefor
having the same terms in all respects (or in all respects except payment of
interest (i) scheduled and paid prior to the date of issuance of such notes or
(ii) payable on the first Interest Payment Date following such date of
issuance).
"Adjusted Consolidated Cash Flow" means, for any period, the sum of
Consolidated Cash Flow of the Company for such period plus the aggregate
Distributable
2
<PAGE>
Joint Venture Cash Flow of the Company and its Restricted Subsidiaries,
determined on a consolidated basis, for such period.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.5%
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control; provided further that the foregoing proviso shall not
apply for purposes of Section 4.07(b)(vii) and Section 4.07(b)(ix) and clause
(d) of the definition of "Unrestricted Subsidiary".
"ARCO Chemical" means Lyondell Chemical Worldwide, Inc., a Delaware
corporation formerly named ARCO Chemical Company.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets other than the disposition of
inventory, equipment or Cash Equivalents in the ordinary course of business
consistent with past practices (provided that the sale, conveyance or other
disposition of all or substantially all the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of
Section 4.14 and/or the provisions of Section 5.01 and not by the provisions of
Section 4.09), (ii) the sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance
by any of the Company's Restricted Subsidiaries of Equity Interests of such
Restricted Subsidiary, in the case of clauses (i), (ii) or (iii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $25 million or (b) for Net Proceeds in excess of $25
million. Notwithstanding the foregoing: (a) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (b) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a
Restricted Payment that is permitted by Section 4.07; (d) an issuance of
Preferred Stock by a Finance Subsidiary that is permitted by Section 4.06; (e)
sales (including a sale in exchange for a promissory note of or Equity Interest
in such Accounts Receivable Subsidiary) of accounts receivable to an Accounts
Receivable Subsidiary in connection with any Receivables Facility permitted by
Section 4.17; and (f) Sale and Leaseback Transactions will not be deemed to be
an Asset Sale.
"Asset Sale Lien" means a Lien on the Subject Assets (including as a Lien
for this purpose contractual rights with respect to the operation of the Subject
Assets) arising
3
<PAGE>
in connection with a Major Asset Sale in favor of the Acquiring Person (or an
Affiliate thereof) which Lien does not secure any Indebtedness.
"Attributable Debt" in respect of a Sale and Leaseback Transaction that is
treated as a capital lease in accordance with GAAP means, at the time of
determination, the present value (discounted at the rate of interest implicit in
such transaction, determined in accordance with GAAP) of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended or may, at the option of the lessor, be extended).
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 7.15 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board of directors.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the board of directors (or any committee thereof)
of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee. Unless the context otherwise
requires, "Board Resolution" refers to a Board Resolution of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York or Houston, Texas are authorized
by law to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of not
more than one year from the date of acquisition, (c) demand deposits, time
deposits and certificates of deposit with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the United
States or any State thereof having capital, surplus and undivided profits in
excess of $500 million, (d) repurchase obligations with a term of not more than
seven days for underlying
4
<PAGE>
securities of the type described in clauses (b) and (c) above entered into with
any financial institution meeting the qualifications specified in clause (c)
above, (e) commercial paper rated at least P-1 or A-1 by Moody's or S&P,
respectively, and in each case maturing within six months after the date of
acquisition, (f) any fund investing exclusively in investments of the type
described in clauses (a) through (e) above and (g) in the case of a Foreign
Subsidiary, substantially similar investments denominated in foreign currencies
(including similarly capitalized foreign banks).
"Change of Control" means the occurrence of any of the following: (i) the
sale, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all the assets of the Company and its
Subsidiaries taken as a whole to any Person or group (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a Person or
group who, prior to such transaction, held a majority of the voting power of the
voting stock of the Company, (ii) the acquisition by any Person or group (as
defined above) of a direct or indirect interest in more than 50% of the voting
power of the voting stock of the Company, by way of merger or consolidation or
otherwise, or (iii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all assets of the Company and its Restricted
Subsidiaries which are subject to Liens pursuant to the terms and provisions of
the Security Documents in order to secure the Indenture Obligations equally and
ratably with the Existing Credit Facility Obligations.
"Collateral Agent" means Morgan Guaranty Trust Company of New York, as
collateral agent, or any other collateral agent under any or all of the Security
Documents.
"Company" means Lyondell Chemical Company, a Delaware corporation, and any
successor in interest thereto.
"Company Request," "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by an Officer of the Company.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the
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average of the Reference Treasury Dealer Quotations for such redemption date
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period (less the Net Income
of any Joint Venture to the extent included therein pursuant to clause (i) of
the definition of "Consolidated Net Income"), plus in each case, without
duplication
(i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period (including any provision for taxes on
the Net Income of any Joint Venture that is a pass-through entity for federal
income tax purposes, to the extent such taxes are paid or payable by such Person
or any of its Restricted Subsidiaries), to the extent that such provision for
taxes was included in computing such Consolidated Net Income,
(ii) the Fixed Charges of such Person and its Restricted Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in computing
such Consolidated Net Income,
(iii) depreciation and amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation and amortization were deducted in
computing such Consolidated Net Income and
(iv) any non-cash charges reducing Consolidated Net Income for such period
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period); minus
(v) any non-cash items increasing Consolidated Net Income for such period,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that
(i) the Net Income of any Person that is not a Restricted Subsidiary shall
be included only to the extent of the lesser of (x) the amount of dividends or
distributions paid in cash (but not by means of a loan) to the referent Person
or a Restricted Subsidiary
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thereof or (y) the referent Person's (or a Restricted Subsidiary of the referent
Person's) proportionate share of the Net Income of such other Person,
(ii) the Net Income (but not loss) of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and
(iv) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its Restricted Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of Preferred Stock (other than Disqualified Stock), less all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of tangible assets of a going concern business made in accordance with GAAP as a
result of the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person, and excluding the cumulative effect of a change in
accounting principles, all as determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election or any successor Continuing Directors appointed by such
Continuing Directors (or their successors).
"Corporate Trust Office" means the principal office of the Trustee, at
which at any particular time its corporate trust business shall be administered,
which office on the Issue Date is located at 101 Barclays Street, Floor 21 West,
New York, New York 10286.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in
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part, on or prior to the date on which the Notes mature; provided that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the date on which the Notes mature shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 4.09 of the
Senior Subordinated Notes Indenture and Section 4.14 hereof and such Capital
Stock specifically provides that such Person will not repurchase or redeem any
such stock pursuant to such provision prior to the Company's repurchase of such
Notes as are required pursuant to such covenants.
"Distributable Joint Venture Cash Flow" means, with respect to any Person
for any period, in the case of each Joint Venture that is not a Restricted
Subsidiary of the referent Person, the sum of
(I) the lesser of
(x) the amount of dividends or distributions paid in cash (but not by
means of a loan) by such Joint Venture to the referent Person or a
Restricted Subsidiary thereof or
(y) the referent Person's (or a Restricted Subsidiary of the referent
Person's) proportionate share of
(i) the Net Income of such Joint Venture for such period, plus
(ii) to the extent deducted therefrom, depreciation and
amortization (including amortization of goodwill and other intangibles
but excluding amortization of prepaid cash expenses that were paid in a
prior period) of such Joint Venture for such period, plus
(iii) any non-cash charges reducing Net Income of such Joint
Venture for such period (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash expenses in
any future period or amortization of a prepaid cash expense that was
paid in a prior period), less
(iv) any non-cash items increasing Net Income of such Joint Venture
for such period, minus
(II) the aggregate amount of all Investments made by the Company or any of
its Restricted Subsidiaries in such Joint Venture during such period pursuant to
Section 4.07(b)(viii),
in each case determined on a consolidated basis and in accordance with
GAAP.
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"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equistar Assumed Debt" means (i) the 10.00% Notes Due 1999 issued by the
Company pursuant to the Indenture dated as of May 31, 1989 between the Company
and Texas Commerce Bank, National Association, as trustee, as supplemented by
the First Supplemental Indenture dated as of May 31, 1989 and the Second
Supplemental Indenture dated as of December 1, 1997; (ii) the 9.125% Notes Due
2002 issued by the Company pursuant to an Indenture dated as of March 10, 1992
between the Company and First Trust National Association, as trustee, as
supplemented by the First Supplemental Indenture dated as of March 10, 1992 and
the Second Supplemental Indenture dated as of December 1, 1997; (iii) the 6.5%
Notes Due 2006 and 7.55% Notes Due 2026, each issued by the Company pursuant to
an Indenture dated as of January 29, 1996 between the Company and Texas Commerce
Bank National Association, as trustee, as supplemented by the First Supplemental
Indenture dated as of February 15, 1996 and the Second Supplemental Indenture
dated as of December 1, 1997; and (iv) Indebtedness under the medium term notes
issued by the Company, maturing at various dates from 1998 to 2005; in each case
outstanding as of the Issue Date and with respect to which, as between the
Company and Equistar, Equistar is the primary obligor and the Company is an
obligor; in each case, as may be amended from time to time, provided that any
such amendment does not increase the principal amount thereof or interest rate
applicable thereto or shorten the Weighted Average Life to Maturity or Stated
Maturity thereof or add any Restricted Subsidiary as an obligor with respect
thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Company issued pursuant
to this Indenture in exchange for, and in an aggregate principal amount at
maturity equal to, the Initial Notes or any Initial Additional Notes, in
compliance with the terms of a Registration Rights Agreement and containing
terms substantially identical to the Initial Notes or any Initial Additional
Notes (except that (i) such Exchange Notes shall not contain terms with respect
to transfer restrictions and shall be registered under the Securities Act and
(ii) certain provisions relating to Liquidated Damages thereon shall be
eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the
Initial Notes to exchange Outstanding Notes for Exchange Notes, as provided for
in a Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Existing ARCO Chemical Debt" means the 9.9% Debentures Due 2000, the
9.375% Debentures Due 2005, the 10.25% Debentures Due 2010 and the 9.8%
Debentures Due 2020, all issued by ARCO Chemical pursuant to the Indenture dated
June 15, 1988 between ARCO Chemical and The Bank of New York, as Trustee.
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"Existing Credit Facility" means that certain Credit Agreement dated as of
July 23, 1998 by and among the Company and Morgan Guaranty Trust Company of New
York, as administrative agent, DLJ Capital Funding, Inc., as syndication agent,
and the other lenders that are party thereto, including any related notes,
instruments, and agreements executed in connection therewith, as amended,
restated, modified, extended, renewed, refunded, replaced or refinanced, in
whole or in part, from time to time, whether or not with the same lenders or
agents.
"Existing Credit Facility Obligations" means all Obligations of the Company
and its Subsidiaries outstanding under the Existing Credit Facility and all
Hedging Obligations payable to a lender or an Affiliate thereof or to a Person
that was a lender or an Affiliate thereof at the time the contract was entered
into under the Existing Credit Facility, including, without limitation, interest
accruing subsequent to the filing of, or which would have accrued but for the
filing of, a petition for bankruptcy, whether or not such interest is an
allowable claim in such bankruptcy proceeding.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence, and considered Indebtedness of the Company
or any of its Restricted Subsidiaries, on the Issue Date, until such amounts are
repaid, including all reimbursement obligations with respect to letters of
credit outstanding as of the date of the Indenture.
"Existing Security Documents" means each of the Security Documents referred
to in clause (i) of the definition thereof, in each case as amended, modified,
restated or supplemented from time to time.
"Finance Subsidiary" means a Restricted Subsidiary of the Company, all the
Capital Stock of which (other than Preferred Stock) is owned by the Company that
does not engage in any activity other than: (i) holding of Indebtedness of the
Company; (ii) the issuance of Capital Stock; and (iii) any activity necessary,
incidental or related to the foregoing.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Adjusted Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the
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first day of the four-quarter reference period, (ii) the Adjusted Consolidated
Cash Flow and Fixed Charges attributable to operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but, in the case of such Fixed
Charges, only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date and (iii) if since the beginning of
the four-quarter reference period any Person was designated as an Unrestricted
Subsidiary or redesignated as or otherwise became a Restricted Subsidiary, such
event shall be deemed to have occurred on the first day of the four-quarter
reference period.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers' acceptance financings and net payments or receipts (if
any) pursuant to Hedging Obligations) and
(ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period and
(iii) any interest expense on Indebtedness of another Person (other
than Non-Recourse Debt of a Joint Venture or Unrestricted Subsidiary secured by
a pledge by the Company or any Restricted Subsidiary of Capital Stock which
pledge is permitted by Section 4.07(b)(xi) or Section 4.07(b)(xii)) that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and
(iv) the product of (a) all dividend payments (other than any payments to
the referent Person or any of its Restricted Subsidiaries) on any series of
Preferred Stock of such Person and its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP;
provided that (i) interest payments by Equistar on the Equistar Assumed
Debt and (ii) interest payments on Indebtedness of a Joint Venture shall, in
each case, not be deemed Fixed Charges of the Company as of any date of
determination when such Indebtedness is not considered Indebtedness of the
Company or any Restricted Subsidiary of the Company.
"Foreign Subsidiary" means any Restricted Subsidiary that has 50% or more
of its assets located outside the United States or any territory thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of
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Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, as in
effect on the Issue Date.
"General Partner" means a Restricted Subsidiary of the Company or any of
its Restricted Subsidiaries that has no assets and conducts no operations other
than its ownership of a general partnership interest in a Joint Venture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or Disqualified Stock 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 Disqualified Stock of such other Person (including those arising
by virtue of partnership arrangements (other than, in the case of the Company or
a Restricted Subsidiary of the Company, with respect to the obligations of a
Joint Venture, solely by virtue of a Restricted Subsidiary of the Company being
the General Partner of such Joint Venture if, as of the date of determination,
no payment on such Indebtedness or obligation has been made by such General
Partner of such Joint Venture and such arrangement would not be classified and
accounted for, in accordance with GAAP, as a liability on a consolidated balance
sheet of the Company)) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or Disqualified Stock of the
payment thereof or to protect such obligee against loss in respect thereof in
whole or in part (including by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, to maintain financial statement
conditions or otherwise); 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.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) forward foreign exchange
contracts or currency swap agreements, (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values and (iv) agreements designed to protect such Person against
fluctuations in raw material prices.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing net Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person whether or not such indebtedness
is assumed by such
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Person (provided that, for purposes of determining the amount of any
Indebtedness of the type described in this clause, if recourse with respect to
such Indebtedness is limited to such asset, the amount of such Indebtedness
shall be limited to the lesser of the fair market value of such asset or the
amount of such Indebtedness) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of the types described above of any
other Person; provided that Indebtedness shall not include the pledge by the
Company or any of its Restricted Subsidiaries of the Capital Stock of a Joint
Venture Subsidiary, Unrestricted Subsidiary or Joint Venture permitted by
Section 4.07(b)(xi) or Section 4.07(b)(xii) to secure Non-Recourse Debt of such
Unrestricted Subsidiary or Joint Venture.
The Equistar Assumed Debt shall not constitute Indebtedness of the Company
as of any date of determination if the Company has not made any principal or
interest payments on such Indebtedness after the Issue Date; provided that, the
payment by the Company of any principal or interest thereon shall be deemed to
be an incurrence of such Indebtedness on the day of such payment. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture Obligations" means (a) all principal of and interest (including,
without limitation, (i) any Liquidated Damages and (ii) any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Company, whether or not
allowed or allowable as a claim in any such proceeding) on any Note issued
pursuant to the Indenture, (b) all other amounts payable by the Company or any
Subsidiary Guarantor under the Indenture and (c) any renewals or extensions of
any of the foregoing.
"Independent Investment Banker" means a Reference Treasury Dealer appointed
by the Company.
"Initial Additional Notes" means Additional Notes issued in an offering not
registered under the Securities Act.
"Initial Notes" means the Company' 9 5/8% Senior Secured Notes, Series A,
Due 2007, issued on the Issue Date (and any Notes issued in respect thereof
pursuant to Section 3.04, 3.05, 3.06, 3.13, 3.14 or 10.08), but not including
any Exchange Notes issued in exchange therefor.
"Interest Payment Date" means, when used with respect to any Note and any
installment of interest thereon, the date specified in such Note as the fixed
date on which such installment of interest is due and payable, as set forth in
such Note.
"Investment Grade" means a rating of BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by S&P or Moody's. In the
event that the Company shall select any other Rating Agency pursuant to the
provisions of the definition thereof, the equivalent of such ratings by such
Rating Agency shall be used.
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"Investments" means, with respect to any Person, all investments by such
Person in another Person (including an Affiliate of such Person) in the form of
direct or indirect loans, advances or extensions of credit to such other Person
(including any Guarantee by such Person of the Indebtedness or Disqualified
Stock of such other Person) or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of such other Person, together with all items that are or would be
classified as investments of such investing Person on a balance sheet prepared
in accordance with GAAP; provided that (x) trade credit and accounts receivable
in the ordinary course of business, (y) commissions, loans, advances, fees and
compensation paid in the ordinary course of business to officers, directors and
employees and (z) reimbursement obligations in respect of letters of credit and
tender, bid, performance, government contract, surety and appeal bonds, in each
case solely with respect to obligations of the Company or any of its Restricted
Subsidiaries shall not be considered Investments. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in Section 4.07(a).
"Issue Date" means the date on which the Notes are originally issued.
"Joint Venture" means any joint venture between the Company or any
Restricted Subsidiary and any other Person, whether or not such joint venture is
a Subsidiary of the Company or any Restricted Subsidiary.
"Joint Venture Subsidiary" means a Subsidiary of the Company or any of its
Subsidiaries that has no assets and conducts no operations other than its
ownership of Equity Interests of a Joint Venture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest (other than, in the case of Receivables Facilities,
security interests under the Uniform Commercial Code arising solely by virtue of
the application of Article 9 thereof to sales of accounts) or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, and any lease in the nature thereof) or the assignment or
conveyance of any right to receive income therefrom.
"Liquidated Damages" means liquidated damages owed to the Holders pursuant
to a Registration Rights Agreement.
"Lyondell TDI" means Lyondell Chimie France TDI, a French limited
partnership and a wholly-owned Subsidiary of the Company.
"Major Asset Sale" means an Asset Sale designated by the Company by prior
notice to the Trustees as a Major Asset Sale, so long as in connection therewith
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(i) the Company receives Net Proceeds in an aggregate amount not less than
$1,000,000,000 (which shall be deemed Net Proceeds of such Major Asset Sale for
purposes of Section 4.09),
(ii) at the time of such Major Asset Sale and after giving effect thereto,
no Default shall exist,
(iii) the sum of the gross cash proceeds received by the Company in respect
of such Major Asset Sale plus the value of the interest of the Company in the
Subject Assets Transferee (if any) after giving effect to such Major Asset Sale
is not less than the value (as conclusively determined by the Board of Directors
of the Company) of the portion of the Subject Assets transferred by the Company
in connection with such Major Asset Sale, and
(iv) the Company directly or indirectly is the operator of the Subject
Assets in which it or a Subject Assets Transferee retains an interest. For
purposes of clause (i) of this definition (1) a transaction which produces
substantially the same economic result as a sale of a partial interest in an
asset, as might be achieved, for instance, through contractual arrangements
allocating future revenues and costs attributable to the asset, shall be deemed
an Asset Sale even though there may be no change in title to the asset or in the
ownership of the Person which has title to the asset and (2) a subsequent
related transaction with the same Acquiring Person (or an Affiliate thereof)
contemplated by the terms of the initial Major Asset Sale with such Person
shall, for purposes of determining the applicability of and compliance with this
definition, be deemed a single cumulative transaction.
"Make-Whole Price" means an amount equal to the greater of (i) 100% of the
principal amount of the Notes and (ii) as determined by an Independent
Investment Banker, the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate), plus, in each case, accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of redemption.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale or any disposition pursuant to a Sale and
Leaseback Transaction or (b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
gain or loss, together with any related provision for taxes on such
extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds (excluding any proceeds
deemed to be "cash" pursuant to Section 4.09) received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any
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cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), amounts
required to be paid to holders of minority interests in Restricted Subsidiaries
as a result of such Asset Sale, amounts required to be applied to the repayment
of Indebtedness (other than Indebtedness under the Existing Credit Facility or
Existing ARCO Chemical Debt) secured by a Lien on any asset sold in such Asset
Sale and any reserves for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP and any reserve for future
liabilities established in accordance with GAAP; provided that the reversal of
any such reserve that reduced Net Proceeds when issued shall be deemed a receipt
of Net Proceeds in the amount of such proceeds on such day.
"Non-Recourse Debt" means Indebtedness as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
(in each case, other than the stock of a Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture pledged by the Company or any of its Restricted
Subsidiaries to secure debt of such Joint Venture or Unrestricted Subsidiary) of
the Company or any of its Restricted Subsidiaries.
"Notes" means the Initial Notes, any Additional Notes and the Exchange
Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Officer" means, with respect to the Company, any Subsidiary Guarantor or
any other obligor on the Notes, the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Financial Officer, the Secretary, the
Treasurer, any Assistant Secretary or Assistant Treasurer or any Vice President
of such Person.
"Officer's Certificate" means, with respect to the Company or any other
obligor on the Notes, a certificate signed by an Officer of such Person.
"Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to the Company or the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.
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"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(ii) Notes for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent in trust for
the Holders of such Notes, provided that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee has been made;
(iii) Notes paid pursuant to Section 3.06; and
(iv) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because the Company or any
Affiliate of the Company holds the Note, provided that in determining whether
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be Outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the reasonable satisfaction of the
Trustee the pledgee's right to act with respect to such Notes and that the
pledgee is not the Company or an Affiliate of such Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Notes on behalf of the Company.
"Payment Default" means any failure to pay any scheduled installment of
interest or principal on any Indebtedness within the grace period provided for
such payment in the documentation governing such Indebtedness.
"PBGC Settlement" means the settlement agreement between the Company and
the Pension Benefit Guaranty Corporation (or any successor entity) as amended,
modified, restated or replaced from time to time.
"Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.
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"Permitted Investments" means:
(a) any Investment in the Company or in a Restricted Subsidiary of the
Company that is engaged in a Permitted Business;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Subsidiary of the Company in a
Person, if as a result of such Investment: (i) such Person becomes a Restricted
Subsidiary of the Company engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company engaged in a Permitted Business;
(d) any non-cash consideration (other than a joint venture interest
received in full or partial satisfaction of the 80% requirement in clause (ii)
of Section 4.09(a)) received as consideration in an Asset Sale that was made
pursuant to and in compliance with Section 4.09;
(e) any acquisition of assets or Equity Interests solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) Hedging Obligations entered into in the ordinary course of business
and otherwise permitted under the Indenture;
(g) Investments in an Accounts Receivable Subsidiary that, as conclusively
determined by the Board of Directors, are necessary or advisable to effect a
Receivables Facility;
(h) Investments in Unrestricted Subsidiaries and Joint Ventures in an
aggregate amount, taken together with all other Investments made in reliance on
this clause (h), not to exceed at any time outstanding $25 million (after giving
effect to any reductions in the amount of any such Investments as a result of
the repayment or other disposition thereof for cash, the amount of such
reduction not to exceed the amount of such Investments previously made pursuant
to this clause (h)); and
(i) any Investment received by the Company or any Restricted Subsidiary as
consideration for the settlement of any litigation, arbitration or claim in
bankruptcy or in partial or full satisfaction of accounts receivable owned by a
financially troubled Person to the extent reasonably necessary in order to
prevent or limit any loss by the Company or any of its Restricted Subsidiaries
in connection with such accounts receivable.
"Permitted Liens" means:
(i) Liens in favor of the Company or any Subsidiary Guarantor;
(ii) Liens securing the Notes and the Subsidiary Guarantees;
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(iii) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or any Restricted Subsidiary of the
Company or becomes a Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger, consolidation or
acquisition and do not extend to any assets of the Company or its Restricted
Subsidiaries other than those of the Person merged into or consolidated with the
Company or that becomes a Restricted Subsidiary of the Company;
(iv) Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such acquisition;
(v) Liens (including the interest of a lessor under a capital lease) on
any asset existing at the time of acquisition thereof or incurred within 180
days of the time of acquisition or completion of construction thereof, whichever
is later, to secure or provide for the payment of all or any part of the
purchase price (or construction price) thereof;
(vi) Liens incurred or assumed in connection with the issuance of revenue
bonds the interest on which is exempt from federal income taxation pursuant to
Section 103(b) of the Internal Revenue Code;
(vii) Liens imposed by law, such as laborers' or other employees',
carriers', warehousemens', mechanics', materialmen's and vendors' Liens and
Liens imposed by law on pipelines or pipeline facilities;
(viii) Liens arising by reason of deposits necessary to qualify the
Company or any Restricted Subsidiary to conduct business, maintain self
insurance or comply with any law and Liens securing the PBGC Settlement;
(ix) Liens to secure the performance of statutory obligations, tender,
bid, performance, government contract, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course of business;
(x) Liens existing on the Issue Date other than Liens securing
Indebtedness under the Existing Credit Facility or the Existing ARCO Chemical
Debt;
(xi) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings, prejudgment Liens that are being contested in good faith by
appropriate proceedings and Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary at the time shall be prosecuting an appeal or proceedings
for review and with respect to which it shall have secured a stay of execution
pending such appeal or proceedings for review; provided that in each case any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(xii) easements, rights-of-ways, restrictions, irregularities of title
and other similar charges or encumbrances, not interfering in any material
respect with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
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(xiii) Liens securing reimbursement obligations with respect to
commercial letters of credit obtained in the ordinary course of business which
encumber documents and other property or assets relating to such letters of
credit and products and proceeds thereof;
(xiv) Liens securing assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets;
(xv) licenses or leases by the Company or any of its Restricted
Subsidiaries as licensor or lessor in the ordinary course of business and
otherwise permitted by the Indenture for patents, copyrights, trademarks,
tradenames and other intellectual property;
(xvi) leases or subleases by the Company or any of its Restricted
Subsidiaries as lessor or sublessor in the ordinary course of business and
otherwise permitted by the Indenture;
(xvii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xviii) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the
Company or any of its Restricted Subsidiaries (which defeasance is otherwise
permitted under the Indenture) having an aggregate principal amount at any one
time outstanding not to exceed $25 million or (B) defeasing Indebtedness ranking
pari passu with the Notes; provided that the Notes are defeased concurrently
with such Indebtedness;
(xix) from and after the first date when the Notes are rated Investment
Grade, Liens on any asset of the Company other than any of the Company's or any
of its Restricted Subsidiary's manufacturing plants or Liens on any Equity
Interests of any Restricted Subsidiary that owns a manufacturing plant;
(xx) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture (or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture) organized (or designated as an Unrestricted Subsidiary
and holding no other assets and conducting no other operations) to construct,
own and/or operate a propylene oxide plant in the European Union to secure Non-
Recourse Debt of such Joint Venture or Unrestricted Subsidiary;
(xxi) the pledge of Equity Interests of an Unrestricted Subsidiary or
Joint Venture (or of a Joint Venture Subsidiary that has no assets and conducts
no operations other than the holding, directly or indirectly, of Equity
Interests of such Joint Venture) organized (or designated as an Unrestricted
Subsidiary and holding no other assets and conducting no other operations) to
participate in the improvement of the Rhodia TDI Plant to secure Non-Recourse
Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly-
owned subsidiary of Rhodia;
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(xxii) Liens on equipment of the Company or any Restricted Subsidiary
arising as a result of a sale and leaseback with respect to such equipment;
provided that the proceeds from such sale and leaseback are applied pursuant to
Section 4.09;
(xxiii) Asset Sale Liens;
(xxiv) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar agreement
establishing a trust or escrow arrangement, and Liens pursuant to merger
agreements, stock purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of property or assets of
the Company or any Restricted Subsidiary, to the extent such dispositions are
permitted hereunder;
(xxv) netting provisions and setoff rights in favor of counterparties
to agreements creating Hedging Obligations;
(xxvi) other Liens on assets of the Company or any Restricted Subsidiary
of the Company securing Indebtedness that is permitted by the terms of the
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $100 million; and
(xxvii) Liens to secure a Permitted Refinancing incurred to refinance
Indebtedness that was secured by a Lien permitted under the Indenture and that
was incurred in accordance with the provisions of the Indenture; provided that
such Liens do not extend to or cover any property or assets of the Company or
any Restricted Subsidiary other than assets or property securing the
Indebtedness so refinanced.
"Permitted Refinancing" means any Indebtedness of the Company or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided that:
(i) the principal amount (or liquidation preference in the case of
Preferred Stock) of such Permitted Refinancing (or if such Permitted Refinancing
is issued at a discount, the initial issuance price of such Permitted
Refinancing) does not exceed the principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of any premiums paid and reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing or, in the case of Preferred Stock of a
Finance Subsidiary, the Indebtedness issued to such Finance Subsidiary, has a
Stated Maturity date later than the Stated Maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated by its terms in right of payment
to the Notes or the Subsidiary Guarantees, such Permitted Refinancing, or, in
the case of Preferred Stock, the Indebtedness issued to such Finance Subsidiary,
has a Stated Maturity date later than the
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Stated Maturity date of, and is subordinated in right of payment to, the Notes
on subordination terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(iv) such Indebtedness is incurred by the Company or a Subsidiary
Guarantor (or such Preferred Stock is issued by a Finance Subsidiary) if the
Company or a Subsidiary Guarantor is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(v) such Indebtedness is incurred by the Company or a Restricted
Subsidiary (or such Preferred Stock is issued by a Finance Subsidiary) if a
Restricted Subsidiary that is not a Subsidiary Guarantor is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Place of Payment" means a city or any political subdivision thereof
referred to in Article 3 and initially designated under Section 4.02.
"Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference stock of such Person which is
outstanding or issued on or after the date of the Indenture.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"QIB", or "Qualified Institutional Buyer" means a "qualified institutional
buyer," as the term is defined in Rule 144A under the Securities Act.
"Qualified Equity Interests" shall mean all Equity Interests of a Person
other than Disqualified Stock of such Person.
"Rating Agency" means (i) S&P or (ii) Moody's or (iii) if neither S&P nor
Moody's shall exist, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which shall be
substituted for S&P or Moody's or both, as the case may be.
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"Receivables Facility" means one or more receivables financing facilities
or arrangements, as amended from time to time, pursuant to which the Company or
any of its Restricted Subsidiaries sells (including a sale in exchange for a
promissory note of or Equity Interest in an Accounts Receivable Subsidiary) its
accounts receivable to an Accounts Receivable Subsidiary.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not the Company or a
Restricted Subsidiary in connection with, any Receivables Facility.
"Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed or such redemption or purchase by or pursuant to
this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be redeemed or
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.
"Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer") selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Treasury Reference Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
"Registration Rights Agreement" means (i) the Registration Rights Agreement
dated as of May 17, 1999 among the Company, the Subsidiary Guarantors party
thereto and Donaldson, Lufkin & Jenrette Securities Corporation, J.P. Morgan
Securities Inc., Salomon Smith Barney Inc., Chase Securities Inc. and
Nationsbanc Montgomery Securities LLC, as Initial Purchasers, as such agreement
may be amended from time to time, and (ii) with respect to any Initial
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended from time to
time, relating to rights given by the Company to the purchasers of Initial
Additional Notes to register or exchange such Initial Additional Notes under the
Securities Act.
"Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the date specified for that purpose in Section 3.01.
"Resale Restriction Termination Date" means, with respect to any Note, the
date that is two years (or such other period as may hereafter be provided under
Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original
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issue date in respect of such Note and the last date on which the Company or any
Affiliate of the Company was the owner of such Note (or any Predecessor Note
thereto).
"Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, references to a "Restricted Subsidiary" refer to a Restricted
Subsidiary of the Company.
"Rhodia" means Rhodia S.A., a French company and the successor in interest
to Rhone-Poulenc Chemie S.A. under the TDI Agreements.
"Rhodia TDI Plant" means the manufacturing facilities for the production of
toluene diisocyanate, currently owned by Rhodia and located at Pont-de-Claix,
France.
"Sale and Leaseback Transaction" means, with respect to any Person, any
arrangement with a lender or investor providing for the leasing by such Person
of any property or asset of such Person which has been or is being sold or
transferred by such Person to such lender or investor if such arrangement is
accounted for as a capitalized lease by such Person under GAAP.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means (i) the Security Agreement dated the Issue Date
between the Company and the Collateral Agent, each of the Pledge Agreements
dated as of July 28, 1998 between the Company and the Collateral Agent, the
Security Agreement dated as of July 28, 1998 among Lyondell Petrochemical G.P.
Inc., Lyondell Petrochemical L.P. Inc., and the Collateral Agent, the Security
Agreement dated as of July 28, 1998 among Lyondell Refining Company, Lyondell
Refining LP, LLC and the Collateral Agent, the Security Agreement dated as of
July 28, 1998 among Lyondell General Methanol Company and Lyondell Limited
Methanol Company and the Collateral Agent, the Pledge Agreement dated as of
December 31, 1998 between the Company and the Collateral Agent relating to the
pledge of shares of capital stock of Lyondell Refining LP, LLC, the Security
Agreement dated as of the Issue Date between Lyondell Chemical Worldwide, Inc.
and the Collateral Agent, the Pledge Agreement dated as of the Issue Date
between Lyondell Chemical Worldwide, Inc. and the Collateral Agent, the Security
Agreement dated as of December 31, 1998 between Lyondell Refining LP, LLC and
the
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Collateral Agent, the Deed of Trust dated as of the Issue Date relating to
Bayport, Texas facility from Lyondell Chemical Worldwide, Inc. to the trustee
named therein for the benefit of the Collateral Agent, the Deed of Trust dated
the Issue Date relating to Channelview, Texas facility from Lyondell Chemical
Worldwide, Inc. to the trustee named therein for the benefit of the Collateral
Agent, the Mortgage dated the Issue Date relating to Lake Charles, Louisiana
facility from Lyondell Chemical Worldwide, Inc. to the Collateral Agent and (ii)
any other pledge agreements, security agreements, mortgages, deeds of trust or
other agreements or instruments between the Company and/or any of its Restricted
Subsidiaries and the Collateral Agent granting Liens on any asset of the Company
or any of its Restricted Subsidiaries to secure the Existing Credit Facility
Obligations, in each case as amended, modified, restated or supplemented from
time to time.
"Senior Indebtedness" has the meaning assigned to such term in the Senior
Subordinated Notes Indenture.
"Senior Secured Notes" means the Company's 9 5/8% Senior Secured Notes,
Series A, due 2007 and the Company's 9 7/8% Senior Secured Notes, Series B, due
2007.
"Senior Secured Notes Indentures" means the indentures relating to the
Company's Senior Secured Notes as in effect on the Issue Date.
"Senior Subordinated Notes" means the Company's 10 7/8% Senior Subordinated
Notes due 2009.
"Senior Subordinated Notes Indenture" means the indenture relating to the
Company's Senior Subordinated Notes as in effect on the Issue Date.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
"Significant Asset Sale" means an Asset Sale of (x) any of the Company's or
its Restricted Subsidiaries' plants that (a) has a fair market value in excess
of $50 million or (b) for Net Proceeds in excess of $50 million (a "Significant
Asset") or (y) a controlling interest in any Restricted Subsidiary that owns a
Significant Asset (other than, in each case, an involuntary disposition, to the
extent that the Existing Credit Facility (but not any refinancing thereof other
than a credit facility with commercial banks and other lenders) permits the
proceeds thereof to be reinvested prior to any mandatory prepayment of amounts
outstanding thereunder).
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the Issue
Date.
"Specified Joint Ventures" means (i) Equistar Chemicals, LP, (ii) LYONDELL-
CITGO Refining LP and (iii) Lyondell Methanol Company, L.P.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
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"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subject Assets" means, with respect to any Major Asset Sale, the assets
which are the subject of such Major Asset Sale.
"Subject Assets Transferee" means any Restricted Subsidiary or Joint
Venture which becomes the owner of Subject Assets in connection with a Major
Asset Sale.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof) or (c) that is a
Specified Joint Venture and as to which (i) a general partner of which is such
Person or a Subsidiary of such Person, (ii) such Person owns, directly or
indirectly, 50% or more of the partnership interests of such Specified Joint
Venture and (iii) the Board of Directors of such Person has designated such
Specified Joint Venture to be a "Subsidiary" (which designation shall be
irrevocable for so long as such Specified Joint Venture satisfies the foregoing
requirements). As of the Issue Date, none of the Specified Joint Ventures are
Subsidiaries of the Company. Unless the context otherwise requires references
to a "Subsidiary" refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company' obligations with respect to the Notes.
"Subsidiary Guarantor" means (i) Lyondell Chemical Worldwide, Inc. and
Lyondell Chemical Nederland, Ltd. and (ii) each Restricted Subsidiary that
executes a supplemental indenture, in the form of Exhibit B hereto, providing
for the Guarantee of the payment of the Notes, in each case until such time as
such Subsidiary is released from its Subsidiary Guarantee as permitted by this
Indenture.
"TDI Agreements" means (i) the Share Purchase Agreement dated as of January
23, 1995 between ARCO Chemical Europe Inc. and Rhone-Poulenc Chemie S.A., as
such agreement may be amended, supplemented or otherwise modified from time to
time, (ii) the Processing Agreement dated as of January 23, 1995 between ARCO
Chemical Chemie TDI and Rhone-Poulenc Chemie S.A., as such agreement may be
amended, supplemented or otherwise modified from time to time, and (iii) the TDI
License.
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"TDI Assets" means (i) all rights of ARCO Chemical Europe Inc., ARCO
Chemical Chemie TDI, ARCO Chemical Technology LP and their respective successors
under the TDI Agreements and (ii) all of Lyondell TDI's customer lists relating
to the Rhodia TDI Plant.
"TDI License" means the TDI Technology Agreement dated as of January 23,
1995 between ARCO Chemical Technology LP and Rhone-Poulenc Chemie S.A., as such
agreement may be amended, supplemented or otherwise modified from time to time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections 77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.04.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board
of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interest or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided that
(a) any Guarantee (other than as a co-obligor of the Equistar Assumed Debt
so long as the Equistar Assumed Debt is not considered Indebtedness of the
Company pursuant to the definition thereof) by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation,
(b) either (i) the Subsidiary to be so designated has total assets of
$1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.07,
(c) if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under Section 4.06
and Section 4.07 and
(d) in the case of any Subsidiary that is a Joint Venture as of the date
of its designation as an Unrestricted Subsidiary, such Subsidiary has an
aggregate of 15% or more of its outstanding Capital Stock or other voting
interests (other than directors' qualifying shares) held by another Person other
than the Company or any Restricted Subsidiary or any Affiliate of the Company.
Any such designation by the Board of Directors of the Company pursuant to
clause (i) above shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate
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certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.06 and Section 4.07.
If (i) at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements of clause (d) (because the Company has acquired more than
85% of the outstanding Capital Stock or other voting interests of any Subsidiary
that was a Joint Venture on the date of its designation as an Unrestricted
Subsidiary), or (ii) at any time the Company or any Restricted Subsidiary
Guarantees any Indebtedness of such Unrestricted Subsidiary or makes any other
Investment in such Unrestricted Subsidiary and such incurrence of Indebtedness
or Investment would not be permitted under Section 4.06 and Section 4.07 it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.06,
the Company shall be in default of such covenant). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.06 and (ii) no
Default or Event of Default would be in existence following such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Equity Interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
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Section 1.02. Other Definitions.
TERM DEFINED
IN SECTION
Acceleration Notice 6.02
Act 1.08
Affiliate Transaction 4.10
Agent Members 3.13
Asset Sale Offer 4.09
Authentication Order 3.03
Change of Control Offer 4.14
Change of Control Payment 4.14
Change of Control Payment Date 4.14
Covenant Defeasance 12.03
Defaulted Interest 3.07
DTC 2.03
Event of Default 6.01
Excess Proceeds 4.09
Expiration Date 1.08
Global Notes 2.01
Guaranteed Indebtedness 4.13
incur 4.06
Legal Defeasance 12.02
Physical Notes 2.01
Place of Payment 3.01
Plan Participants 4.07
Private Placement Legend 2.03
Redemption Amount 10.01
redemption date 13.01
Regular Record Date 3.01
Restricted Payment 4.07
Successor Company 5.01
Subordinated Debt 4.07
U.S. Global Notes 2.01
U.S. Physical Notes 2.01
Section 1.03. Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Indenture have the meanings assigned to them
in this Indenture;
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP and, unless expressly provided
otherwise, all determinations and computations made pursuant to any provision
hereof shall be made in accordance with GAAP; provided that references to any
Person and its Restricted Subsidiaries on a consolidated basis, and any
calculations of amounts with respect to any Person and its Restricted
Subsidiaries on a consolidated basis, shall refer to such Person
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and all its Restricted Subsidiaries, whether or not such Restricted Subsidiaries
would be accounted for as consolidated subsidiaries on such Person's financial
statements prepared in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful currency
of the United States of America;
(f) the words "include," "included" and "including" as used herein shall
be deemed in each case to be followed by the phrase "without limitation," if not
expressly followed by such phrase or the phrase "but not limited to";
(g) words in the singular include the plural, and words in the plural
include the singular; and
(h) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Section 1.04. Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any TIA reference to another statute or defined
by SEC rule under the TIA, have the meanings so assigned to them therein. The
following TIA terms have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or Noteholders.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any Subsidiary
Guarantor and any other obligor on the indenture securities.
Section 1.05. Conflict with TIA. If any provision hereof limits, qualifies
or conflicts with a provision of the TIA that is required under the TIA to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed (a) to
apply to this Indenture as so modified or (b) to be excluded, as the case may
be.
Section 1.06. Compliance Certificates and Opinions. Upon any application
or request by the Company or by any other obligor upon the Notes to the Trustee
to take any
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action under any provision of this Indenture, the Company or such other obligor
upon the Notes, as the case may be, shall furnish to the Trustee such
certificates and opinions as may be required under the TIA. Each such
certificate or opinion shall be given in the form of one or more Officer's
Certificates, if to be given by an Officer, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the TIA and any
other requirements set forth in this Indenture. Notwithstanding the foregoing,
in the case of any such request or application as to which the furnishing of any
Officer's Certificate or Opinion of Counsel is specifically required by any
provision of this Indenture relating to such particular request or application,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 4.05) shall include:
(a) a statement that the individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of such individual, he or she 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
(d) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
Section 1.07. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers to the effect that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.08. Acts of Noteholders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee, the Company and any other obligor upon the
Notes, if made in the manner provided in this Section 1.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind the Holder of every Note
issued upon the transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee, the Company or
any other obligor on the Notes in reliance thereon, whether or not notation of
such action is made upon such Note.
(e) (i) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in Section
1.08(e)(ii). If any record date is set pursuant to this paragraph, the Holders
of Outstanding Notes on such record date (or their duly designated proxies), and
no other Holders, shall be entitled to take the relevant action, whether or not
such Persons remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes on such record date. Nothing in this
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paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder in the manner set forth in Section 1.10.
(ii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to join in the giving or
making of (w) any Notice of Default, (x) any declaration of acceleration
referred to in Section 6.02, (y) any request to institute proceedings referred
to in Section 6.06(b) or (z) any direction referred to in Section 6.05, in each
case with respect to Notes. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the expense of the Company, shall cause notice of such record date,
the proposed action by Holders and the applicable Expiration Date to be given to
the Company in writing and to each Holder in the manner set forth in Section
1.10.
(iii) With respect to any record date set pursuant to this Section 1.08,
the party hereto that sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Company or the
Trustee, whichever such party is not setting a record date pursuant to this
Section 1.08(e) in writing, and to each Holder in the manner set forth in
Section 1.10, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(iv) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so with regard to
all or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
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Section 1.09. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company or any other obligor upon
the Notes shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at the Corporate Trust
Office (telephone: (212) 815-6286; facsimile: (212) 815-5915), or at any other
address furnished in writing to the Company by the Trustee, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder if in writing and delivered in person or mailed, first-
class postage prepaid, to the Company at One Houston Center, Suite 700, 1221
McKinney, Houston, Texas 77010, Attention: General Counsel (facsimile: (713)
309-2143), with copies to Baker & Botts LLP at 910 Louisiana, Houston, Texas
77002, Attention: Steve Massad, Esq. (facsimile: (713) 229-1522), or at any
other address previously furnished in writing to the Trustee by the Company.
Section 1.10. Notices to Holders; Waivers. Where this Indenture provides
for notice to Holders of any event, such notice shall be deemed to have been
given upon the mailing by first class mail, postage prepaid, of such notices to
Holders at their registered addresses as recorded in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed herein
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.
Section 1.11. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.12. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its respective successors and assigns,
whether so expressed or not.
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Section 1.13. Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.14. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.15. Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. TO THE EXTENT PERMITTED BY LAW, THE TRUSTEE, THE COMPANY,
THE SUBSIDIARY GUARANTORS, ANY OTHER OBLIGORS IN RESPECT OF THE NOTES AND (BY
THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 1.16. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest and Liquidated Damages, if any, or principal and premium (if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders. No director, officer, employee, incorporator,
shareholder or other holder of Equity Interests of the Company or the Subsidiary
Guarantors, as such, shall have any liability for any obligations of the Company
or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
Section 1.18. Exhibits and Schedules. All exhibits and schedules attached
hereto are by this reference made a part hereof with the same effect as if
herein set forth in full.
Section 1.19. 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.
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ARTICLE 2
Note Forms
Section 2.01. Forms Generally. The Notes and the Trustee's certificate of
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in Exhibit A annexed hereto and in this Article 2. The Notes may
have such appropriate insertions, omissions, substitutions, notations, legends,
endorsements, identifications and other variations as are required or permitted
by law, stock exchange rule or depository rule or usage, the certificate of
incorporation, bylaws or other similar governing instruments of the Company,
agreements to which the Company is subject, if any, or other customary usage, or
as may consistently herewith be determined by the Officers of the Company
executing such Notes, as evidenced by such execution (provided always that any
such notation, legend, endorsement, identification or variation is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication.
Initial Notes and any Additional Notes offered and sold in reliance on Rule
144A under the Securities Act shall be issued initially in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A and
shall contain the legends set forth in Section 2.03(a) and (b) (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as provided in Sections 3.13 and
3.14.
Initial Notes and any Additional Notes issued pursuant to Section 3.05 and
Section 3.13 in exchange for or upon transfer of beneficial interests in the
U.S. Global Note shall be in the form of permanent certificated Notes in
substantially the form set forth in Exhibit A containing the Private Placement
Legend as set forth in Section 2.03 (the "U.S. Physical Notes"), as hereinafter
provided.
The U.S. Physical Notes, together with any other certificated notes in
registered form, are sometimes collectively referred to as the "Physical
Notes." The U.S. Global Notes, together with any other global notes in
registered form, are sometimes collectively referred to as the "Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 3.13, shall be in the form of one or more
Global Notes.
Section 2.02. Form of Trustee' Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: __________ By: __________________________
Authorized Signatory
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If an appointment of an Authenticating Agent is made pursuant to Section
7.15, the Notes may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By _____________________________
As Authenticating Agent
By _____________________________
Authorized Signatory
Dated:
Section 2.03. Restrictive Legends. (a) Except as set forth in Section
3.14(g), unless and until (i) an Initial Note or any Additional Note is sold
pursuant to an effective registration statement, whether pursuant to the
Registration Rights Agreement or otherwise or (ii) an Initial Note or any
Additional Note is exchanged for an Exchange Note in an Exchange Offer pursuant
to an effective Exchange Offer Registration Statement pursuant to the
Registration Rights Agreement, each U.S. Global Note and U.S. Physical Note
shall bear the following legend set forth below (the "Private Placement Legend")
on the face thereof:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As defined in
Rule 144A under the Securities Act) (A "QIB")
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL,
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CERTIFICATION AND/OR OTHER INFORMATION ACCEPTABLE TO THE COMPANY AND THE
TRUSTEE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
(b) Each Global Note, whether or not an Initial Note or Additional Note,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.13 AND 3.14 OF THE INDENTURE.
ARTICLE 3
The Notes
Section 3.01. Title and Terms. The aggregate principal amount of Notes that
may be authenticated and delivered and Outstanding under this Indenture is
initially limited to $900,000,000, but may be increased, subject to compliance
with the covenants contained in Article 4 below and the conditions set forth in
Section 3.03, and except as may be limited by applicable law; provided that the
aggregate principal amount of Senior Secured Notes outstanding at any time shall
not exceed $1.9 billion. The Initial Notes will
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be issued in an aggregate principal amount of $900,000,000. All the Original
Notes shall vote and consent together on all matters as one class, and none of
the Original Notes will have the right to vote or consent as a class separate
from one another on any matter. Subject to the covenants contained in Article 4
below, the Company may issue Additional Notes hereunder. Additional Notes
(including any Exchange Notes issued in exchange therefor) shall vote (or
consent) as a class with the other Notes and otherwise be treated as Notes for
all purposes of this Indenture.
The Notes shall be known and designated as the "9 5/8% Senior Secured
Notes, Series A, Due 2007" of the Company. The final Stated Maturity of the
Notes shall be May 1, 2007. Interest on the Outstanding principal amount of
Notes will accrue, subject to Section 3.11, at the rate of 9 5/8% per annum and
will be payable semiannually in arrears on May 1 and November 1 in each year,
commencing on November 1, 1999, to Holders of record at the close of business on
the immediately preceding April 15, and October 15, respectively (each such
April 15 and October 15 a "Regular Record Date"). Interest on the Original Notes
will accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid, from May 17, 1999, and interest
on any Additional Notes (and Exchange Notes issued in exchange therefor) will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid on such Additional Notes, from the
date of issuance of such Additional Notes; provided that if any Note is
surrendered for exchange on or after a record date for an Interest Payment Date
that will occur on or after the date of such exchange, interest on the Note
received in exchange thereof will accrue from the date of such Interest Payment
Date. The Company will pay interest on overdue principal and, to the extent
lawful, on overdue installments of interest and Liquidated Damages, if any, at a
rate of 1% per annum in excess of the interest rate referred to above.
The principal of, and premium, if any, and interest and Liquidated Damages,
if any, on the Notes shall be payable at the Corporate Trust Office or at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (each, a "Place of Payment") in the manner
provided in Section 4.01(b); provided, however, that, under the circumstances
set forth in Section 4.01(b), payment of interest and Liquidated Damages on a
Note may be made by wire transfer of immediately available funds to the account
specified by the Holder of a Global Note or by check mailed to the address of
the Person entitled thereto as such address shall appear in the Register.
Section 3.02. Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 3.03. Execution, Authentication and Delivery and Dating. The Notes
shall be executed on behalf of the Company by an Officer of such Company. The
signature of such Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of an individual who was at
any time a proper Officer of the Company shall bind the Company, notwithstanding
that such individual has ceased to hold such office prior to the authentication
and delivery of such Notes or did not hold such office at the date of such
Notes.
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At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes for original issue in the aggregate principal amount not to exceed
$900,000,000 and (ii) Additional Notes from time to time for original issue in
aggregate principal amounts specified by the Company and (iii) Exchange Notes
from time to time for issue in exchange for a like principal amount of Initial
Notes or Initial Additional Notes, in each case specified in clauses (i) through
(iii) above, upon a written order of the Company in the form of an Officer's
Certificate (an "Authentication Order"), and in the case of clause (ii), upon
receipt by the Trustee of an Opinion of Counsel confirming that the Holders of
the Outstanding Notes will be subject to federal income tax in the same amounts,
in the same manner and at the same times as would have been the case if such
Additional Notes were not issued. Such Officer's Certificates shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes, that, in the case of Additional Notes, (x) the issuance of such
Notes does not contravene any provision of Article 4 of this Indenture and (y)
after giving effect to such Issuance of Additional Notes, the aggregate
principal amount of Senior Secured Notes outstanding does not exceed $1.9
billion, whether the Notes are to be issued as one or more Global Notes or
Physical Notes, the name or names of the Initial Holder or Holders and such
other information as the Company may include or the Trustee may reasonably
request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 3.04. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and upon receipt of an Authentication Order
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company consider appropriate for temporary Notes. If temporary Notes are issued,
the Company will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Company in a Place of Payment, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and upon receipt of an Authentication Order the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes of the same series and tenor.
Section 3.05. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Register") in
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which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The
Trustee is hereby appointed "Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for transfer of any Note at the office or agency of the
Company in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes or
Initial Additional Notes for Exchange Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC and the
Trustee shall have received an Officer's Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
an exchange offer thereunder has been consummated. The Initial Notes or
Additional Notes to be exchanged for the Exchange Notes shall be canceled by the
Trustee.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes under this
Section 3.05.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes. If (a) any
mutilated Note is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (b) there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
an Authentication Order the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note
of like tenor and principal amount, bearing a number not contemporaneously
Outstanding.
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In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 3.06, 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.
Every new Note issued pursuant to this Section 3.06 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest Rights Preserved. Interest and
Liquidated Damages on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest and Liquidated Damages
specified in Section 3.01.
Any interest and Liquidated Damages on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (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, as
provided in 3.07(a) or 3.07(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes) 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 Note 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 reasonably 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 provided in this Section 3.07(a). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not 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,
the amount thereof and the Special Record Date and payment date therefor to be
mailed, first class postage prepaid, to each Holder at such Holder's address as
it appears in the
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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 so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following 3.07(b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause (b), such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.07, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest (including
any Liquidated Damages) accrued and unpaid, and to accrue, that were carried by
such other Note.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Section 3.07) interest
and Liquidated Damages, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Subsidiary Guarantors, the Trustee or any agent of the Company, the Subsidiary
Guarantors or the Trustee shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and, if not already canceled,
shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 3.09, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be disposed of in accordance with the Trustee's
customary procedures.
Section 3.10. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. Payment of Liquidated Damages. (a) Under certain
circumstances the Company will be obligated to pay certain Liquidated Damages to
the Holders of certain Initial Notes, as more particularly set forth in such
Initial Notes.
(b) Under certain circumstances the Company may be obligated to pay
certain Liquidated Damages to the Holders of certain Initial Additional Notes,
as may be more particularly set forth in such Initial Additional Notes.
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Section 3.12. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" or "CINS" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use such "CUSIP" or "CINS" numbers in
addition to serial numbers in notices of redemption, repurchase or other notices
to Holders as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such "CUSIP" or "CINS"
numbers either as printed on the Notes or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP" or
"CINS" numbers.
Section 3.13. Book-entry Provisions for Global Notes.
(a) Each Global Note initially shall (i) be registered in the name of the
Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) to the
extent relevant thereto, bear legends as set forth in Section 2.03. None of the
Company or the Subsidiary Guarantors, nor any of their agents shall have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of beneficial ownership interests of, a Global Note, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the Company, the Subsidiary Guarantors
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or 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 Note. The registered Holder
of a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.14. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) upon request of an Agent
Member (for itself or on behalf of a beneficial holder) by written notice given
to the Trustee by or on behalf of the Depositary in accordance with customary
procedures of the Depositary and (ii) Physical Notes shall be transferred to
beneficial owners in exchange for their beneficial interests in the Global Notes
in the event that (A) the Depositary (1) notifies the Company that it is
unwilling or unable to continue as Depositary for the applicable Global Note and
a successor depositary is not appointed by the Company within 90 days or (2)
the Depositary ceases to be a "Clearing Agency" registered under the Exchange
Act , (B) the Company, at its option,
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notifies the Trustee in writing that it elects to cause the issuance of Physical
Notes under this Indenture or (C) there shall have occurred and be continuing a
Default or Event of Default. In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Note to beneficial owners for
Physical Notes pursuant to paragraph (b) of this Section 3.13, the Registrar
shall record on its books and records (and make a notation on the Global Note
of) the date and a decrease in the principal amount of such Global Note in an
amount equal to the beneficial interest in the Global Note being transferred,
and the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Physical Notes of like tenor and principal amount of authorized
denominations. In connection with a transfer of an entire Global Note to
beneficial owners pursuant to clause (ii) of this paragraph (b), the applicable
Global Note 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 applicable Global Note, an equal aggregate principal
amount at maturity of Physical Notes of authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) The Company, the Subsidiary Guarantors, any other obligor upon the
Notes or the Trustee, in the discretion of any of them, may treat as the Act of
a Holder any instrument or writing of any Person that is identified by the
Depositary as the owner of a beneficial interest in the Global Note, provided
that the fact and date of the execution of such instrument or writing is proved
in accordance with Section 1.08(b).
(e) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.14, bear the Private Placement Legend.
Section 3.14. Transfer Provisions. Unless and until (i) an Initial Note or
any Initial Additional Note is sold pursuant to an effective registration
statement, whether pursuant to the Registration Rights Agreement or otherwise,
or (ii) an Initial Note or any Initial Additional Note is exchanged for an
Exchange Note in the Exchange Offer pursuant to an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) General. The provisions of this Section 3.14 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note.
(b) Transfers to QIBs. With respect to the registration of any proposed
transfer of a Note that is a Restricted Security to a QIB, the Registrar shall
register such transfer if it complies with all other applicable requirements of
this Indenture (including Section 3.05 and Section 3.13) and,
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(i) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has otherwise
certified to the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of such Note stating, or has
otherwise certified to the Company and the Registrar in writing, that it is
purchasing such Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is or is acting through an Agent Member,
and the Note to be transferred consists of (A) a Physical Note that after
transfer is to be evidenced by an interest in a Global Note or (B) a beneficial
interest in a Global Note that after the transfer is to be evidenced by a
Physical Note, upon receipt by the Registrar of written instructions given in
accordance with the Depositary's and the Registrar's procedures,
(I) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical Note or
such beneficial interest in such transferor Global Note to be transferred, and
(II) the Trustee shall (x) cancel the Physical Note so transferred or (y)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be.
(c) Transfers pursuant to Rule 144 and transfer to Lyondell. With respect
to the registration of any proposed transfer of a Note that is a Restricted
Security (i) pursuant to the exemption from registration under the Securities
Act provided by Rule 144 thereunder or (ii to the Company, the Register shall
register such transfer if it complies with all other requirements of this
Indenture (including Section 3.05 and Section 3.13) and,
(A) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has otherwise
certified to the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144 or that such sale has been
made to the Company; and
(B) if the proposed transferee is not the Company and is or is acting
through an Agent Member, and the Note to be transferred consists of (1) a
Physical Note that after transfer is to be evidenced by an interest in a Global
Note or (2) a beneficial interest in a Global Note that after the transfer is to
be
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evidenced by a Physical Note, upon receipt by the Registrar of written
instructions given in accordance with the Depositary's and the Registrar's
procedures,
(I) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical Note or
such beneficial interest in such transferor Global Note to be transferred, and
(II) the Trustee shall (x) cancel the Physical Note so transferred or (y)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be; or
(C) if the proposed transferee is the Company,
(I) the Registrar shall deliver Physical Notes in an amount equal to the
principal amount of the Physical Note or such beneficial interest in such
transferor Global Note to be transferred, and (II) the Trustee shall (x) cancel
the Physical Note so transferred or (y) reflect on its books and records (and
make a notation on the relevant Global Note of) the date and a decrease in the
principal amount of such transferor Global Note, as the case may be.
The Company and the Trustee may require additional certifications or other
information to confirm that any proposed transfer is being made pursuant to Rule
144 under the Securities Act.
(d) Other Transfers. The Registrar shall effect and register, upon receipt
of a written request from the Company to do so, a transfer not otherwise
permitted by this Section 3.14, such registration to be done in accordance with
the otherwise applicable provisions of this Section 3.14, upon the furnishing by
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Company and the Trustee) to the
effect that, and such other certifications or information as the Company may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
A Note that is a Restricted Security may not be transferred other than as
provided in this Section 3.14. A beneficial interest in a Global Note that is a
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 3.14.
(e) Limitation on Issuance of Physical Notes. No Physical Note shall be
exchanged for a beneficial interest in any Global Note, except in accordance
with Section 3.13 and this Section 3.14.
(f) Execution, Authentication and Delivery of Physical Notes. In any case
in which the Registrar is required to deliver a Physical Note to a transferee or
transferor, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, such Physical Note.
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(g) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend, unless (i) the
requested transfer is after the relevant Resale Restriction Termination Date
with respect to such Notes, (ii) upon written request of the Company after there
is delivered to the Registrar an opinion of counsel (which opinion and counsel
are satisfactory to the Company and the Trustee) to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act, or (iii) such
Notes are sold or exchanged pursuant to an effective registration statement
under the Securities Act.
(h) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.13 or this Section 3.14 (including
all Notes received for transfer pursuant to this Section 3.14). The Company
shall have the right to require the Registrar to deliver to the Company, at the
Company' expense, copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
In connection with any transfer of any Note, the Trustee, the Registrar,
the Company and the Subsidiary Guarantors shall be entitled to receive, shall be
under no duty to inquire into, may conclusively presume the correctness of, and
shall be fully protected in relying upon the certificates, opinions and other
information referred to herein (or in the forms provided herein, attached hereto
or to the Notes, or otherwise) received from any Holder and any transferee of
any Note regarding the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such Note and any other
facts and circumstances related to such transfer.
(i) Certain Additional Terms Applicable to Physical Notes. Any transferee
entitled to receive a Physical Note may request that the principal amount
thereof be evidenced by one or more Physical Notes in any authorized
denomination or denominations and the Registrar shall comply with such request
if all other transfer restrictions are satisfied.
ARTICLE 4
Covenants
Section 4.01. Payment of Principal, Premium and Interest. (a) The Company
will duly and punctually pay the principal of (and premium, if any) and interest
and Liquidated Damages, if any, on the Notes in accordance with the terms of the
Notes and this Indenture. An installment of principal (and premium, if any) or
interest and Liquidated Damages shall be considered paid on the date it is due
if the Trustee or Paying Agent or Paying Agents hold on that date money
designated for and sufficient to pay the installment.
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(b) Payments (including principal, premium, if any, interest and
Liquidated Damages, if any) in respect of the Notes represented by the Global
Notes, the Holder of which has given wire transfer instructions on or prior to
the relevant record date, shall be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Physical Notes, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, at the office or
agency maintained by the Company in The City of New York referred to in Section
4.02 or, at the option of the Company, by mailing a check to each such Holder's
registered address.
Section 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain such 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 hereby designates the Corporate Trust Office as an initial Place of
Payment and as such office of the Company in the Borough of Manhattan, The City
of New York, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands so long as such Corporate Trust
Office remains a Place of Payment.
Section 4.03. Money for Payments to Be Held in Trust. If the Company shall
at any time act as its own Paying Agent, it will, on or before each due date of
the principal of (and premium, if any) or interest and Liquidated Damages, if
any, on, any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest and Liquidated Damages, if any, so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest and
Liquidated Damages, if any, on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest and Liquidated
Damages, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest and Liquidated
Damages, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
If the Company is not acting as its own Paying Agent, the Company will
cause any Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of (and premium,
if any) or interest and Liquidated Damages, if any, on Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
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(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any such payment of principal (and
premium, if any) or interest and Liquidated Damages, if any;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.
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 by Company
Order 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 trusts 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.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest and Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and
Liquidated Damages, if any, has become due and payable shall be paid in the
appropriate proportion to the Company upon a Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
Section 4.04. SEC Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes issued hereunder are outstanding,
the Company will furnish to each Trustee and the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of all such information and reports with the SEC for
public availability and make such information available to securities analysts
and prospective investors upon request.
(b) For so long as any Notes remain outstanding, the Company will furnish
to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
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(c) All obligors on the Notes will comply with Section 314(a) of the TIA.
(d) The Company shall promptly mail copies of all such annual reports,
information, documents and other reports provided to the Trustee pursuant to
clauses (a) and (c) hereof to the Holders at their addresses appearing in the
Register maintained by the Registrar.
(e) 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 or
determinable from 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 Officer's Certificates).
Section 4.05. Certificates to Trustee. (a) The Company will deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of the
Company stating that such officer has conducted or supervised a review of the
activities of the Company and its Restricted Subsidiaries and the Company's and
its Restricted Subsidiaries' performance under this Indenture and that, based
upon such review, to the best of such officer's knowledge, the Company has
fulfilled all obligations thereunder or, if there has been a default in the
fulfillment of any such obligation (determined without regard to any period of
grace or requirement of notice provided in this Indenture), specifying each such
default and the nature and status thereof.
(b) The Company will deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of an Event of Default
or a Default, an Officer's Certificate setting forth the details of such Event
of Default or Default, and the action which the Company proposes to take or has
taken with respect thereto.
(c) The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company a written statement by the Company's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii) whether, in connection with their audit
examination, any Default has come to their attention and, if such a Default has
come to their attention, specifying the nature and period of the existence
thereof.
Section 4.06. Limitation on Indebtedness. (a) On or after the Issue Date:
(i) the Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt);
(ii) the Company will not, and will not permit any of its Restricted
Subsidiaries to, issue any Disqualified Stock (including Acquired Disqualified
Stock);
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(iii) and the Company will not permit any of its Restricted Subsidiaries
that are not Subsidiary Guarantors to issue any shares of Preferred Stock
(including Acquired Preferred Stock);
provided, however, that the Company and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) and the Company and the Subsidiary
Guarantors may issue shares of Disqualified Stock (including Acquired
Disqualified Stock) if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
Letters of credit and bankers' acceptances shall be deemed to have an aggregate
principal amount of Indebtedness equal to the maximum amount available
thereunder.
(b) The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant to the Existing
Credit Facility (and by its Subsidiaries of Guarantees thereof) in an aggregate
principal amount at any time outstanding not to exceed an amount equal to $3.87
billion less the aggregate amount of all mandatory repayments (other than
mandatory prepayments triggered solely by the issuance of Indebtedness or
Preferred Stock of a Finance Subsidiary to refinance the Existing Credit
Facility) applied to (x) repay loans (other than revolving credit loans)
outstanding thereunder or (y) permanently reduce the revolving credit
commitments thereunder;
(ii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Senior Secured Notes and Senior Subordinated
Notes issued on the Issue Date and the Subsidiary Guarantees thereof;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness (other than Indebtedness of the type described in clauses
(i), (ii) or (v) through (xii) of this covenant);
(iv) the incurrence by the Company or any of its Restricted Subsidiaries
of any Permitted Refinancing in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness that
was permitted to be incurred under the Fixed Charge Coverage Ratio test set
forth above or clauses (ii) or (iii) above or (xiii) or (xiv) below or this
clause (iv);
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that (i) if the Company or any Subsidiary
Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
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respect to the Notes or the Subsidiary Guarantee, as the case may be, and
(ii)(A) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any Restricted Subsidiary of Hedging
Obligations that are incurred for the purpose of (A) fixing or hedging interest
rate or currency risk with respect to any fixed or floating rate Indebtedness
that is permitted by the Indenture to be outstanding or any receivable or
liability the payment of which is determined by reference to a foreign currency;
provided that the notional principal amount of any such Hedging Obligation does
not exceed the principal amount of the Indebtedness to which such Hedging
Obligation relates or (B) fixing or hedging risk with respect to fluctuations in
the cost of raw materials; provided that such obligation is entered into for
valid business purposes other than speculative purposes (as determined by the
Company's or such Restricted Subsidiary's principal financial officer in the
exercise of his or her good faith business judgment);
(vii) the issuance by any of the Company's Restricted Subsidiaries of
shares of Preferred Stock to the Company or a Wholly Owned Restricted
Subsidiary; provided that (A) any subsequent issuance or transfer of Equity
Interests that results in such Preferred Stock being held by a Person other than
the Company or a Wholly Owned Restricted Subsidiary or (B) the transfer or other
disposition by the Company or a Wholly Owned Restricted Subsidiary of any such
shares to a Person other than the Company or a Wholly Owned Restricted
Subsidiary shall be deemed, in each case, to constitute an issuance of such
Preferred Stock by such Subsidiary on such date that is not permitted by this
clause (vii);
(viii) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by tender, bid, performance, government contract,
surety or appeal bonds, standby letters of credit and warranty and contractual
service obligations of like nature, trade letters of credit or documentary
letters of credit, in each case to the extent incurred in the ordinary course of
business of the Company or such Restricted Subsidiary and the incurrence by the
Company of Indebtedness represented by letters of credit incurred in connection
with the PBGC Settlement;
(ix) the incurrence by any Restricted Subsidiary of the Company of
Indebtedness or the issuance by any Restricted Subsidiary of Preferred Stock,
the aggregate principal amount or liquidation preference of which, together with
all other Indebtedness and Preferred Stock of the Company's Restricted
Subsidiaries at the time outstanding and incurred or issued in reliance upon
this clause (ix), does not exceed $50.0 million;
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(x) the issuance by any Finance Subsidiary of Preferred Stock with an
aggregate liquidation preference not exceeding the amount of Indebtedness of the
Company held by such Finance Subsidiary; provided that the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to the covenant
described below under Section 4.04 immediately preceding the date on which such
Preferred Stock is issued would have been at least 2.0 to 1, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom) as
if such Preferred Stock had been issued at the beginning of such four-quarter
period;
(xi) the incurrence of Indebtedness by Foreign Subsidiaries in an aggregate
principal amount (or accreted value, as applicable) at any time outstanding and
incurred in reliance upon this clause (xi) not to exceed $100.0 million;
(xii) the Guarantee by any Restricted Subsidiary of Indebtedness of the
Company or a Restricted Subsidiary that was permitted to be incurred by another
provision of this covenant;
(xiii) Acquired Debt or Acquired Disqualified Stock; provided that such
Indebtedness or Disqualified Stock was not incurred in connection with or in
contemplation of such Person becoming a Restricted Subsidiary; and provided
further that immediately after giving effect to such incurrence, the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which financial statements have been filed with the SEC pursuant to
Section 4.04 immediately preceding the date of such incurrence would have been
at least 2.0 to 1, determined on a pro forma basis;
(xiv) Indebtedness or Disqualified Stock of a Specified Joint Venture or a
Subsidiary thereof existing at the time such Specified Joint Venture first
becomes a Restricted Subsidiary; provided that such Indebtedness or Disqualified
Stock was not incurred in connection with or in contemplation of such Specified
Joint Venture becoming a Restricted Subsidiary; and provided further that
immediately after giving effect to such Specified Joint Venture becoming a
Restricted Subsidiary, the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such Specified Joint Venture became a Restricted Subsidiary would have
been, determined on a pro forma basis, (x) at least 2.0 to 1 or (y) equal to or
greater than it was immediately prior to such Specified Joint Venture becoming a
Restricted Subsidiary;
(xv) with respect to any Specified Joint Venture that becomes a Restricted
Subsidiary, the incurrence by such Specified Joint Venture of Indebtedness under
any revolving credit facility in an aggregate principal amount at any time
outstanding not to exceed the aggregate principal amount of committed financing
under all revolving credit facilities of such Specified Joint Venture as in
effect on the Issue Date; and
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(xvi) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding and incurred in reliance on this clause (xvi) not to
exceed $25.0 million.
(c) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness or Preferred Stock meets the criteria of more
than one of the categories of permitted Indebtedness described in clauses (i)
through (xvi) above or is entitled to be incurred pursuant to Section 4.06(a),
the Company shall, in its sole discretion, classify such item of Indebtedness or
Preferred Stock in any matter that complies with this covenant and such
Indebtedness or Preferred Stock will be treated as having been incurred pursuant
to the clauses or Section 4.06(a), as the case may be, designated by the
Company. The amount of Indebtedness issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
Section 4.07. Limitation on Restricted Payments. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:
(i) declare or pay any dividend or make any distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (other than
(x) dividends or distributions payable in Qualified Equity Interests of the
Company and (y) dividends or distributions payable to the Company or any
Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company, any of its Restricted Subsidiaries or any Affiliate of
the Company (other than any such Equity Interests owned by the Company or any of
its Restricted Subsidiaries);
(iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness ("Subordinated Debt") of
the Company or any Restricted Subsidiary that is subordinated by its terms to
the Notes or the Subsidiary Guarantees issued under the Indenture (other than
Indebtedness owed to the Company or any Restricted Subsidiary), except, in each
case, payment of interest or principal at Stated Maturity; or
(iv) make any Restricted Investment (all such payments and other actions
set forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments");
unless, at the time of and after giving effect to such Restricted Payment
(the amount of any such Restricted Payment, if other than cash, shall be the
fair market value (as conclusively evidenced by a Board Resolution) of the
asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment):
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(A) no Default or Event of Default shall have occurred and be continuing
after giving effect thereto; and
(B) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to Section 4.04
immediately preceding the date of such Restricted Payment, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.06(a) and
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the Issue Date (excluding Restricted Payments permitted by Section 4.07(b)(ii)
(to the extent paid to the Company or any of its Restricted Subsidiaries or to
the extent such distributions are deducted as a minority interest in calculating
Consolidated Net Income), Section 4.07(b)(iii), Section 4.07(b)(iv), Section
4.07(b)(v), Section 4.07(b)(vii), Section 4.07(b)(x), Section 4.07(b)(xiv) and
Section 4.07(b)(xvi) and 50% of any Restricted Payments permitted by Section
4.07(b)(viii)), is less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter commencing
on April 1, 1999, to the end of the Company's most recently ended fiscal quarter
for which financial statements have been filed with the SEC pursuant to Section
4.04 at the time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company or any of
its Restricted Subsidiaries from the issue or sale (other than to a Subsidiary
or Joint Venture of the Company) after the Issue Date of Qualified Equity
Interests of the Company or of debt securities of the Company or any of its
Restricted Subsidiaries that have been converted into or exchanged for such
Qualified Equity Interests of the Company, plus
(iii) to the extent that any Restricted Investment (other than a Restricted
Investment permitted to be made pursuant to Section 4.07(b)(vii) or Section
4.07(b)(viii) below) that was made after the Issue Date is sold for cash or
otherwise liquidated, repaid or otherwise reduced, including by way of dividend
(to the extent not included in calculating Consolidated Net Income), for cash,
the lesser of (A) the cash return with respect to such Restricted Investment
(less the cost of disposition, if any) and (B) the initial amount of such
Restricted Investment plus
(iv) an amount equal to the sum of (A) the net reduction in Investments in
Unrestricted Subsidiaries resulting from dividends, repayments of loans or other
transfers of assets (to the extent not included in calculating Consolidated Net
Income), in each case to the Company or any Restricted
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Subsidiary from Unrestricted Subsidiaries and (B) the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Restricted Investments (other than Restricted Investments permitted to
be made pursuant to Section 4.07(b)(vii) or Section 4.07(b)(viii) below)
previously made after the Issue Date by the Company or any Restricted Subsidiary
in such Unrestricted Subsidiary.
(b) If, other than with respect to payments made under Section 4.07(b)(i)
and Section 4.07(b)(xiv) below, no Default or Event of Default shall have
occurred and be continuing after giving effect to such Restricted Payment, the
foregoing provisions will not prohibit the following Restricted Payments:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;
(ii) dividends or distributions by any Restricted Subsidiary of the Company
payable (x) to all holders of a class of Capital Stock of such Restricted
Subsidiary on a pro rata basis or on a basis that is more favorable to the
Company; provided that at least 50% of such class of Capital Stock is held by
the Company and/or one or more of its Restricted Subsidiaries or (y) to all
holders of a class of Preferred Stock of a Restricted Subsidiary that is not a
Subsidiary Guarantor issued after the Issue Date in compliance with Section
4.06;
(iii) the payment of cash dividends on any series of Disqualified Stock
issued after the Issue Date in an aggregate amount not to exceed the cash
received by the Company since the Issue Date upon issuance of such Disqualified
Stock;
(iv) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Company, any Restricted Subsidiary or any Joint Venture
(or the acquisition of all the outstanding Equity Interests of any Person that
conducts no operations and has no assets or liabilities other than the ownership
of Equity Interests in a Joint Venture) in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary or
Joint Venture of the Company) of, Qualified Equity Interests of the Company;
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (C)(ii) of Section 4.07(a);
(v) the defeasance, redemption or repurchase of Subordinated Debt with the
net cash proceeds from an incurrence of Permitted Refinancing or in exchange for
or out of the net cash proceeds from the substantially concurrent sale (other
than to a Subsidiary or Joint Venture of the Company) of Qualified Equity
Interests of the Company; provided that the amount of any such net cash proceeds
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that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (C)(ii) of Section 4.07(a);
(vi) the repurchase, redemption or other acquisition or retirement for
value of (x) any Equity Interests of the Company or any Subsidiary of the
Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option agreement or (y) any Equity Interests of the Company which are or are
intended to be used to satisfy issuances of Equity Interests upon exercise of
employee or director stock options or upon exercise or satisfaction of other
similar instruments outstanding under employee or director benefit plans of the
Company or any Subsidiary of the Company; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests shall
not exceed $5.0 million in any fiscal year of the Company;
(vii) Restricted Investments in any of the Specified Joint Ventures
(including without limitation, the purchase of Equity Interests of a Specified
Joint Venture directly from another Person or the purchase of all the
outstanding Equity Interests of any Person that conducts no operations and has
no assets or liabilities other than the ownership of Equity Interests of a
Specified Joint Venture) to the extent that the proceeds thereof are used to
purchase or redeem an interest of another Person in such Specified Joint Venture
(other than the Company, a Restricted Subsidiary or an Affiliate of the Company,
except a Person that is deemed to be an Affiliate solely by virtue of its
ownership of Equity Interests of the Company acquired in exchange for Equity
Interests in such Specified Joint Venture); provided that after giving pro forma
effect thereto as if such Restricted Payment (and any related incurrence of
Indebtedness) had been made at the beginning of the most recently ended four
full fiscal quarter period for which financial statements have been filed with
the SEC pursuant to Section 4.04 immediately preceding the date of such
Restricted Payment, the Company would have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.06(a);
(viii) Restricted Investments in any Joint Venture made during any fiscal
year of the Company or within 45 days after the end of such fiscal year in
amounts that, together with all other Restricted Investments made in such Joint
Venture in respect of such fiscal year in reliance on this Section 4.07(b)(viii)
during such fiscal year or within 45 days after the end of such fiscal year, do
not exceed the amount of dividends or distributions previously paid in respect
of such fiscal year to the Company or any Restricted Subsidiary by such Joint
Venture;
(ix) the payment of dividends on the Company's common stock in an
aggregate amount per annum not to exceed the product of
(i) $0.90 and
(ii) the sum, without duplication, of
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(w) the number of shares outstanding on the day prior to the Issue Date
plus
(x) the greater of (I) if the Company issues shares of its common stock on
or after the Issue Date in one or more equity offerings for cash, to the extent
that the gross proceeds therefrom do not exceed $500 million, such number of
shares of common stock or (II) the number of shares issued in the stock offering
being made concurrently with the placement of the Initial Notes (including
pursuant to the exercise of the overallotment option by the underwriters of the
stock offering), plus
(y) if the Company issues shares of its common stock after the Issue Date,
to the extent (1) such shares are issued in exchange for or (2) the net cash
proceeds therefrom are used substantially concurrently to acquire Equity
Interests (held by a Person other than the Company, a Restricted Subsidiary or
an Affiliate of the Company, except a Person that is deemed to be an Affiliate
solely by virtue of its ownership of Equity Interests of the Company acquired in
exchange for Equity Interests in such Specified Joint Venture) of a Specified
Joint Venture that immediately prior to such issuance was or as a result of such
exchange or acquisition becomes a Restricted Subsidiary (and such Specified
Joint Venture is not subsequently designated as an Unrestricted Subsidiary),
such number of shares of common stock plus
(z) the sum of (1) 1,000,000 and (2) such number of shares of common stock
of the Company as are issued after the Issue Date pursuant to the exercise of
employee or director stock options granted prior to the Issue Date or issued
after the Issue Date pursuant to other employee or director benefit plans of the
Company or any of its Restricted Subsidiaries or issuable pursuant to the
exercise of employee or director stock options granted after the Issue Date;
provided that the aggregate number of shares includable pursuant to this clause
(z)(2) with respect to shares issued or issuable during any fiscal year of the
Company shall not exceed 1,000,000;
provided further that the number of shares referred to in clauses (x), (y) and
(z) shall be adjusted to reflect any stock split (or reverse stock split) or
stock dividend made after the Issue Date and prior to the date such shares were
issued;
(x) distributions or payments of Receivables Fees;
(xi) (A) Investments in any Joint Venture or Unrestricted Subsidiary
organized to construct, own and/or operate a propylene oxide plant in the
European Union in an aggregate amount that, together with all other Investments
made pursuant to this Section 4.07(b)(xi), does not exceed $100.0 million and
(B) the pledge of the Capital Stock of such Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding directly or indirectly of Equity Interests of
such Joint
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Venture to secure Non-Recourse Debt of such Joint Venture or Unrestricted
Subsidiary;
(xii) (A) (x) the transfer of the TDI Assets to a newly formed Joint
Venture or Unrestricted Subsidiary or (y) the designation of any Restricted
Subsidiary that has no assets or liabilities other than all or a portion of the
TDI Assets as an Unrestricted Subsidiary, in each case, in connection with the
incurrence of Indebtedness by such Joint Venture or Unrestricted Subsidiary or
Rhodia or a wholly-owned subsidiary of Rhodia to improve the Rhodia TDI Plant
and (B) the pledge of the Capital Stock of such Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding directly or indirectly of Equity Interests of
such Joint Venture to secure Non-Recourse Debt of such Joint Venture or
Unrestricted Subsidiary or Rhodia or a wholly-owned subsidiary of Rhodia;
(xiii) the repurchase of any Subordinated Debt at a purchase price not
greater than 101% of the principal amount thereof in the event of (x) a Change
of Control pursuant to a provision no more favorable to the holders thereof than
the provisions of Section 4.14 or (y) an Asset Sale pursuant to a provision no
more favorable to the holders thereof than the provisions of Section 4.09;
provided that, in each case, prior to such repurchase the Company has made a
Change of Control Offer or Asset Sale Offer, as applicable, and repurchased all
Notes that were validly tendered for payment in connection with such Change of
Control Offer or Asset Sale Offer;
(xiv) distributions by any Restricted Subsidiary or Joint Venture of
chemicals to a holder of Capital Stock of such Restricted Subsidiary or Joint
Venture if such distributions are made pursuant to a provision in a joint
venture agreement or other arrangement entered into in connection with the
establishment of such Joint Venture or Restricted Subsidiary that requires such
holder to pay a price for such chemicals equal to that which would be paid in a
comparable transaction negotiated on an arms-length basis (or pursuant to a
provision that imposes a substantially equivalent requirement);
(xv) any other Restricted Payment which, together with all other Restricted
Payments made pursuant to this Section 4.07(b)(xv) on or after the date of the
Indenture, does not exceed $25 million (after giving effect to any subsequent
reduction in the amount of any Investments made pursuant to this Section
4.07(b)(xv) as a result of the repayment or other disposition thereof for cash
as set forth in clause (iii) of the first paragraph above, the amount of such
reduction not to exceed the amount of such Investments previously made pursuant
to this Section 4.07(b)(xv)); and
(xvi) dividends or distributions by any Joint Venture (other than a
Specified Joint Venture) to all holders of a class of Capital Stock of such
Joint Venture permitted by Section 4.07(b)(ii)(x) above; provided that after
giving effect to such dividends or distributions and any related transactions,
the Joint Venture making such dividends or distributions to such holders is
contractually entitled to receive, and receives within 180 days before or after
the date of such
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dividends or distributions, directly or indirectly, an equivalent or larger cash
payment from each such holder (other than from a holder that is the Company or
any Restricted Subsidiary) or from an Affiliate of such holder, which cash
payment has not been previously applied pursuant to this Section 4.07(b)(xvi) to
offset any other dividend or distribution by such Joint Venture to such holder
and (y) such dividends or distributions do not exceed such holders' pro rata
share of the Joint Venture's cash flows from operating activities, minus any
non-cash charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period or amortization of a prepaid cash expense
in any future period.
(c) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments Section
4.07(a) (except to the extent such Investments were repaid in cash, and, in the
case of a Joint Venture (and any Subsidiary of a Joint Venture) designated as an
Unrestricted Subsidiary on the first day that it is a Subsidiary of the Company,
except to the extent that (1) such Investments were made after the Issue Date or
(2) in the case of a Specified Joint Venture, such Investments were made prior
to the Issue Date). All such outstanding Investments (except as provided in the
parenthetical included in the preceding sentence) will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as conclusively determined by the Board of
Directors). Such designation will only be permitted if any such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. In the case of any
designation by the Company of a Person as an Unrestricted Subsidiary on the
first day that such Person is a Subsidiary of the Company in accordance with the
provisions of the Indenture, such designation shall be deemed to have occurred
for all purposes of the Indenture simultaneously with, and automatically upon,
such Person becoming a Subsidiary.
(d) Not later than the date of making any Restricted Payment, other than
those permitted by Sections 4.07(b)(ii)(x), 4.07(b)(vi), 4.07(b)(x) and
4.07(b)(xiv) above, and not later than the 120th day after making any Restricted
Payment permitted by Section 4.07(b)(vi) above, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.
Section 4.08. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries and Joint Ventures. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
restriction on the ability of any Restricted Subsidiary to:
(i) (A) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect
to
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any other interest or participation in, or measured by, its profits or (B) pay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) existing agreements as in effect on the Issue Date;
(b) Indebtedness permitted by the Indenture to be incurred containing
restrictions on the ability of Restricted Subsidiaries to consummate
transactions of the types described in clauses (i), (ii) or (iii) above not
materially more restrictive than those contained in the Indenture;
(c) the Senior Secured Notes Indentures and the Senior Subordinated Notes
Indenture;
(d) applicable law;
(e) existing restrictions with respect to a Person acquired by the Company
or any of its Restricted Subsidiaries (except to the extent such restrictions
were put in place in connection with or in contemplation of such acquisition),
which restrictions are not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the Person,
so acquired;
(f) customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business;
(g) construction loans and purchase money obligations (including Capital
Lease Obligations) for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so constructed or acquired;
(h) in the case of clause (iii) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject to such
security agreements or mortgages;
(i) a Permitted Refinancing, provided that the restrictions contained in
the agreements governing such Permitted Refinancing are not materially more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced (as conclusively evidenced by a Board
Resolution);
(j) customary restrictions on a Finance Subsidiary imposed in such Finance
Subsidiary's organizational documents or by the terms of its Preferred Stock;
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(k) any restriction with respect to shares of Capital Stock of a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of such shares of Capital Stock or any restriction with respect to
the assets of a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of such assets or all or substantially all the
Capital Stock of such Restricted Subsidiary pending the closing of such sale or
disposition;
(l) in the case of any Restricted Subsidiary that is a Joint Venture,
customary restrictions on such Restricted Subsidiary contained in its joint
venture agreement, which restrictions are consistent with the past practice of
the Company and its Restricted Subsidiaries (as conclusively evidenced by a
Board Resolution);
(m) existing restrictions with respect to a Specified Joint Venture or the
property or assets thereof or a Subsidiary of a Specified Joint Venture or the
property or assets thereof, in each case, at the time such Specified Joint
Venture first becomes a Restricted Subsidiary (except to the extent such
restrictions were put in place in connection with or in contemplation of such
Specified Joint Venture becoming a Restricted Subsidiary), which restrictions
are not applicable to any Person, or the properties or assets of any Person,
other than such Specified Joint Venture or the property or assets thereof or a
Subsidiary of such Specified Joint Venture or the property or assets thereof;
and
(n) the Existing Credit Facility and related documentation as the same is
in effect on the Issue Date and as amended, modified, extended, renewed,
refunded, refinanced, restated or replaced from time to time; provided that the
Existing Credit Facility and related documentation as so amended, modified,
extended, reviewed, refunded, refinanced, restated or replaced is not materially
more restrictive, taken as a whole, as to the matters enumerated above than the
Existing Credit Facility and related documentation as in effect on the Issue
Date (as conclusively evidenced by a Board Resolution).
For purposes of determining compliance with this covenant, in the event
that a restriction meets the criteria of more than one of the categories of
permitted restrictions described in clauses (a) through (n) above, the Company
shall, in its sole discretion, classify such restriction in any matter that
complies with this covenant and such restriction will be treated as existing
pursuant to the clauses designated by the Company.
(b) The Company will use best efforts (consistent with its contractual
obligations and fiduciary duties to any Joint Venture, in each case, as in
effect on the Issue Date) not to permit any of its Joint Ventures that are not
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction on the ability of such Joint
Venture to:
(i) (A) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its
profits or (B) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
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(iii) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) such Joint Venture's joint venture agreement or its credit facility
(provided that in each case such restrictions are consistent with the past
practice of the Company);
(b) in the case of any Joint Venture existing on the Issue Date, its
existing agreements as in effect on the date of the Indenture and as amended,
modified, extended, restated or replaced from time to time; provided that no
such amendment, modification, extension, restatement or replacement results in
agreements that are materially more restrictive, taken as a whole, as to the
matters enumerated above than the existing agreements as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution);
(c) in the case of LCR, any instrument governing its Indebtedness; and
(d) the restrictions described in clauses (d), (e), (f), (g), (h), (j), (k)
and (n) of Section 4.08(a) (assuming that references in clauses (h) and (k) to a
Restricted Subsidiary were references to a Joint Venture).
Section 4.09. Limitation on Sales of Assets. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(i) the Company and/or the Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value (as conclusively evidenced by a Board Resolution set
forth in an Officers' Certificate delivered to the Trustees) of the assets
or Equity Interests issued or sold or otherwise disposed of; and
(ii) at least 80% of the consideration therefor received by the Company
and/or such Restricted Subsidiary is in the form of
(A) cash or Cash Equivalents or
(B) a controlling interest or a joint venture interest (to the extent
otherwise permitted by the Indenture) in a business engaged in a
Permitted Business or long-term property or assets that are used or
useful in a Permitted Business;
provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are promptly
converted by the
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Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option:
(i) to permanently repay Senior Indebtedness (and to correspondingly
reduce commitments with respect thereto in the case of revolving
borrowings) of the Company or a Subsidiary Guarantor or Indebtedness (and
to correspondingly reduce commitments with respect thereto in the case of
revolving borrowings) of any Restricted Subsidiary that is not a Subsidiary
Guarantor; provided that, so long as the provisions of Section 4.12 are in
effect, only repayment of Senior Indebtedness incurred under the Existing
Credit Facility (but not any refinancing thereof other than a credit
facility with commercial banks and other lenders) or consisting of the 9.9%
Debentures due 2000 of ARCO Chemical shall constitute a repayment of
Indebtedness permitted pursuant to this clause (i); or
(ii) to acquire a controlling interest or a joint venture interest (to
the extent otherwise permitted by the Indentures) in another business or,
the making of a capital expenditure or the acquisition of other long-term
assets, in each case, in a Permitted Business (or enter into a binding
commitment for any such expenditure or acquisition); provided that such
binding commitment shall be treated as a permitted application of Net
Proceeds from the date of such commitment until and only until the earlier
of (x) the date on which such expenditure or acquisition is consummated and
(y) the 180th day following the expiration of the aforementioned 360 day
period. If the expenditure or acquisition contemplated by such binding
commitment is not consummated on or before such 180th day and the Company
shall not have applied such Net Proceeds pursuant to clause (i) above on or
before such 180th day, such commitment shall be deemed not to have been a
permitted application of Net Proceeds at any time;
provided that, so long as the provisions of Section 4.12 are in effect, the
Company may not apply Net Proceeds of a Significant Asset Sale pursuant to
clause (ii) above to satisfy its obligations to apply such proceeds pursuant to
this paragraph except to the extent that the provisions of the Existing Credit
Facility (but not any refinancing thereof other than a credit facility with
commercial banks and other lenders) require a mandatory prepayment from such
proceeds but the requisite lenders thereunder have waived such mandatory
prepayment.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Existing Credit Facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
the Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this Section 4.09(b) will be
deemed to constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $25 million, the
Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes and, (x) if the
Company is required to do so under the terms of any other Indebtedness ranking
pari passu with such
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Notes, such other Indebtedness, and (y) if the Company elects to do so, any
Existing ARCO Chemical Debt, on a pro rata basis with the Notes, that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth herein.
To the extent that the aggregate amount of Notes (and any other pari passu
Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, the Company may, subject to the
other terms of the Indenture, use any remaining Excess Proceeds for general
corporate purposes.
If the aggregate principal amount of Notes surrendered by Holders thereof
in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.
Upon completion of the offer to purchase made under the Indenture, the
amount of Excess Proceeds shall be reset at zero.
(d) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with any Asset
Sale Offer.
Section 4.10. Limitation on Affiliate Transactions. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on an arms-length basis and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, a Board Resolution set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $25 million, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an investment banking firm of national standing; provided that:
(i) transactions or payments pursuant to any employment arrangements or
employee, officer or director benefit plans or arrangements entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) any Restricted Payment permitted by Section 4.07 of the type
described in clause (i) or (ii) of the first paragraph thereof;
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(iv) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Restricted Subsidiaries;
(v) transactions entered into on an arms-length basis in the ordinary
course of business between the Company or any of its Restricted Subsidiaries and
any Joint Venture;
(vi) sales (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable and the
provision of billing, collection and other services in connection therewith, in
each case, to an Accounts Receivable Subsidiary in connection with any
Receivables Facility; and
(vii) transactions pursuant to any contract or agreement in effect on the
date of the Indenture as the same may be amended, modified or replaced from time
to time so long as any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the Company and its
Restricted Subsidiaries than the contract or agreement as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution); in each
case, shall not be deemed to be Affiliate Transactions and therefore not subject
to the requirements of clauses (i) and (ii) of the initial sentence above.
Section 4.11. Limitation on Liens. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (except Permitted Liens) on any asset
now owned or hereafter acquired, or any income or profits therefrom, unless all
payments due under the Indenture and the Notes or the Subsidiary Guarantees are
secured on an equal and ratable basis with the obligations so secured (or, if
such obligations are subordinated by their terms to the Notes or the
Subsidiary Guarantees, prior to the obligations so secured) until such time as
such obligations are no longer so secured.
(b) The Company and its Subsidiaries shall also comply with the provisions
of Section 4.12(a) until such provisions cease to be in effect pursuant to
Section 4.12(b).
Section 4.12. Equal and Ratable Liens. (a) To the extent the Company or
any Subsidiary of the Company grants a Lien upon any of its property or assets
to secure the Existing Credit Facility Obligations, the Company or such
Subsidiary, as the case may be, shall, contemporaneously with the granting of
such Lien, secure the Indenture Obligations equally and ratably with the
Existing Credit Facility Obligations secured by such Lien.
(b) Notwithstanding the foregoing, from and after the date when all Liens
granted in favor of the holders of Existing Credit Facility Obligations are
released (and are not concurrently replaced with any new Liens on any asset of
the Company or any of its Restricted Subsidiaries securing Existing Credit
Facility Obligations), the provisions of this Section 4.12 will no longer apply.
The provisions of Section 4.11 will, however, continue to apply.
Section 4.13. No Amendment to Subordination Provisions. The Company will
not amend, modify or alter the Senior Subordinated Notes Indenture in any way
that would (i) increase the principal of, advance the final maturity date of or
shorten the
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Weighted Average Life to Maturity of any Senior Subordinated Notes such that the
final maturity date of the Senior Subordinated Notes is earlier than the 91st
day following the final maturity date of the Notes or (ii) amend the
subordination provisions of the Senior Subordinated Notes Indenture or any of
the defined terms used therein in a manner that would be adverse to the holders
of the Notes.
Section 4.14. Repurchase of Notes upon a Change in Control. (a) Upon the
occurrence of a Change of Control, each Holder will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company will mail, or at the Company's
request the Trustee will mail, a notice to each Holder offering to repurchase
the Notes held by such Holder pursuant to the procedures specified in such
notice.
(b) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
and not withdrawn pursuant to the Change of Control Offer, (2) deposit with the
applicable Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered, and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such Note will be in a principal amount
of $1,000 or an integral multiple thereof.
(d) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer at
the same or a higher purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.15. Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Leaseback Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if: (a) the Company
or such Restricted
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Subsidiary, as the case may be, could have (i) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such Sale and Leaseback
Transaction pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.06(a) (whether or not such covenant has ceased to be otherwise in
effect pursuant to Section 4.18) and (ii) incurred a Lien to secure such
Indebtedness pursuant to Section 4.11 without securing the Notes; and (b) the
gross cash proceeds of such Sale and Leaseback Transaction are at least equal to
the fair market value (as conclusively determined by the Board of Directors) of
the property that is the subject of such Sale and Leaseback Transaction.
Section 4.16. Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, except to such extent as would not be material
to the Company and its Subsidiaries taken as a whole.
Section 4.17. Limitation on Accounts Receivable Facilities. The Company
may, and any of its Restricted Subsidiaries may, sell (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) at any time and from time to time, accounts receivable to any
Accounts Receivable Subsidiary; provided that the aggregate consideration
received in each such sale is at least equal to the aggregate fair market value
of the receivables sold.
Section 4.18. Limited Applicability of Covenants when Notes are rated
Investment-Grade. Notwithstanding the foregoing, the Company's and its
Restricted Subsidiaries' obligations to comply with the provisions of Sections
4.06, 4.07, 4.08, 4.09, 4.10, 4.16, 4.17 and 4.22 will terminate and cease to
have any further effect from and after the first date when the Notes are rated
Investment Grade.
Section 4.19. Existence. Subject to Articles 4 and 5 of this Indenture,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each such Subsidiary and the rights (whether
pursuant to charter, partnership certificate, agreement, statute or otherwise),
material licenses and franchises of the Company and each such Subsidiary;
provided that the Company shall not be required by this Section 4.19 to preserve
any such right, license or franchise, or the existence of any Restricted
Subsidiary, if the Company shall determine that the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole.
Section 4.20. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (a) all material taxes, assessments and governmental charges levied
or imposed upon (i) the Company or any such Subsidiary, (ii the income or
profits of any such Subsidiary which is a corporation or (ii the property of the
Company or any such Subsidiary and (b) all material lawful claims for labor
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such Subsidiary; provided that the Company shall
not be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good
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faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
Section 4.21. Maintenance of Properties and Insurance. The Company will
cause all material assets necessary in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
will cause to be made all necessary repairs, renewals and replacements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided that nothing in this Section 4.21 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
assets or disposing or abandoning of any of them, if such discontinuance,
disposal or abandonment is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.
The Company will maintain, and will cause each of its Restricted
Subsidiaries to maintain (either in the Company's name or in such Subsidiary's
own name) insurance on all their respective properties consistent with the
insurance maintained on the Issue Date or otherwise in at least such amounts
(with no materially greater risk retention) and against at least such risks as
are usually maintained, retained or insured against in the same general area by
companies of established repute owning similar properties in such area and
engaged in the same or a similar business, in either case, to the extent
available to the Company and its Restricted Subsidiaries on commercially
reasonable terms.
Section 4.22. Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other Indebtedness of the Company or any of its Restricted
Subsidiaries (except Indebtedness of such Restricted Subsidiary or a Restricted
Subsidiary of such Restricted Subsidiary) unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture in the form of
Exhibit B hereto providing for the Guarantee of the payment of the Notes by such
Restricted Subsidiary and shall deliver an Opinion of Counsel to the Trustee
pursuant to paragraph (c) below; provided that this paragraph shall not be
applicable to (x) any Guarantee of any Restricted Subsidiary that existed at the
time such Person became a Restricted Subsidiary and was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary, (y) Guarantees of Indebtedness of a Restricted Subsidiary that is a
Foreign Subsidiary by a Restricted Subsidiary that is a Foreign Subsidiary or
(z) the granting of Liens by a Joint Venture Subsidiary to secure Indebtedness
under the Existing Credit Facility and the Senior Secured Notes. If the Notes
are (A) pari passu with the Guaranteed Indebtedness, then the Subsidiary
Guarantee shall be pari passu with, or senior to, the guarantee of such
Guaranteed Indebtedness or (B) senior to the Guaranteed Indebtedness, then the
Subsidiary Guarantee shall be senior to the guarantee of such Guaranteed
Indebtedness at least to the extent that the Notes are senior to such Guaranteed
Indebtedness.
(b) Notwithstanding the foregoing, each Subsidiary Guarantee by a
Restricted Subsidiary shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all the Company's and each Restricted Subsidiary's
Capital Stock in such Restricted Subsidiary
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(which sale, exchange or transfer is not prohibited by the Indenture) as
provided in Section 5.03(b), (ii) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guarantee (or, in the case of
the Subsidiary Guarantees of Lyondell Chemical Worldwide, Inc. and Lyondell
Chemical Nederland, Ltd. issued on the Issue Date, the release or discharge of
its Guarantee of Indebtedness under the Existing Credit Facility), except a
discharge or release by or as a result of payment under such Guarantee, and
(iii) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the Indenture.
(c) The Opinion of Counsel described above shall be to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and constitutes a valid and binding obligation of such Subsidiary,
enforceable against such Subsidiary in accordance with its terms (subject to
customary exceptions).
Section 4.23. Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend such term or provision in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
ARTICLE 5
Consolidation, Merger or Sale of Assets
Section 5.01. Consolidation, Merger or Sale of Assets by the Company. (a)
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all its assets in one or more related
transactions, to another corporation, Person or entity unless:
(i) the Company is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the corporation formed by or surviving any such consolidation or
merger (if other than the Company) or the corporation to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the Obligations of the Company under the Notes, the
Indenture and the Security Documents to which it is a party pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists; and
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(iv) the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made (A) will have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) except with respect
to a consolidation or merger of the Company with or into a Person that has
no outstanding Indebtedness, will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.06(a). The foregoing
shall not prohibit the merger or consolidation of a Wholly Owned Restricted
Subsidiary with the Company; provided that, in connection with any such
merger or consolidation, no consideration (other than common stock in the
surviving Person or the Company) shall be issued or distributed to the
stockholders of the Company.
(b) The Company will not lease all or substantially all its assets to
another Person.
Section 5.02. Successor Company Substituted. (a) Except as provided in
Section 5.02(b), upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all the assets
of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" shall refer instead to the successor corporation), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and the predecessor Company shall be released from all its obligations hereunder
and under the Notes.
(b) The sale, assignment, transfer, lease, conveyance or other disposition
by the Company of all or substantially all its property or assets taken as a
whole to one or more of the Company's Subsidiaries shall not relieve the Company
from its obligations under the Indenture and the Notes.
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor. (a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor unless:
(i) subject to the provisions of Section 5.03(b) below, the Person
formed by or surviving any such consolidation or merger (if other than the
Company or such Subsidiary Guarantor) assumes all the obligations of such
Subsidiary Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes;
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(ii) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(iii) the Company would, at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, (A) have a Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction
and (B) except with respect to a consolidation or merger with a Person that
has no outstanding Indebtedness, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in 4.06(a).
All the Subsidiary Guarantees issued pursuant to clause (i) above shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all such Subsidiary Guarantees had been issued
at the date of the execution hereof.
(b) (i) The requirements of clauses (i) and (iii) of Section 5.03(a) will
not apply in the case of a consolidation with or merger with or into the Company
and the requirements of clause (iii) of Section 5.03(a) will not apply in the
case of a consolidation with or merger with or into another Subsidiary
Guarantor.
(ii) In the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all the Capital Stock of any Subsidiary Guarantor
to any Person that is not an Affiliate of the Company permitted by the
applicable provisions of the Indenture, such Subsidiary Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture.
Section 5.04. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 7.01 and 7.03, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition referred to in Section 5.01 or
5.03 complies with the applicable provisions of this Indenture.
ARTICLE 6
Remedies
Section 6.01. Events of Default. Each of the following constitutes an
"Event of Default":
(a) a default in the payment of interest or any Liquidated Damages on the
Notes when due, which has continued for 30 days;
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(b) a default in the payment when due of principal of or premium on, any
Note when due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise;
(c) the failure by the Company to comply with its obligations under
Article 5 above and under Section 4.09, and under Section 4.14 ;
(d) the Company or any Subsidiary Guarantor defaults in the performance of
or breaches any other covenant or agreement in this Indenture or under the Notes
(other than (a), (b) or (c) above) and such default or breach continues for a
period of 60 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) any default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Significant
Subsidiaries (or any Indebtedness for money borrowed Guaranteed by the Company
or any of its Significant Subsidiaries if the Company or a Significant
Subsidiary does not perform its payment obligations under such Guarantee within
any grace period provided for in the documentation governing such Guarantee)
and, whether such Indebtedness or Guarantee exists on the date of the indenture
or is thereafter created, which default (a) constitutes a Payment Default or (b)
results in the acceleration of such Indebtedness prior to its Stated Maturity,
and in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or that has been so accelerated, aggregates $50 million or more;
(f) failure by the Company or any of its Significant Subsidiaries to pay a
final judgment or final judgments aggregating in excess of $50 million, which
judgment or judgments are not paid, discharged or stayed for a period of 60
days;
(g) a court having jurisdiction in the premises enters a decree or order
for (i) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all the property and
assets of the Company or any Significant Subsidiary or (ii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days;
(h) the Company or any Significant Subsidiary (i) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all the property and assets of the Company or any
Significant Subsidiary or (ii) effects any general assignment for the benefit of
creditors;
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(i) except as permitted by the Indenture, any Subsidiary Guarantee issued
hereunder shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under the Subsidiary
Guarantees issued thereunder; or
(j) any of the Security Documents ceases to be in full force and effect,
or any of the Security Documents ceases to give the holders of the Notes any of
the Liens purported to be created thereby, or any of the Security Documents is
declared null and void or the Company or any Restricted Subsidiary denies in
writing that it has any further liability under any Security Document or gives
written notice to such effect (in each case other than in accordance with the
terms of this Indenture (including Section 14.01(b)) or the terms of the
Existing Credit Facility or the Security Documents (including the cessation of
effectiveness of any Security Document in connection with a release of all
collateral covered thereby in accordance with the terms of this Indenture, the
Existing Credit Facility and such Security Document) or unless waived by the
requisite lenders under the Existing Credit Facility if, after the waiver, the
Company is in compliance with Section 4.12; provided that if a failure of the
sort described in this clause (j) is susceptible of cure, no Event of Default
shall arise under this clause (j) with respect thereto until 30 days after
notice of such failure shall have been given to the Company by the Trustee or
Holders of at least 25% in principal amount of the then outstanding Notes issued
under the Indenture.
Section 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or any Subsidiary Guarantor) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then Outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders (the "Acceleration
Notice")), may, and the Trustee at the request of such Holders shall, declare
the principal of, premium, if any, and accrued but unpaid interest and
Liquidated Damages, if any, on all the Notes to be due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest and Liquidated Damages, if any, shall be immediately due and payable.
If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs
with respect to the Company or any Subsidiary Guarantor, the principal of,
premium, if any, accrued interest and Liquidated Damages, if any, on the Notes
then Outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
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 or interest and Liquidated Damages on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes 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 Past Defaults. The Holders of at least a majority
in principal amount of the outstanding Notes, by written notice to the Company
and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences under the Notes, if (i) all
existing Events of Default, other than the nonpayment of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction. 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. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes may 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. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders.
Section 6.06. Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Notes unless:
(a) the Holder gives the Trustee written notice of a continuing Event of
Default;
(b) the Holders of at least 25% in aggregate principal amount of
Outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt thereof and the offer of security or indemnity; and
(e) during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes do not give the Trustee a
direction inconsistent with the request.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
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 Section 6.01(a) or (b) 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 or any other obligor for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover amounts due the Trustee under Section 7.08,
including 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 as may be necessary
or advisable in order 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 any other obligor upon the Notes), its
creditors or its property 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 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 7.08. 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 7.08 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 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 Notes 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.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article or receives any money from the Collateral Agent as the distribution
of proceeds received upon realization of any Collateral, it shall pay out the
money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.08, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest and Liquidated Damages,
respectively; and
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Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10 upon five Business Days prior notice to
the Company.
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 and expenses, 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 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by
Holders of more than 10% in aggregate principal amount of the then Outstanding
Notes.
Section 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, any other obligor upon the Notes, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.14. 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 or other similar
law wherever enacted, now or at any time hereafter in force, that would prohibit
or forgive the Company from paying all or any portion of the principal of (or
premium, if any), interest or Liquidated Damages, if any, on the Notes
contemplated herein or in the Notes or that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenant 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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ARTICLE 7
The Trustee
Section 7.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(i) 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
(ii) 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,
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 examine the certificates and opinions 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).
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) 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 (i) this paragraph does not
limit the effect of Section 7.01(a); (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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 6.06.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(e) 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 Sections 7.01
and 7.03.
Section 7.02. Notice of Defaults. (a) Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Register, notice of such Default hereunder
actually known to the Trustee unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium (if any) or interest and Liquidated Damages, if
any, on, any Note, the Trustee may withhold such notice if and so long as the
board of directors, the executive committee or a trust committee of
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Responsible Officers of the Trustee determines that the withholding of such
notice is not opposed to the interests of the Holders.
(b) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any event or of any Default (except default in the
payment of monies to the Trustee which are required to be paid to the Trustee on
or before a specified date or within a specified time after receipt by the
Trustee of a notice or a certificate which was in fact received), unless the
Trustee shall receive from the Company or a Holder a notice stating that the
same has occurred and is continuing, and specifying the same, and in the absence
of such notice the Trustee may conclusively assume that the same does not exist,
except as aforesaid.
Section 7.03. Certain Rights of Trustees. Subject to the provisions of
Section 7.01:
(i) 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, direction, consent, order,
bond, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order thereof, and
any resolution of any Person's board of directors (or any committee
thereof) shall be sufficiently evidenced if certified by an Officer of such
Person as having been duly adopted and being in full force and effect on
the date of such certificate;
(iii) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon the Officer's Certificates of the Company;
(iv) the Trustee may consult with counsel of its selection 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;
(v) in case an Event of Default occurs and is continuing, the Trustee
shall be under no obligation to exercise any of the rights or powers vested
in it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to it against any loss,
liability or expense which might be incurred by it in compliance with such
request or direction;
(vi) 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, direction, consent, order,
bond, note, other evidence of indebtedness or other paper or document;
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(vii) 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
(viii) the rights, privileges, protections, 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 7.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on Form T-
1 supplied to the Company in connection with the registration of any Notes
issued hereunder will be true and accurate subject to the qualifications set
forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes or the
proceeds thereof.
Section 7.05. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company' use of the proceeds from the Notes, it shall not be
responsible for any statement in the offering memorandum for the Notes or in the
Indenture or the Notes (other than its certificate of authentication), the acts
of a prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.
Section 7.06. May Hold Notes. The Trustee, any Authenticating Agent, any
Paying Agent, any Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
Section 7.09 and Section 7.14, may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Registrar or such other agent.
Section 7.07. Money Held in Trust. Money held by the Trustee in trust
hereunder 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 money
received by it hereunder except as otherwise agreed in writing with the Company.
Section 7.08. Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
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(b) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to hold
it harmless against, any loss, damage, claims, liability or expense (including
taxes, other than taxes based on the income of the Trustee) incurred without
negligence or bad faith on its part, 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,
a Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Company' payment obligations pursuant to this Section 7.08 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(g) or 6.01(h), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.09. Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, within 90 days the Trustee
shall either eliminate such conflicting interest, apply to the SEC for
permission to continue as Trustee with such conflicting interest, or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
TIA and this Indenture. To the extent permitted by such Act, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Original Notes and Additional Notes, or a trustee
under any other indenture between the Company and the Trustee.
Section 7.10. Corporate Trustee Required; Eligibility. (a) There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $100,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 7.10
and to the extent permitted by the TIA, the combined capital and surplus of such
Person 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 Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 7.11. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.12.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 7.12 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.12 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If at any time:
(i) the Trustee shall fail to comply with Section 7.09 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 7.10 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(iii) 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, (A) the Company may remove the Trustee, or (B) subject
to Section 6.11, any Holder who has been a bona fide Holder for at least six
months may, on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.
(d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
shall promptly appoint a successor Trustee and shall comply with the applicable
requirements of Section 7.12. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 7.12,
become the successor Trustee and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner required by
Section 7.12, then, subject to Section 6.11, any Holder who has been a bona fide
Holder for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.10. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
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Section 7.12. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee, 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) 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, powers and trusts referred to above.
(c) 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 7.
Section 7.13. Merger, Conversion, Consolidation or Succession to Business.
(a) Any corporation 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 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 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 7.14. Preferential Collection of Claims Against the Company. (a)
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Notes), the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against the Company (or any such
other obligor).
Section 7.15. Appointment of Authenticating Agent. The Trustee may appoint
an Authenticating Agent acceptable to the Company to authenticate the Notes. Any
such appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer, a copy of which instrument shall be promptly furnished to
the Company. Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication (or execution of a certificate of
authentication) by the Trustee includes authentication (or execution of a
certificate of authentication) by such Authenticating Agent. An Authenticating
Agent has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
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ARTICLE 8
Holders' List and Reports by Trustee and the Company
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing. (a) The Company will furnish or cause to be
furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(ii) 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, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Section 8.01.
(b) The Company will promptly notify the Trustee when any Notes are listed
on any stock exchange and of any delisting thereof.
Section 8.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in Section 8.01 and the names and addresses
of Holders received by the Trustee in its capacity as Registrar; provided,
however, that if and so long as the Trustee shall be the Registrar, the Register
shall satisfy the requirements relating to such list. None of the Company, the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 8.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
(c) Every Holder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the TIA.
Section 8.03. Reports by Trustee. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the TIA at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the TIA, the Trustee shall, within 60
days after each May 15, following the date of this Indenture deliver to Holders
a brief report, dated as of such May 15, which complies with the provisions of
such Section 313(a). A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each
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stock exchange, if any, upon which any Notes are listed, with the SEC and with
the Company.
ARTICLE 9
Amendment, Supplement or Waiver
Section 9.01. Without Consent of the Holders. (a) Without the consent of
any Holder, the Company and the Trustee may enter into one or more indentures
supplemental hereto, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to provide for the assumption by a successor of the obligations
of the Company under this Indenture,
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code,
(iv) to add Subsidiary Guarantees with respect to the Notes, to
grant a Lien under this Indenture to the Trustee as security for the Notes,
to confirm and evidence the release, termination or discharge of any
Subsidiary Guarantee or any such Lien with respect to or securing the Notes
when such release, termination or discharge is permitted under this
Indenture,
(v) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the Company,
(vi) to provide for or confirm the issuance of Additional Notes in
accordance with the terms of the Indenture,
(vii) to make any change that does not adversely affect the rights of
any Holder under the Notes or this Indenture, or
(viii) to comply with any requirement of the SEC in connection with
the qualification of this Indenture under the TIA or otherwise.
Section 9.02. With Consent of Holders. (a) Subject to Section 6.07, the
Company, the Trustee and (if applicable) any Subsidiary Guarantor may amend or
supplement this Indenture or the Notes with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes, and any past Default or compliance with any provisions may also be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes.
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(b) Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not (with respect to any Notes held by a non-
consenting Holder):
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note,
(ii) reduce the principal amount of or premium, if any, or interest
or Liquidated Damages, if any, on any Note,
(iii) reduce any amount payable on redemption of the Notes or upon
the occurrence of an Event of Default or reduce the Change of Control
Payment or the amount to be paid in connection with an Asset Sale Offer,
(iv) change the place or currency of payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on any Note,
(v) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Note,
(vi) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend the Indenture,
(vii) waive a default in the payment of principal of or premium, if
any, or interest or Liquidated Damages, if any, on the Notes (except as set
forth in Section 6.04),
(viii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with provisions of the Indenture or for waiver of Defaults,
(ix) modify or change any provision of the Indenture affecting the
ranking of the Notes or the Subsidiary Guarantees in a manner adverse to
the Holders of the Notes,
(x) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture other than in accordance
with the provisions of the Indenture, or amend or modify any provision
relating to such release, or
(xi) directly or indirectly release the Liens created by the
Security Documents on all or substantially all the Collateral (other than
in accordance with the terms of the Existing Credit Facility or the
Security Documents or with the consent of the requisite lenders under the
Existing Credit Facility if, after such consent, the Company is in
compliance with Section 4.12).
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(c) 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.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, 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 supplemental indenture or the effectiveness of any such amendment,
supplement or waiver.
Section 9.03. Execution of Amendments, Supplements or Waivers. The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment, supplement or waiver 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, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by the
Company and that such amendment, supplement or waiver is a valid and binding
agreement of the Company, enforceable against it in accordance with its terms
(subject to customary exceptions).
Section 9.04. Revocation and Effect of Consents. (a) 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 that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 9.04, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Company received by the Trustee or the Company, as the case may be, before the
date on which the Trustee receives an Officer's Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 1.08.
(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (viii) of Section 9.02(b). In that case, the amendment, supplement or
waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of such Note or any Note that evidences all or any part of the
same debt as the consenting Holder's Note.
Section 9.05. Conformity with TIA. (a) Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 9.06. Notation on or Exchange of Notes. (a) If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Company and in accordance with the specific direction of the Company)
request the
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Holder to deliver its Note to the Trustee. The Trustee shall (if required by the
Company and in accordance with the specific written direction of the Company)
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment, supplement or waiver.
ARTICLE 10
Redemption of Notes
Section 10.01. Right of Redemption. The Series A Senior Secured Notes will
be redeemable, in whole, at any time, or in part, from time to time, at the
option of the Company upon not less than 30 nor more than 60 days' notice at a
redemption price equal to the Make-Whole Price.
Section 10.02. Applicability of Article. Redemption or purchase of Notes as
permitted by Section 10.01 shall be made in accordance with this Article 10.
Section 10.03. Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Company of the Notes, the Company shall, at
least 30 days prior to the Redemption Date initially fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed.
Section 10.04. Selection by Trustee of Notes to Be Redeemed. In the case of
any partial redemption, selection of the Notes for redemption will be made not
more than 60 days prior to the Redemption Date by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the applicable Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part.
(a) The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, interest and Liquidated Damages will cease to accrue
on Notes or portions thereof called for redemption.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion of
the principal of such Note that has been or is to be redeemed.
Section 10.05. Notice of Redemption. (a) Notice of redemption or purchase
as provided in Section 10.01 shall be deemed to have been given upon the mailing
by first class mail, postage prepaid, of such notice to each Holder of Notes to
be redeemed, at its
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registered address as recorded in the Register, not later than 30 nor more than
60 days prior to the Redemption Date.
Any such notice shall state:
(i) the expected Redemption Date,
(ii) the Redemption Price,
(iii) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the particular Notes to be redeemed,
(iv) that on the Redemption Date the Redemption Price will become
due and payable upon each such Note to be redeemed, and that, unless the
Company default in making such redemption payment or any Paying Agent is
prohibited from making such payment pursuant to the terms of this
Indenture, interest and Liquidated Damages thereon shall cease to accrue
from and after said date,
(v) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and the name and address of the Paying
Agent or Paying Agents,
(vi) the CUSIP and other security identification numbers, if any,
subject to Section 3.12 hereof, and
(vii) the section of this Indenture pursuant to which the Notes are
to be redeemed.
Notices of redemption may not be conditional.
(b) Notice of such redemption or purchase of Notes to be so redeemed or
purchased at the election of the Company shall be given by the Company or, at
the written request of the Company delivered at least five Business Days prior
to the date proposed for the mailing of such notice, by the Trustee in the name
and at the expense of the Company; provided that such notice to the Trustee may
be revoked by the Company by written notice delivered to the Trustee prior to
the date proposed for the mailing of the notice of such redemption to the
Holders.
(c) The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.
Section 10.06. Deposit of Redemption Price. (a) On or prior to 10:00 a.m.,
New York City time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, the Company
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shall segregate and hold in trust as provided in Section 4.03) an amount of
money sufficient to pay the Redemption Price of, and any accrued and unpaid
interest and Liquidated Damages, if any, on, all the Notes or portions thereof
which are to be redeemed on that date.
Section 10.07. Notes Payable on Redemption Date. (a) Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless Company shall default in
the payment of the Redemption Price or any Paying Agent is prohibited from
paying the Redemption Price pursuant to the terms of this Indenture) such Notes
shall cease to bear interest and Liquidated Damages. Upon surrender of such
Notes for redemption in accordance with such notice, such Notes shall be paid by
the Company at the Redemption Price. Installments of interest and Liquidated
Damages, if any, whose Interest Payment Date is on or prior to the Redemption
Date shall be payable to the Holders of such Notes registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.07.
(b) On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and any accrued and unpaid interest and Liquidated Damages
on Notes called for redemption shall have been made available in accordance with
Section 10.06, the Notes (or the portions thereof) called for redemption will
cease to accrue interest and Liquidated Damages and the only right of the
Holders of such Notes (or portions thereof) will be to receive payment of the
Redemption Price of, and subject to the last sentence of Section 10.07(a), any
accrued and unpaid interest and Liquidated Damages, if any, on such Notes (or
portions thereof) to the Redemption Date. If any Note (or portion thereof)
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
and Liquidated Damages from the Redemption Date at the rate borne by the Note
(or portion thereof).
Section 10.08. Notes Redeemed in Part. Any Note that is to be redeemed only
in part shall be surrendered at a Place of Payment (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, 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 Note so
surrendered.
ARTICLE 11
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharges of Indenture. (a) This Indenture
shall cease to be of further effect (except as to any surviving rights of
transfer or exchange of Notes herein provided for), and the Trustee, on demand
of and at the expense of the
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Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(i) either
(A) all Notes theretofore authenticated and delivered (other
than (y) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 3.06, and (z) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 4.03)
have been delivered to the Trustee canceled or for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee
canceled or for cancellation
(x) have become due and payable, or
(y) will become due and payable at their Stated Maturity
within one year, or
(z) are to be called for redemption within one year under
arrangements 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,
(ii) the Company has irrevocably deposited or caused to be deposited
with the Trustee an amount in United States dollars, U.S. Government
Obligations, or a combination thereof, sufficient to pay and discharge the
entire Indebtedness on such Notes not theretofore delivered to the Trustee
canceled or for cancellation, for principal (and premium, if any) and
interest and Liquidated Damages to the date of such deposit (in the case of
Notes that have become due and payable), or to the Stated Maturity or
Redemption Date, as the case may be;
(iii) the Company has paid or caused to be paid all other sums then
payable hereunder by the Company; and
(iv) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each to the effect that all
conditions precedent provided for in this Section 11.01 relating to the
satisfaction and discharge of this Indenture have been complied with;
provided that any such counsel may rely on any Officer's Certificate as to
matters of fact (including as to compliance with the foregoing clauses (i),
(ii) and (iii)).
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.08 and, if money shall
have been deposited with the Trustee pursuant to clause (ii) of Section
11.01(a), the obligations of the Trustee under Section 11.02, shall survive.
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Section 11.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 4.03, all money deposited with the Trustee pursuant to
Section 11.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest and Liquidated Damages on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE 12
Defeasance and Covenant Defeasance
Section 12.01. Option of the Company to Effect Defeasance or Covenant
Defeasance. The Company may at its option by a Board Resolution, at any time,
elect to have either Section 12.02 or Section 12.03 applied to the Outstanding
Notes upon compliance with the conditions set forth below in this Article 12.
Section 12.02. Legal Defeasance and Discharge. Upon the exercise by the
Company under Section 12.01 of the option applicable to this Section 12.02, the
Company shall be deemed to have been discharged from any and all Obligations
with respect to all Outstanding Notes (and any Subsidiary Guarantor will be
discharged from any and all Obligations in respect of its Subsidiary Guarantee)
on the date which is the 123rd day after the deposit referred to in Section
12.04(a); provided that all of the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 12.05 hereof and the
other Sections of this Indenture referred to in clauses (i) and (ii) of this
Section 12.02, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of Outstanding Notes to receive
solely from the trust fund described in Section 12.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages on such Notes when such payments are
due, (ii) the obligations of the Company with respect to such Notes under
Sections 1.06, 2.03, 3.03, 3.04, 3.05, 3.06, 3.13, 3.14, 4.01, 4.02, 4.03 and
12.05 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.08 hereof, and the obligations of the Company in connection therewith
and with this Article 12. Subject to compliance with this Article 12, the
Company may exercise its option under this Section 12.02 notwithstanding the
prior exercise of its option under Section 12.03 hereof with respect to the
Notes.
Section 12.03. Covenant Defeasance. Upon the exercise by the Company under
Section 12.01 of the option applicable to this Section 12.03, the Company shall
be released from its obligations under the covenants contained in Sections 4.06
through
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Section 4.18, Section 4.22, Article 14 and clause (iv) of Section 5.01(a) hereof
with respect to the Outstanding Notes and no Default under Section 6.01(e), (f)
and (j) shall thereafter constitute a Default or Event of Default on the date
which is the 123rd day after the deposit referred to in Section 12.04(a);
provided that all of the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not Outstanding
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed Outstanding for all other purposes hereunder.
For this purpose, such Covenant Defeasance means that, with respect to the
Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.01(c) or (d), but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby.
Section 12.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 12.02 or Section 12.03
to the Outstanding Notes:
(a) the Company has deposited with the Trustee, in trust, money and/or
U.S. Government Obligations that through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount 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 (i) the principal of, premium, if any, and accrued interest and
Liquidated Damages, if any, on the Notes when such payments are due in
accordance with the terms of this Indenture and the Notes or (ii) in the case of
Legal Defeasance, accrued interest and Liquidated Damages, if any, on the Notes
through a scheduled redemption date and the principal of, and premium on the
Notes on such redemption date; provided that, at the time of deposit, the
Company irrevocably authorize the Trustee to issue a timely notice of redemption
and to take such other steps reasonably requested by the Trustee to ensure that
such redemption will be effectuated;
(b) in the case of an election under Section 12.02, the Company has
delivered to the Trustee (i) either (x) an Opinion of Counsel to the effect that
Holders will not recognize income, gain or loss for Federal income tax purposes
as a result of the exercise by the Company of its option under this Article 12
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, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the Internal Revenue
Service to the same effect unless there has been a change in applicable Federal
income tax law after the date of this Indenture such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the Internal
Revenue Service to the same effect as the aforementioned Opinion of Counsel and
(ii) an Opinion of Counsel to the effect that, as a result of the creation of
the defeasance trust, the Company will not be required to register under the
Investment Company Act of 1940 and after the passage of 123 days following the
deposit, the trust fund will not be subject to the effect of Section
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547 of the United States Bankruptcy Code or Section 15 of the New York Debtor
and Creditor Law or any comparable provision of applicable law;
(c) in the case of an election under Section 12.03, the delivery by the
Company to the Trustee of (i) an Opinion of Counsel to the effect that, among
other things, the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance 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 and defeasance had
not occurred and (ii) an Opinion of Counsel to the effect that, as a result of
the creation of the defeasance trust, the Company will not be required to
register under the Investment Company Act of 1940 and after the passage of 123
days following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law or any comparable provision of applicable law;
(d) immediately after giving effect to such deposit on a pro forma basis,
no Event of Default, or event that after the giving of notice or lapse of time
or both would become an Event of Default, shall have occurred and be continuing
on the date of such deposit or during the period ending on the 123rd day after
the date of such deposit, and such deposit shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound;
(e) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge;
(f) the Company shall have delivered to the Trustee Officer's Certificates
stating that the deposit made by the Company pursuant to its election under
Sections 12.02 or 12.03 was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company with the intent
of defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) the Company shall have delivered to the Trustee Officer's Certificates
and an Opinion of Counsel, each stating that all conditions precedent provided
for relating to either the Legal Defeasance under Section 12.02 or the Covenant
Defeasance under Section 12.03 (as the case may be) have been complied with as
contemplated by this Section 12.04.
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 12.06, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 12.04 in respect of the Outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal of, premium, if any, and interest and Liquidated
Damages, but such money need not be segregated from other funds except to the
extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 12.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article 12 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 12.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
12.04(a) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 12.06. Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest and Liquidated Damages on any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest and Liquidated Damages has become due and payable shall be paid
to the Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 12.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 12.02
or 12.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 12.02 or 12.03 until such time as the Trustee or Paying Agent is
permitted to apply all such amounts in accordance with Section 12.02 or 12.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest and Liquidated Damages on
any Note following the reinstatement of its Obligations, the Company shall be
subrogated to the rights of the Holder of such Note to receive such payment from
the amounts held by the Trustee or Paying Agent.
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ARTICLE 13
Subsidiary Guarantees
Section 13.01. The Guarantees. (a) Subject to the provisions of this
Article 13, each Subsidiary Guarantor hereby irrevocably and unconditionally
guarantees, jointly and severally, the full and punctual payment (whether at
Stated Maturity, upon acceleration, optional redemption, upon repurchase
following a Change of Control Offer or an Asset Sale Offer or otherwise) of the
principal of and premium, if any, and interest and Liquidated Damages, if any,
on, and all other amounts payable under, each Note provided for under this
Indenture, and the full and punctual payment of all other amounts payable by the
Company under this Indenture. Upon failure by the Company to pay punctually any
such amount, each Subsidiary Guarantor shall forthwith on demand pay the amount
not so paid at the place and in the manner specified in this Indenture.
Section 13.02. Guarantee Unconditional. The obligations of the Subsidiary
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall, to the fullest extent permitted by law,
not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Company under this Indenture or any Note, by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this Indenture or
any Note; provided that any such modification which increases the obligations of
each Subsidiary Guarantor hereunder shall not be effective as to such Subsidiary
Guarantor without its consent;
(c) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of the Company or any Subsidiary Guarantor
hereunder;
(d) any change in the corporate existence, structure or ownership of the
Company, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in this Indenture or any
Note;
(e) the existence of any claim, set-off or other rights which the
Subsidiary Guarantors may have at any time against the Company, the Trustee or
any other Person, whether in connection with this Indenture or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the Company
for any reason of this Indenture or any Note, or any provision of applicable law
or regulation purporting to prohibit the payment by the Company of the principal
of or interest and Liquidated Damages on any Note or any other amount payable by
the Company under this Indenture; or
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(g) any other act or omission to act or delay of any kind by the Company,
the Trustee or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of or defense to such Subsidiary Guarantor's obligations hereunder.
Section 13.03. Discharge; Reinstatement. The Subsidiary Guarantors'
obligations hereunder shall remain in full force and effect until the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
and all other amounts payable by the Company under this Indenture shall have
been paid in full. If at any time any payment of the principal of, premium, if
any, or interest and Liquidated Damages, if any, on any Note or any other amount
payable by the Company under this Indenture is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Subsidiary Guarantors' obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
Section 13.04. Waiver by the Subsidiary Guarantors. The Subsidiary
Guarantors irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against the Company or any other Person.
Section 13.05. Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Company under this Article 13, the Subsidiary
Guarantor making such payment shall be subrogated to the rights of the payee
against the Company with respect to such obligation; provided that such
Subsidiary Guarantor shall not enforce either (i) any right to receive payment
by way of subrogation against the Company or against any direct or indirect
security for such obligation, or any other right to be reimbursed, indemnified
or exonerated by or for the account of the Company in respect thereof or (ii)
any right to receive payment, in the nature of contribution or for any other
reason, from any other Subsidiary Guarantor with respect to such payment, in
each case so long as any amount payable by the Company hereunder or under the
Notes remains unpaid.
Section 13.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Company under this Indenture or the Notes
is stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise subject to acceleration under the terms of this Indenture
shall nonetheless be payable by the Subsidiary Guarantors hereunder forthwith on
demand by the Trustee or the Holders.
Section 13.07. Limits of Guarantees. Notwithstanding anything to the
contrary in this Article 13, each Subsidiary Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of state law. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee and this Article 13 shall be limited to the maximum
amount that would not render such Subsidiary Guarantor's obligations subject
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to avoidance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of state law.
Section 13.08. Execution and Delivery of Note Guarantee. To evidence its
Subsidiary Guarantee set forth in Section 13.01, each Subsidiary Guarantor
hereby agrees that this Indenture (or a supplemental indenture in the form of
Exhibit B hereto) shall be executed on behalf of such Subsidiary Guarantor by
one of its Officers.
The signature of an Officer of a Subsidiary Guarantor on the Indenture
shall bind such Subsidiary Guarantor, notwithstanding that such individual has
ceased to hold such office prior to the authentication and delivery of any Note
or did not hold such office at the date of such Note.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
ARTICLE 14
Security Arrangements
Section 14.01. Security. (a) In order to secure the Indenture Obligations
equally and ratably with the Existing Credit Facility Obligations and, with
respect to certain of the Collateral, the Existing ARCO Chemical Debt, the
Company will, and will cause each of its Restricted Subsidiaries named in any
Existing Security Document as a party thereto, to execute and deliver to the
Collateral Agent prior to the Issue Date each Existing Security Document to
which it is a party. The Company and its Restricted Subsidiaries shall comply
with all covenants and agreements contained in the Security Documents the
failure to comply with which would have a material and adverse effect on the
Liens purported to be created thereby, unless such failure to comply is waived
by the requisite lenders under the Existing Credit Facility if, after that
waiver, the Company is in compliance with Section 4.12.
(b) The Trustee and each holder of each Note by its acceptance of that
Note acknowledges and agrees that:
(i) this Indenture, as originally executed and delivered by the
parties hereto, does not create any Lien on any property or securities
which secures the Indenture Obligations or this Indenture;
(ii) the Existing Security Documents, when executed and delivered by
the parties thereto, will comply with the provisions of Section 4.12;
(iii) the Existing Security Documents provide, and any Security
Document that becomes effective after the Issue Date, may provide, that the
Liens created thereby or thereunder automatically will be released and
extinguished with respect to any property or security that is transferred
or otherwise disposed of in accordance with the terms of the Existing
Credit Facility, including any property
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or security that is the subject of a Major Asset Sale and is transferred to
a Subject Asset Transferee;
(iv) without the necessity of any consent of or notice to the
Trustee or any holder of Indenture Obligations, the Company and the
Collateral Agent may amend, modify, supplement or terminate any Security
Document as long as the Company remains in compliance with Section 4.12;
(v) as among the Trustee and the holders of Indenture Obligations
and the lenders under the Existing Credit Facility and the Collateral
Agent, those lenders and the Collateral Agent will have the sole ability to
control and obtain remedies with respect to all Collateral (including on
sale or liquidation of any Collateral after acceleration of the Notes, the
Existing Credit Facility Obligations or the Existing ARCO Chemical Debt)
without the necessity of any consent of or notice to the Trustee or any
such holder;
(vi) any or all Liens granted under the Security Documents for the
benefit of the Holders will be automatically released, without the
necessity of any consent of the Trustee or any Holders, upon a release of
such Lien or Liens pursuant to the terms of the Security Documents and the
Existing Credit Facility or if such release is approved by the requisite
lenders under the Existing Credit Facility.
(vii) the relative rights of the holders of Indenture Obligations and
the holders of Indebtedness or other obligations secured by Liens on the
Collateral are governed by, and are subject to the terms and conditions of,
the Security Documents and not this Indenture; and
(viii) without the necessity of any consent of or notice to the
Trustee or any holder of Indenture Obligations, the Company may, on behalf
of itself or any of its Restricted Subsidiaries, request and instruct the
Collateral Agent to, on behalf of each secured party under the Security
Documents, (A) execute and deliver to the Company, for the benefit of any
Person, such release documents as the Company may reasonably request, of
all liens and security interests held by the Collateral Agent in such
assets, and such Person shall be entitled to rely conclusively on such
release document, and (B) deliver any such assets in the possession of the
Collateral Agent to the Company.
Section 14.02. Notice of Payment, Discharge or Defeasance. The Trustee and
each Holder, by its acceptance of a Note, agree that upon the payment in full or
discharge pursuant to Article 11 of the Indenture Obligations, the Trustee shall
without notice to or consent of any Holder, upon the written request of the
Company, certify to the Collateral Agent, in writing, that the Indenture
Obligations have been paid in full, or that this Indenture has been discharged
in accordance with Article 11.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
LYONDELL CHEMICAL COMPANY
By:
----------------------------
Name:
Title:
LYONDELL CHEMICAL WORLDWIDE, INC.,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
LYONDELL CHEMICAL NEDERLAND, LTD.,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF NOTE]
LYONDELL CHEMICAL COMPANY.
9 5/8% Senior Secured Note, Series A, due 2007
No.________ CUSIP No. __________
$ __________
LYONDELL CHEMICAL COMPANY, a Delaware corporation (the "Company", which
term includes any successor Persons under the Indenture hereinafter referred
to), for value received promises to pay to ___________, or its registered
assigns, the principal sum of __________________________________ Dollars
($___________) [or such other amount as indicated on the Schedule of Exchanges
of Securities attached hereto]/1/, on May 1, 2007.
Interest Rate: 9 5/8% per annum.
Interest Payment Dates: May 1 and November 1 of each year
commencing November 1, 1999.
Regular Record Dates: April 15 and October 15 of each year.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
- ----------------
/1/ To be included in any Global Note
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.
LYONDELL CHEMICAL COMPANY
By:
------------------------------
Name:
Title:
A-2
<PAGE>
(Form of Trustee's Certificate of Authentication)
This is one of the 9 5/8% Senior Secured Notes, Series A, due 2007 referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: ______________ By:_________________________
Authorized Signatory
A-3
<PAGE>
[REVERSE SIDE OF NOTE]
LYONDELL CHEMICAL COMPANY
9 5/8% Senior Secured Note, Series A, due 2007
(1) Principal and Interest. The Company agrees to pay the principal of this
Note on May 1, 2007.
The Company agrees to pay interest on the principal amount of this Note on
each Interest Payment Date, as set forth below, at the rate of 9 5/8% per annum.
Interest will be payable semi-annually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the Regular Record
Date immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing November 1, 1999.
[The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated May 17, 1999, among the Company, the Subsidiary
Guarantors party thereto and the Initial Purchasers named therein (the
"Registration Rights Agreement"). In the event that (i) the Company or the
Subsidiary Guarantors fail to file an Exchange Offer Registration Statement with
the SEC on or prior to the 90th day after the Issue Date, (ii) if the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 210th day after the Issue Date, (iii) if the Exchange Offer is not
consummated on or before the 30th business day after the Exchange Offer
Registration Statement is declared effective, (iv) the Company and the
Subsidiary Guarantors are obligated to file the Shelf Registration Statement and
fail to file the Shelf Registration Statement with the SEC on or prior to the
30th day after such filing obligation arises, (v) the Company and the Subsidiary
Guarantors are obligated to file a Shelf Registration Statement and the Shelf
Registration Statement is not declared effective on or prior to the 60th day
after the obligation to file a Shelf Registration Statement arises, or (vi) if
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is declared effective but thereafter ceases to be effective
or useable in connection with resales of the Notes during the periods specified
in the Registration Rights Agreement, for such time of non-effectiveness or non-
usability (each, a "Registration Default"), the Company and the Subsidiary
Guarantors agree to pay to the Holder of this Note, if affected thereby,
liquidated damages ("Liquidated Damages") in an amount equal to $0.05 per week
per $1,000 in principal amount of this Note for each week or portion thereof
that the Registration Default continues for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of the
Liquidated Damages shall increase by an additional $0.05 per week per $1,000 in
principal amount of Notes with respect to each subsequent 90 day period until
all Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.50 per week per $1,000 in principal amount of Notes. The Company
and the Subsidiary Guarantors shall not be required to pay Liquidated Damages
for more than one
A-4
<PAGE>
Registration Default at any given time. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.]./2/
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]/1/ or, if no interest has been paid, from May 17, 1999; provided that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Regular Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest and Liquidated Damages, to the
extent lawful, at a rate per annum equal to 1% per annum in excess of the rate
of interest applicable to the Notes.
(2) Method of Payment. The Company will pay interest (except defaulted
interest) on the principal amount of the Notes on each May 1 and November 1 to
the Persons who are Holders (as reflected in the Register at the close of
business on the April 15 and October 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is canceled on registration of
transfer or registration of exchange after such Regular Record Date; provided
that, with respect to the payment of principal, the Company will make payment to
the Holder that surrenders this Note to any Paying Agent on or after May 1,
2007.
The Company will pay principal, premium, if any, and interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments
(including principal, premium, if any, and interest and Liquidated Damages, if
any) in respect of the Notes represented by the Global Notes, the Holders of
which have given wire transfer instructions on or prior to the relevant record
date, shall be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Physical Notes,
the Company will make all payments of principal, premium, if any, and interest
and Liquidated Damages, if any, at the office or agency maintained by the
Company for such purposes in The City of New York or, at the Company's option,
by mailing a check to each such Holder's registered address. If a payment date
is a date other than a Business Day, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
(3) Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar upon
written notice thereto. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-registrar.
(4) Indenture; Limitations. The Company issued the Notes under an Indenture
dated as of May 17, 1999 (the "Indenture"), among the Company, the Subsidiary
- ----------------
/2/ Include only for Initial Note.
A-5
<PAGE>
Guarantors and The Bank of New York, as trustee (the "Trustee"). Capitalized
terms herein are used as defined in the Indenture unless otherwise indicated.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (the "TIA").
The Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture shall control.
The Notes are secured senior obligations of the Company. The Indenture
limits the initial aggregate principal amount of the Notes to $900,000,000 but
permits the issuance of Additional Notes subject to compliance with the
covenants contained in the Indenture and except as may be limited by applicable
law; provided that the aggregate principal amount of Senior Secured Notes
outstanding at any time shall not exceed $1.9 billion.
(5) Optional Redemption. The Series A Senior Secured Notes will be
redeemable, in whole, at any time, or in part, from time to time, at the option
of the Company upon not less than 30 nor more than 60 days' notice at a
redemption price equal to the Make-Whole Price (as defined in the Indenture).
If less than all the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided that
no Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest and
Liquidated Damages, if any, cease to accrue on Notes or portions of them called
for redemption.
(6) Repurchase upon a Change in Control and Sale of Assets. Upon the
occurrence of (a) a Change in Control, each Holder shall have the right to
require that the Company repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase and (b) an Asset Sale, the Company may be obligated to make an offer to
purchase on a pro rata basis from the Holders the Notes with the Excess Proceeds
of such Asset Sales at a purchase price equal to 100% of the principal amount of
such Notes plus accrued interest and Liquidated Damages, if any, to the date of
purchase.
(7) Denominations; Transfer; Exchange. The Notes are in fully registered
form without coupons, in denominations of $1,000 and any integral multiples of
$1,000.
A-6
<PAGE>
A Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture.
(8) Persons Deemed Owners. A Holder may be treated as the owner of a Note
for all purposes.
(9) Unclaimed Money. If money for the payment of principal, premium, if
any, or interest and Liquidated Damages, if any, remains unclaimed for two
years, the Trustee and the Paying Agent will pay the money back to the Company
at its written request. After that, Holders entitled to the money must look to
the Company for payment, unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
(10) Discharge Prior to Redemption or Maturity. If the Company irrevocably
deposits, or causes to be deposited, with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of and premium, if
any, and accrued interest and Liquidated Damages on the Notes (a) to redemption
or maturity, the Company will be discharged from the Indenture and the Notes,
except in certain circumstances for certain sections thereof, and (b) to
redemption or maturity, the Company will be discharged from certain covenants
set forth in the Indenture.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
Outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend the Indenture or the Notes to the extent
set forth in the Indenture.
(12) Restrictive Covenants. The Indenture contains certain covenants,
including, without limitation, covenants with respect to the following matters:
(i) Indebtedness; (ii) Restricted Payments; (iii) distributions from Restricted
Subsidiaries and Joint Ventures; (iv) sales of assets; (v) transactions with
Affiliates; (vi) Liens; (vii) No Amendments to Subordination Provisions; (viii)
repurchase of Notes upon a Change in Control; (ix) Sale and Leaseback
Transactions; (x) Subsidiary Guarantees; and (xi) consolidation, merger and sale
of assets. Within 120 days after the end of each fiscal year, the Company must
report to the Trustee on compliance with such limitations.
(13) Successor Persons. When a successor person or other entity (other than
a Subsidiary of the Company) assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor person will be released from
those obligations.
(14) Remedies for Events of Default. If an Event of Default (other than an
Event of Default specified in Section 6.01(g) or (h) of the Indenture that
occurs with respect to the Company or a Subsidiary Guarantor) occurs and is
continuing under this Indenture, then in every such case the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes,
by written notice to the Company (and to the Trustee if
A-7
<PAGE>
such notice is given by the Holders), may, and the Trustee at the written
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest and Liquidated Damages, if any, on all of the Outstanding Notes
to be immediately due and payable. Upon a declaration of acceleration, such
principal of, premium, if any, and accrued interest and Liquidated Damages, if
any, shall be immediately due and payable. If an Event of Default specified in
Section 6.01(g) or (h) of the Indenture occurs with respect to the Company or a
Subsidiary Guarantor, the principal of, premium, if any, and accrued interest
and Liquidated Damages, if any, on the Outstanding Notes shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes by written notice to the
Company and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences if (1) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the Notes that have become due
solely by such declaration of acceleration, have been cured or waived and (2)
the recission would not conflict with any judgment or decree of a court of
competent jurisdiction.
Holders may not enforce the Indenture, the Notes or the Subsidiary
Guarantees except as provided in the Indenture. The Trustee may require security
or indemnity satisfactory to it before it enforces the Indenture, the Notes or
the Subsidiary Guarantees. The Holders of at least a majority in aggregate
principal amount of the Notes then Outstanding may direct the Trustee in the
exercise of any trust or power in accordance with the terms of the Indenture.
(15) Security. In order to secure the Indenture Obligations, the Company
and certain of its Restricted Subsidiaries have entered into the Security
Documents. The Indenture Obligations shall be secured by Liens on the Collateral
in accordance with the terms and provisions of the Security Documents. The
Indenture requires that Holders of the Notes be granted a lien equally and
ratably with any lien granted on additional assets to secure the holders of
Existing Credit Facility Obligations subsequent to the Issue Date. Each Holder
of this Note, by accepting the same, agrees that (i) the Existing Security
Documents provide, and any Security Document that becomes effective after the
Issue Date, may provide, that the Liens created thereby or thereunder
automatically will be released and extinguished with respect to any property or
security that is transferred or otherwise disposed of in accordance with the
terms of the Existing Credit Facility, including any property or security that
is the subject of a Major Asset Sale and is transferred to a Subject Asset
Transferee; (ii) without the necessity of any consent of or notice to the
Trustee or any holder of Indenture Obligations, the Company and the Collateral
Agent may amend, modify, supplement or terminate any Security Document as long
as the Company remains in compliance with the Indenture; (iii) as among the
Trustee and the holders of Indenture Obligations and the lenders under the
Existing Credit Facility and the Collateral Agent, those lenders and the
Collateral Agent will have the sole ability to control and obtain remedies with
respect to all Collateral (including on sale or liquidation of any Collateral
after acceleration of the Notes, the Existing Credit Facility Obligations or the
Existing ARCO Chemical Debt) without the necessity of any consent of or notice
to the Trustee or any such holder; (iv) any or all Liens granted under the
Security Documents for the benefit of the Holders will be automatically
released, without the necessity of any consent of the Trustee or the Holders,
upon a release of such Lien or
A-8
<PAGE>
Liens pursuant to the terms of the Security Documents and the Existing Credit
Facility or if such release is approved by the requisite lenders under the
Existing Credit Facility; (v) the relative rights of the holders of Indenture
Obligations and the holders of Indebtedness or other obligations secured by
Liens on the Collateral are governed by, and are subject to the terms and
conditions of, the Security Documents and not this Indenture; and (vi) without
the necessity of any consent of or notice to the Trustee or any holder of
Indenture Obligations, the Company may, on behalf of itself or any of its
Restricted Subsidiaries, request and instruct the Collateral Agent to, on behalf
of each secured party under the Security Documents, (A) execute and deliver to
the Company, for the benefit of any Person, such release documents as the
Company may reasonably request, of all liens and security interests held by the
Collateral Agent in such assets, and such Person shall be entitled to rely
conclusively on such release document, and (B) deliver any such assets in the
possession of the Collateral Agent to the Company. From and after the date when
all liens granted in favor of the holders of Existing Credit Facility
Obligations are released, the provisions regarding security described above will
no longer apply.
(16) Subsidiary Guarantees. Each Subsidiary Guarantor irrevocably and
unconditionally guarantees, jointly and severally, on a senior basis, the full
and punctual payment (whether at Stated Maturity, upon acceleration, optional
redemption, upon repurchase following a Change of Control Offer or an Asset Sale
Offer or otherwise) of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on, and all other amounts payable under, this Note
provided for under this Indenture, and the full and punctual payment of all
other amounts payable by the Company under the Indenture; provided that,
notwithstanding anything to the contrary herein, the aggregate amount of the
Obligations guaranteed under the Indenture by any Subsidiary Guarantor shall be
limited in amount to the maximum amount that would not render such Subsidiary
Guarantor's obligations subject to avoidance under the applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law.
(17) Additional Subsidiary Guarantees. If any of the Company's Restricted
Subsidiaries shall Guarantee or secure the payment of any other Indebtedness of
the Company or any of its Restricted Subsidiaries, then, subject to certain
exceptions specified in the Indenture, such Restricted Subsidiary shall become a
Subsidiary Guarantor by executing a supplemental indenture.
(18) Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may make loans to, accept deposits from, perform services for, and otherwise
deal with, the Company and its Affiliates as if it were not the Trustee.
(19) Authentication. This Note shall not be valid until the Trustee signs
the certificate of authentication on this Note.
(20) Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
A-9
<PAGE>
(21) Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any principles of conflict of laws to the extent that the application
of the law of another jurisdiction is required thereby.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to the Company, One Houston
Center, Suite 700, 1221 McKinney, Houston, Texas 77010; Attention: General
Counsel.
A-10
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
____________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
____________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
____________________________________________________________
attorney to transfer such Note on the books of the Company with full power
of substitution in the premises.
A-11
<PAGE>
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES BEARING A PRIVATE PLACEMENT LEGEND]
In connection with any transfer of this Note occurring prior to
______________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
Check One
(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder. [_]
(b) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144
thereunder. [_]
(c) this Note is being transferred to the Company. [_]
or
(d) this Note is being transferred other than in accordance with (a), (b)
or (c) above and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture. [_]
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Sections 3.13 and 3.14 of the Indenture
shall have been satisfied.
Date:_________________
_______________________ NOTICE: The signature to this assignment
must correspond with the name as
written upon the face of the within
-mentioned instrument in every
particular, without alteration or
any change whatsoever.
Signature Guarantee: _______________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-12
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________
______________________________________
To be executed by an executive officer
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.09 or Section 4.14 of the Indenture, check the box: [_]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.09 or Section 4.14 of the Indenture, state the amount (in
original principal amount) below:
$_____________________.
Date:____________
Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-14
<PAGE>
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges of a part of this Global Note for Physical Notes or a
part of another Global Note have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Principal amount of
this Global Note
Amount of decrease Amount of increase following such Signature of
in principal amount in principal amount decrease (or authorized officer of
Date of Exchange of this Global Note of this Global Note increase) Trustee
</TABLE>
A-15
<PAGE>
EXHIBIT B
SUPPLEMENTAL INDENTURE
dated as of __________, ____
among
LYONDELL CHEMICAL COMPANY,
as Company
[SUBSIDIARY GUARANTORS]
and
THE BANK OF NEW YORK,
as Trustee
-------------------
9 5/8% Senior Secured Notes, Series A, due 2007
<PAGE>
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into
as of __________, ____, among LYONDELL CHEMICAL COMPANY., a Delaware corporation
(the "Company") [insert each Subsidiary Guarantor executing this Supplemental
Indenture and its jurisdiction of incorporation] (each an "Undersigned") and THE
BANK OF NEW YORK, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, the Subsidiary Guarantors party thereto and the
Trustee entered into the Indenture, dated as of May 17, 1999 (the "Indenture"),
relating to the Company's 9 5/8% Senior Secured Notes, Series A, due 2007 (the
"Notes");
WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Company agreed, subject to certain
exceptions, pursuant to Section 4.22 of the Indenture to cause any Restricted
Subsidiary that has guaranteed or secured Indebtedness of the Company or any of
its Restricted Subsidiaries to provide Subsidiary Guarantees.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties hereto hereby
agree as follows:
Section 1. Capitalized terms used herein and not otherwise defined herein
are used as defined in the Indenture.
Section 2. Each Undersigned, by its execution of this Supplemental
Indenture, agrees to be a Subsidiary Guarantor under the Indenture and to be
bound by the terms of the Indenture applicable to Subsidiary Guarantors,
including, but not limited to, Article 13 thereof.
Section 3. This Supplemental Indenture shall be governed by and construed
in accordance with the internal laws of the State of New York.
Section 4. This Supplemental Indenture may be signed in various
counterparts which together shall constitute one and the same instrument.
Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and said Indenture and this Supplemental Indenture shall henceforth be
read together.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto duly
authorized, as of the day and year first above written.
LYONDELL CHEMICAL COMPANY
B-2
<PAGE>
By:
-----------------------------
Name:
Title:
[SUBSIDIARY GUARANTORS]
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------
Name:
Title:
B-3
<PAGE>
CROSS-REFERENCE TARGET LIST
===========================
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part of this
document and may be discarded.)
<TABLE>
<CAPTION>
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=================================== ==================================== =====================================
<S> <C> <C>
1 .................definitions.prov 5.03(a) ...............no.mat.sub.ob 12.07 ..................reinstatement
1.01 ...................definitions 5.03(b) .............guar.exceptions
1.02 .............definitions.other 13 ..........................sub.guar
1.03 ............construction.rules 6 ..........................remedies 13.01 ..........................guars
1.04 .................reference.tia 6.01 .................events.default
1.05 ..................conflict.tia 6.01(c) ..................noncomp.is 4.12 .............equal.ratable.liens
1.06 ....................compliance 6.01(e) ............events.default.e 4.12(a) .........extent.comp.restrict
1.07 .....................form.docs 6.01(g) ..........court.having.juris
1.08 ..........................acts 6.01(h) ..............co.or.sig.subs ? ......................subordination
1.08(b) ..............fact and date 6.02 ..........................accel ? .......................liq.dis.bank
1.08(e) ...........may set any date 6.04 ........waiver of past defaults ? ..............default.senior.indebt
1.09 ...............notices.trustee 6.05 ...............control.majority ? ..................distrib.paid.over
1.10 ...............notices.holders 6.06 ............limitation.on.suits ? .............................notice
1.11 ...........................toc 6.06(b) ....................writ.req ? ...........no.rgt.holder.sen.indebt
1.12 ............successors.assigns 6.07 .................rights.rec.pay
1.13 ...........separability.clause 6.10 .....................priorities
1.14 ............benefits.indenture 6.11 .........................undert
1.15 .................governing.law 6.12 ....................restoration
1.16 ................legal.holidays 6.13 .....................cumulative
1.17 ............personal.liability 6.14 ....................waiver.stay
1.18 ............exhibits.schedules
1.19 ..................counterparts 7 ...........................trustee
7.01 .................certain.duties
2 .......................note.forms 7.02 ................notice.defaults
2.01 ...............forms.generally 7.03 ................rights.trustees
2.03 ...........restrictive.legends 7.04 .......................recitals
2.03(a) ........................ppl 7.06 .....................hold.notes
7.07 .....................held.trust
3 ............................notes 7.08 ..................reimbursement
3.01 ...................title.terms 7.09 ..........conflicting.interests
3.02 .................denominations 7.10 ...............trustee.required
3.03 ...............delivery.dating 7.11 ........................removal
3.04 ...............temporary.notes 7.12 ....................appointment
3.05 .............transfer.exchange 7.13 .........................merger
3.06 ..................stolen.notes 7.14 .........................claims
3.07 ..............rights.preserved 7.15 ...........authenticating.agent
3.08 .................deemed.owners
3.09 ..................cancellation 8.01 ..............addresses.holders
3.10 ..........computation.interest 8.02 ..............preservation.info
3.12 .................cusip.numbers 8.03 ................reports.trustee
3.13 ....................book.entry
3.14 ...........transfer.provisions 9 ........................amend.supp
9.01 ................without.consent
4 ........................covenants 9.02 ...................with.consent
4.01 .......................premium 9.03 ......................execution
4.01(b) .................notes.wire 9.04 .....................revocation
4.02 .................office.agency 9.05 .................conformity.tia
4.03 ................money.payments 9.06 .......................notation
4.04 ...................SEC.reports
4.04(a) ............reports.so.long 10 .......................redemption
4.05 .......certificates to trustee 10.01 ..............right.redemption
4.06 ....................limitation ? ..................redeemable.notes
4.06(a) ..........limitation.indebt 10.02 .................applicability
4.07 ...........restricted.payments 10.04 ..........selection by trustee
4.07(a) ..........restricted.basket 10.05 .............notice.redemption
4.08 .......restricted.subsidiaries 10.06 ............deposit.redemption
4.09 ..............subsidiary.stock 10.07 ..................note.payable
4.09(b) .............asset.reinvest 10.07(a) .................note.redem
4.10 ..............trans.affiliates 10.08 ................notes.redeemed
4.10(a) ...........Company will not
4.11 ..............limitation.liens 11 .....................satisfaction
4.13 ...............note.guarantors 11.01 .......satisfaction.discharges
4.14 ................change.control 11.02 ...................trust.money
4.16 .................line.business
4.17 .....................accts.rec 12 .......................defeasance
4.18 ........................sunset 12.01 ........comp.option.defeasance
4.22 .....................guarantee 12.02 ..........defeasance;discharge
12.03 .......................cov.def
5 ................consol.merger.art 12.04 ...............con.leg.cov.def
5.01 .............consol.merger.sec 12.04(a) ..cond.to.legal.def.deposit
5.01(a) ............consol.merger.a 12.05 ..............depo.mon.gov.sec
5.02 ...........Company.substituted 12.06 ..................repay.to.com
5.03 ......................cons.mer
</TABLE>
B-2
<PAGE>
LYONDELL CHEMICAL COMPANY,
the SUBSIDIARY GUARANTORS party hereto
and
THE BANK OF NEW YORK,
as Trustee
______________
INDENTURE
Dated as of May 17, 1999
______________
9 7/8% Senior Secured Notes, Series B, Due 2007
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions................................................. 1
Section 1.02. Other Definitions........................................... 29
Section 1.03. Rules of Construction....................................... 30
Section 1.04. Incorporation by Reference of TIA........................... 30
Section 1.05. Conflict with TIA........................................... 31
Section 1.06. Compliance Certificates and Opinions........................ 31
Section 1.07. Form of Documents Delivered to Trustee...................... 32
Section 1.08. Acts of Noteholders; Record Dates........................... 32
Section 1.09. Notices, Etc., to Trustee and Company....................... 34
Section 1.10. Notices to Holders; Waivers................................. 35
Section 1.11. Effect of Headings and Table of Contents.................... 35
Section 1.12. Successors and Assigns...................................... 35
Section 1.13. Separability Clause......................................... 35
Section 1.14. Benefits of Indenture....................................... 35
Section 1.15. Governing Law............................................... 35
Section 1.16. Legal Holidays.............................................. 36
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders............................ 36
Section 1.18. Exhibits and Schedules...................................... 36
Section 1.19. Counterparts................................................ 36
ARTICLE 2
Note Forms
Section 2.01. Forms Generally............................................. 36
Section 2.02. Form of Trustee' Certificate of Authentication.............. 37
Section 2.03. Restrictive Legends......................................... 38
ARTICLE 3
The Notes
Section 3.01. Title and Terms............................................. 39
Section 3.02. Denominations............................................... 40
Section 3.03. Execution, Authentication and Delivery and Dating........... 40
Section 3.04. Temporary Notes............................................. 41
Section 3.05. Registration, Registration of Transfer and Exchange......... 42
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes................. 42
Section 3.07. Payment of Interest Rights Preserved........................ 43
Section 3.08. Persons Deemed Owners....................................... 44
Section 3.09. Cancellation................................................ 44
Section 3.10. Computation of Interest..................................... 45
<PAGE>
PAGE
----
Section 3.11. Payment of Liquidated Damages............................... 45
Section 3.12. CUSIP Numbers............................................... 45
Section 3.13. Book-entry Provisions for Global Notes...................... 45
Section 3.14. Transfer Provisions......................................... 46
ARTICLE 4
Covenants
Section 4.01. Payment of Principal, Premium and Interest.................. 50
Section 4.02. Maintenance of Office or Agency............................. 50
Section 4.03. Money for Payments to Be Held in Trust...................... 50
Section 4.04. SEC Reports................................................. 52
Section 4.05. Certificates to Trustee..................................... 52
Section 4.06. Limitation on Indebtedness.................................. 53
Section 4.07. Limitation on Restricted Payments........................... 57
Section 4.08. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries and Joint Ventures...... 63
Section 4.09. Limitation on Sales of Assets............................... 66
Section 4.10. Limitation on Affiliate Transactions........................ 68
Section 4.11. Limitation on Liens......................................... 69
Section 4.12. Equal and Ratable Liens..................................... 70
Section 4.13. No Amendment to Subordination Provisions.................... 70
Section 4.14. Repurchase of Notes upon a Change in Control................ 70
Section 4.15. Limitation on Sale and Leaseback Transactions............... 71
Section 4.16. Limitation on Line of Business.............................. 71
Section 4.17. Limitation on Accounts Receivable Facilities................ 71
Section 4.18. Limited Applicability of Covenants when Notes are rated
Investment-Grade.......................................... 71
Section 4.19. Existence................................................... 72
Section 4.20. Payment of Taxes and Other Claims........................... 72
Section 4.21. Maintenance of Properties and Insurance..................... 72
Section 4.22. Limitation on Issuance of Guarantees by Restricted
Subsidiaries.............................................. 73
Section 4.23. Payments for Consents....................................... 73
ARTICLE 5
Consolidation, Merger or Sale of Assets
Section 5.01. Consolidation, Merger or Sale of Assets by the Company...... 74
Section 5.02. Successor Company Substituted............................... 75
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor................................................. 75
Section 5.04. Opinion of Counsel to Trustee............................... 76
ii
<PAGE>
PAGE
----
ARTICLE 6
Remedies
Section 6.01. Events of Default........................................... 76
Section 6.02. Acceleration................................................ 78
Section 6.03. Other Remedies.............................................. 78
Section 6.04. Waiver of Past Defaults..................................... 78
Section 6.05. Control by Majority......................................... 79
Section 6.06. Limitation on Suits......................................... 79
Section 6.07. Rights of Holders to Receive Payment........................ 79
Section 6.08. Collection Suit by Trustee.................................. 79
Section 6.09. Trustee May File Proofs of Claim............................ 80
Section 6.10. Priorities.................................................. 80
Section 6.11. Undertaking for Costs....................................... 81
Section 6.12. Restoration of Rights and Remedies.......................... 81
Section 6.13. Rights and Remedies Cumulative.............................. 81
Section 6.14. Waiver of Stay, Extension or Usury Laws..................... 81
ARTICLE 7
The Trustee
Section 7.01. Certain Duties and Responsibilities......................... 82
Section 7.02. Notice of Defaults.......................................... 82
Section 7.03. Certain Rights of Trustees.................................. 83
Section 7.04. Not Responsible for Recitals or Issuance of Notes........... 84
Section 7.05. Trustee's Disclaimer........................................ 84
Section 7.06. May Hold Notes.............................................. 84
Section 7.07. Money Held in Trust......................................... 84
Section 7.08. Compensation and Reimbursement.............................. 85
Section 7.09. Conflicting Interests....................................... 85
Section 7.10. Corporate Trustee Required; Eligibility..................... 85
Section 7.11. Resignation and Removal; Appointment of Successor........... 86
Section 7.12. Acceptance of Appointment by Successor...................... 87
Section 7.13. Merger, Conversion, Consolidation or Succession to Business. 87
Section 7.14. Preferential Collection of Claims Against the Company....... 88
Section 7.15. Appointment of Authenticating Agent......................... 88
ARTICLE 8
Holders' List and Reports by Trustee and the Company
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing........................... 88
Section 8.02. Preservation of Information; Communications to Holders...... 88
Section 8.03. Reports by Trustee.......................................... 89
iii
<PAGE>
PAGE
----
ARTICLE 9
Amendment, Supplement or Waiver
Section 9.01. Without Consent of the Holders.............................. 89
Section 9.02. With Consent of Holders..................................... 90
Section 9.03. Execution of Amendments, Supplements or Waivers............. 91
Section 9.04. Revocation and Effect of Consents........................... 92
Section 9.05. Conformity with TIA......................................... 92
Section 9.06. Notation on or Exchange of Notes............................ 92
ARTICLE 10
Redemption of Notes
Section 10.01. Right of Redemption........................................ 92
Section 10.02. Applicability of Article................................... 93
Section 10.03. Election to Redeem; Notice to Trustee...................... 93
Section 10.04. Selection by Trustee of Notes to Be Redeemed............... 93
Section 10.05. Notice of Redemption....................................... 93
Section 10.06. Deposit of Redemption Price................................ 95
Section 10.07. Notes Payable on Redemption Date........................... 95
Section 10.08. Notes Redeemed in Part..................................... 95
ARTICLE 11
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharges of Indenture................... 96
Section 11.02. Application of Trust Money................................. 97
ARTICLE 12
Defeasance and Covenant Defeasance
Section 12.01. Option of the Company to Effect Defeasance or Covenant
Defeasance............................................... 97
Section 12.02. Legal Defeasance and Discharge............................. 97
Section 12.03. Covenant Defeasance........................................ 98
Section 12.04. Conditions to Legal or Covenant Defeasance................. 98
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions.................... 100
Section 12.06. Repayment to Company....................................... 100
Section 12.07. Reinstatement.............................................. 101
ARTICLE 13
Subsidiary Guarantees
Section 13.01. The Guarantees............................................. 101
Section 13.02. Guarantee Unconditional.................................... 101
Section 13.03. Discharge; Reinstatement................................... 102
iv
<PAGE>
PAGE
----
Section 13.04. Waiver by the Subsidiary Guarantors........................ 102
Section 13.05. Subrogation and Contribution............................... 102
Section 13.06. Stay of Acceleration....................................... 103
Section 13.07. Limits of Guarantees....................................... 103
Section 13.08. Execution and Delivery of Note Guarantee................... 103
ARTICLE 14
Security Arrangements
Section 14.01. Security................................................... 103
Section 14.02. Notice of Payment, Discharge or Defeasance................. 105
EXHIBIT A - Form of Note
EXHIBIT B - Form of Supplemental Indenture
v
<PAGE>
INDENTURE, dated as of May 17, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), among LYONDELL CHEMICAL COMPANY, a
Delaware corporation (as further defined below, the "Company"), the Subsidiary
Guarantors party hereto and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company and the Subsidiary Guarantors have duly authorized the
execution and delivery of this Indenture to provide for the issuance of (i)
initially, $1,000,000,000 aggregate principal amount of 9 7/8% Senior Secured
Notes, Series B, due 2007 of the Company (the "Initial Notes" and, together with
any Exchange Notes issued in respect thereof, the "Original Notes") and (ii) if
and when issued, additional 9 7/8% Senior Secured Notes, Series B, due 2007 of
the Company (the "Initial Additional Notes" and, together with any Exchange
Notes issued in respect thereof, the "Additional Notes") issuable as provided in
this Indenture, in each case, guaranteed to the extent provided herein and in
the Notes by the Subsidiary Guarantors. All things necessary to make the
Original Notes, when duly issued, executed and delivered by the Company and
authenticated and delivered by the Trustee hereunder, the valid obligation of
the Company, and to make this Indenture a valid agreement of the Company and the
Subsidiary Guarantors as of the date hereof, in accordance with the terms of the
Original Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the equal and ratable benefit of
all Holders, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.
"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of the
Company (i) which is formed solely for the purpose of, and which engages in no
activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries, (ii) which is
designated by the Company as an Accounts Receivables Subsidiary pursuant to an
Officer's Certificate delivered to the Trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which (a) is at any time
recourse to or obligates the Company or any Restricted Subsidiary in any way, or
subjects any property or asset of the Company or any Restricted Subsidiary,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to (I) representations, warranties and covenants (or, any
indemnity with respect to such representations, warranties and covenants)
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable to such
<PAGE>
Accounts Receivable Subsidiary or (II) any guarantee of any such accounts
receivable financing by the Company or any Restricted Subsidiary that is
permitted to be incurred pursuant to Section 4.06, (iv) with which neither the
Company nor any Restricted Subsidiary of the Company has any contract,
agreement, arrangement or understanding other than contracts, agreements,
arrangements and understandings entered into in the ordinary course of business
in connection with the sale (including a sale in exchange for a promissory note
of or Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable in accordance with Section 4.17 and fees payable in the ordinary
course of business in connection with servicing accounts receivable and (v) with
respect to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation (a) to subscribe for additional shares of Capital
Stock or other Equity Interests therein or make any additional capital
contribution or similar payment or transfer thereto other than in connection
with the sale (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable to such
Accounts Receivable Subsidiary in accordance with Section 4.17 or (b) to
maintain or preserve the solvency, any balance sheet term, financial condition,
level of income or results of operations thereof.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquired Disqualified Stock" means, with respect to any specified Person,
Disqualified Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Disqualified Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquiring Person" means a Person other than a Subject Assets Transferee
which acquires (i) all or a portion of the Subject Assets or (ii) an interest in
a Subject Assets Transferee in connection with a Major Asset Sale.
"Additional Notes" means any notes issued under this Indenture in addition
to the Original Notes, including any Exchange Notes issued in exchange therefor
having the same terms in all respects (or in all respects except payment of
interest (i) scheduled and paid prior to the date of issuance of such notes or
(ii) payable on the first Interest Payment Date following such date of
issuance).
"Adjusted Consolidated Cash Flow" means, for any period, the sum of
Consolidated Cash Flow of the Company for such period plus the aggregate
Distributable
2
<PAGE>
Joint Venture Cash Flow of the Company and its Restricted Subsidiaries,
determined on a consolidated basis, for such period.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control; provided further that the foregoing proviso shall not
apply for purposes of Section 4.07(b)(vii) and Section 4.07(b)(ix) and clause
(d) of the definition of "Unrestricted Subsidiary".
"ARCO Chemical" means Lyondell Chemical Worldwide, Inc., a Delaware
corporation formerly named ARCO Chemical Company.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets other than the disposition of
inventory, equipment or Cash Equivalents in the ordinary course of business
consistent with past practices (provided that the sale, conveyance or other
disposition of all or substantially all the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of
Section 4.14 and/or the provisions of Section 5.01 and not by the provisions of
Section 4.09), (ii) the sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance
by any of the Company's Restricted Subsidiaries of Equity Interests of such
Restricted Subsidiary, in the case of clauses (i), (ii) or (iii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $25 million or (b) for Net Proceeds in excess of $25
million. Notwithstanding the foregoing: (a) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (b) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a
Restricted Payment that is permitted by Section 4.07; (d) an issuance of
Preferred Stock by a Finance Subsidiary that is permitted by Section 4.06; (e)
sales (including a sale in exchange for a promissory note of or Equity Interest
in such Accounts Receivable Subsidiary) of accounts receivable to an Accounts
Receivable Subsidiary in connection with any Receivables Facility permitted by
Section 4.17; and (f) Sale and Leaseback Transactions will not be deemed to be
an Asset Sale.
"Asset Sale Lien" means a Lien on the Subject Assets (including as a Lien
for this purpose contractual rights with respect to the operation of the Subject
Assets) arising in connection with a Major Asset Sale in favor of the Acquiring
Person (or an Affiliate thereof) which Lien does not secure any Indebtedness.
"Attributable Debt" in respect of a Sale and Leaseback Transaction that is
treated as a capital lease in accordance with GAAP means, at the time of
determination, the present value (discounted at the rate of interest implicit in
such transaction, determined in accordance with GAAP) of the obligation of the
lessee for net rental payments during
3
<PAGE>
the remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 7.15 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board of directors.
"Board Resolution" means, with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have been
duly adopted by the board of directors (or any committee thereof) of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Trustee. Unless the context otherwise requires, "Board
Resolution" refers to a Board Resolution of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on which
commercial banks in The City of New York or Houston, Texas are authorized by law
to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (c) demand deposits, time deposits
and certificates of deposit with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year from
the date of acquisition and overnight bank deposits, in each case with any bank
or trust company organized or licensed under the laws of the United States or
any State thereof having capital, surplus and undivided profits in excess of
$500 million, (d) repurchase obligations with a term of not more than seven days
for underlying securities of the type described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in clause (c) above, (e) commercial paper rated at least P-1 or A-1 by Moody's
or S&P, respectively, and in each case maturing within six months after the date
of acquisition, (f) any fund investing exclusively in investments of the type
described in clauses (a) through (e) above and (g) in the case of a Foreign
Subsidiary, substantially similar investments denominated in foreign currencies
(including similarly capitalized foreign banks).
4
<PAGE>
"Change of Control" means the occurrence of any of the following: (i) the
sale, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all the assets of the Company and its
Subsidiaries taken as a whole to any Person or group (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a Person or
group who, prior to such transaction, held a majority of the voting power of the
voting stock of the Company, (ii) the acquisition by any Person or group (as
defined above) of a direct or indirect interest in more than 50% of the voting
power of the voting stock of the Company, by way of merger or consolidation or
otherwise, or (iii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all assets of the Company and its Restricted Subsidiaries
which are subject to Liens pursuant to the terms and provisions of the Security
Documents in order to secure the Indenture Obligations equally and ratably with
the Existing Credit Facility Obligations.
"Collateral Agent" means Morgan Guaranty Trust Company of New York, as
collateral agent, or any other collateral agent under any or all of the Security
Documents.
"Company" means Lyondell Chemical Company, a Delaware corporation, and any
successor in interest thereto.
"Company Request," "Company Order" and "Company Consent" mean, respectively,
a written request, order or consent signed in the name of the Company by an
Officer of the Company.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period (less the Net Income
of any Joint Venture to the extent included therein pursuant to clause (i) of
the definition of "Consolidated Net Income"), plus in each case, without
duplication
(i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period (including any provision for taxes on
the Net Income of any Joint Venture that is a pass-through entity for federal
income tax purposes, to the extent such taxes are paid or payable by such Person
or any of its Restricted Subsidiaries), to the extent that such provision for
taxes was included in computing such Consolidated Net Income,
(ii) the Fixed Charges of such Person and its Restricted Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in computing
such Consolidated Net Income,
(iii) depreciation and amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) of such Person and its Restricted Subsidiaries for
such period to the extent that such depreciation and amortization were deducted
in computing such Consolidated Net Income and
5
<PAGE>
(iv) any non-cash charges reducing Consolidated Net Income for such period
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period); minus
(v) any non-cash items increasing Consolidated Net Income for such period,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that
(i) the Net Income of any Person that is not a Restricted Subsidiary shall
be included only to the extent of the lesser of (x) the amount of dividends or
distributions paid in cash (but not by means of a loan) to the referent Person
or a Restricted Subsidiary thereof or (y) the referent Person's (or a Restricted
Subsidiary of the referent Person's) proportionate share of the Net Income of
such other Person,
(ii) the Net Income (but not loss) of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and
(iv) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its Restricted Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of Preferred Stock (other than Disqualified Stock), less all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of tangible assets of a going concern business made in accordance with GAAP as a
result of the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person, and excluding the cumulative effect of a change in
accounting principles, all as determined in accordance with GAAP.
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"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election or any successor Continuing Directors appointed by such
Continuing Directors (or their successors).
"Corporate Trust Office" means the principal office of the Trustee, at which
at any particular time its corporate trust business shall be administered, which
office on the Issue Date is located at 101 Barclays Street, Floor 21 West, New
York, New York 10286.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date on which the Notes mature shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
contained in Section 4.09 of the Senior Subordinated Notes Indenture and Section
4.14 hereof and such Capital Stock specifically provides that such Person will
not repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required pursuant to such covenants.
"Distributable Joint Venture Cash Flow" means, with respect to any Person
for any period, in the case of each Joint Venture that is not a Restricted
Subsidiary of the referent Person, the sum of
(I) the lesser of
(x) the amount of dividends or distributions paid in cash (but not by
means of a loan) by such Joint Venture to the referent Person or a Restricted
Subsidiary thereof or
(y) the referent Person's (or a Restricted Subsidiary of the referent
Person's) proportionate share of
(i) the Net Income of such Joint Venture for such period, plus
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(ii) to the extent deducted therefrom, depreciation and amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) of such
Joint Venture for such period, plus
(iii) any non-cash charges reducing Net Income of such Joint Venture
for such period (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period), less
(iv) any non-cash items increasing Net Income of such Joint Venture for
such period, minus
(II) the aggregate amount of all Investments made by the Company or any of
its Restricted Subsidiaries in such Joint Venture during such period pursuant to
Section 4.07(b)(viii),
in each case determined on a consolidated basis and in accordance with GAAP.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equistar Assumed Debt" means (i) the 10.00% Notes Due 1999 issued by the
Company pursuant to the Indenture dated as of May 31, 1989 between the Company
and Texas Commerce Bank, National Association, as trustee, as supplemented by
the First Supplemental Indenture dated as of May 31, 1989 and the Second
Supplemental Indenture dated as of December 1, 1997; (ii) the 9.125% Notes Due
2002 issued by the Company pursuant to an Indenture dated as of March 10, 1992
between the Company and First Trust National Association, as trustee, as
supplemented by the First Supplemental Indenture dated as of March 10, 1992 and
the Second Supplemental Indenture dated as of December 1, 1997; (iii) the 6.5%
Notes Due 2006 and 7.55% Notes Due 2026, each issued by the Company pursuant to
an Indenture dated as of January 29, 1996 between the Company and Texas Commerce
Bank National Association, as trustee, as supplemented by the First Supplemental
Indenture dated as of February 15, 1996 and the Second Supplemental Indenture
dated as of December 1, 1997; and (iv) Indebtedness under the medium term notes
issued by the Company, maturing at various dates from 1998 to 2005; in each case
outstanding as of the Issue Date and with respect to which, as between the
Company and Equistar, Equistar is the primary obligor and the Company is an
obligor; in each case, as may be amended from time to time, provided that any
such amendment does not increase the principal amount thereof or interest rate
applicable thereto or shorten the Weighted Average Life to Maturity or Stated
Maturity thereof or add any Restricted Subsidiary as an obligor with respect
thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Company issued pursuant to
this Indenture in exchange for, and in an aggregate principal amount at maturity
equal to,
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the Initial Notes or any Initial Additional Notes, in compliance with the terms
of a Registration Rights Agreement and containing terms substantially identical
to the Initial Notes or any Initial Additional Notes (except that (i) such
Exchange Notes shall not contain terms with respect to transfer restrictions and
shall be registered under the Securities Act and (ii) certain provisions
relating to Liquidated Damages thereon shall be eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the Initial
Notes to exchange Outstanding Notes for Exchange Notes, as provided for in a
Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Existing ARCO Chemical Debt" means the 9.9% Debentures Due 2000, the 9.375%
Debentures Due 2005, the 10.25% Debentures Due 2010 and the 9.8% Debentures Due
2020, all issued by ARCO Chemical pursuant to the Indenture dated June 15, 1988
between ARCO Chemical and The Bank of New York, as Trustee.
"Existing Credit Facility" means that certain Credit Agreement dated as of
July 23, 1998 by and among the Company and Morgan Guaranty Trust Company of New
York, as administrative agent, DLJ Capital Funding, Inc., as syndication agent,
and the other lenders that are party thereto, including any related notes,
instruments, and agreements executed in connection therewith, as amended,
restated, modified, extended, renewed, refunded, replaced or refinanced, in
whole or in part, from time to time, whether or not with the same lenders or
agents.
"Existing Credit Facility Obligations" means all Obligations of the Company
and its Subsidiaries outstanding under the Existing Credit Facility and all
Hedging Obligations payable to a lender or an Affiliate thereof or to a Person
that was a lender or an Affiliate thereof at the time the contract was entered
into under the Existing Credit Facility, including, without limitation, interest
accruing subsequent to the filing of, or which would have accrued but for the
filing of, a petition for bankruptcy, whether or not such interest is an
allowable claim in such bankruptcy proceeding.
"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries in existence, and considered Indebtedness of the Company or any of
its Restricted Subsidiaries, on the Issue Date, until such amounts are repaid,
including all reimbursement obligations with respect to letters of credit
outstanding as of the date of the Indenture.
"Existing Security Documents" means each of the Security Documents referred
to in clause (i) of the definition thereof, in each case as amended, modified,
restated or supplemented from time to time.
"Finance Subsidiary" means a Restricted Subsidiary of the Company, all the
Capital Stock of which (other than Preferred Stock) is owned by the Company that
does not engage in any activity other than: (i) holding of Indebtedness of the
Company; (ii) the
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issuance of Capital Stock; and (iii) any activity necessary, incidental or
related to the foregoing.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Adjusted Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period, (ii) the Adjusted Consolidated Cash Flow and Fixed Charges attributable
to operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but, in the case of such Fixed Charges, only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date and (iii) if since the beginning of the four-quarter reference period any
Person was designated as an Unrestricted Subsidiary or redesignated as or
otherwise became a Restricted Subsidiary, such event shall be deemed to have
occurred on the first day of the four-quarter reference period.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers' acceptance financings and net payments or receipts (if
any) pursuant to Hedging Obligations) and
(ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period and
(iii) any interest expense on Indebtedness of another Person (other
than Non-Recourse Debt of a Joint Venture or Unrestricted Subsidiary secured by
a pledge by the Company or any Restricted Subsidiary of Capital Stock which
pledge is permitted by Section 4.07(b)(xi) or Section 4.07(b)(xii)) that is
Guaranteed by such Person or one of its
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Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries (whether or not such Guarantee or Lien is called
upon) and
(iv) the product of (a) all dividend payments (other than any payments to
the referent Person or any of its Restricted Subsidiaries) on any series of
Preferred Stock of such Person and its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP;
provided that (i) interest payments by Equistar on the Equistar Assumed
Debt and (ii) interest payments on Indebtedness of a Joint Venture shall, in
each case, not be deemed Fixed Charges of the Company as of any date of
determination when such Indebtedness is not considered Indebtedness of the
Company or any Restricted Subsidiary of the Company.
"Foreign Subsidiary" means any Restricted Subsidiary that has 50% or more of
its assets located outside the United States or any territory thereof.
"GAAP" means generally accepted accounting principles 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 have been approved by a significant segment of the accounting
profession, as in effect on the Issue Date.
"General Partner" means a Restricted Subsidiary of the Company or any of its
Restricted Subsidiaries that has no assets and conducts no operations other than
its ownership of a general partnership interest in a Joint Venture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or Disqualified Stock 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 Disqualified Stock of such other Person (including those arising
by virtue of partnership arrangements (other than, in the case of the Company or
a Restricted Subsidiary of the Company, with respect to the obligations of a
Joint Venture, solely by virtue of a Restricted Subsidiary of the Company being
the General Partner of such Joint Venture if, as of the date of determination,
no payment on such Indebtedness or obligation has been made by such General
Partner of such Joint Venture and such arrangement would not be classified and
accounted for, in accordance with GAAP, as a liability on a consolidated balance
sheet of the Company)) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or Disqualified Stock of the
payment thereof or to protect such obligee against loss in respect thereof in
whole or in part (including by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, to maintain financial statement
conditions or otherwise); 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.
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"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) forward foreign exchange
contracts or currency swap agreements, (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values and (iv) agreements designed to protect such Person against
fluctuations in raw material prices.
"Holder" or "Noteholder" means the Person in whose name a Note is registered
on the Registrar's books.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing net Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet of such
Person prepared in accordance with GAAP, as well as 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, for purposes of determining the amount
of any Indebtedness of the type described in this clause, if recourse with
respect to such Indebtedness is limited to such asset, the amount of such
Indebtedness shall be limited to the lesser of the fair market value of such
asset or the amount of such Indebtedness) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of the types
described above of any other Person; provided that Indebtedness shall not
include the pledge by the Company or any of its Restricted Subsidiaries of the
Capital Stock of a Joint Venture Subsidiary, Unrestricted Subsidiary or Joint
Venture permitted by Section 4.07(b)(xi) or Section 4.07(b)(xii) to secure Non-
Recourse Debt of such Unrestricted Subsidiary or Joint Venture.
The Equistar Assumed Debt shall not constitute Indebtedness of the Company
as of any date of determination if the Company has not made any principal or
interest payments on such Indebtedness after the Issue Date; provided that, the
payment by the Company of any principal or interest thereon shall be deemed to
be an incurrence of such Indebtedness on the day of such payment. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture Obligations" means (a) all principal of and interest (including,
without limitation, (i) any Liquidated Damages and (ii) any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Company, whether or not
allowed or allowable as a claim in any such proceeding) on any Note issued
pursuant to the Indenture, (b) all other amounts payable by the Company or any
Subsidiary Guarantor under the Indenture and (c) any renewals or extensions of
any of the foregoing.
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"Initial Additional Notes" means Additional Notes issued in an offering not
registered under the Securities Act.
"Initial Notes" means the Company' 9 7/8% Senior Secured Notes, Series B,
Due 2007, issued on the Issue Date (and any Notes issued in respect thereof
pursuant to Section 3.04, 3.05, 3.06, 3.13, 3.14 or 10.08), but not including
any Exchange Notes issued in exchange therefor.
"Interest Payment Date" means, when used with respect to any Note and any
installment of interest thereon, the date specified in such Note as the fixed
date on which such installment of interest is due and payable, as set forth in
such Note.
"Investment Grade" means a rating of BBB- or higher by S&P or Baa3 or higher
by Moody's or the equivalent of such ratings by S&P or Moody's. In the event
that the Company shall select any other Rating Agency pursuant to the provisions
of the definition thereof, the equivalent of such ratings by such Rating Agency
shall be used.
"Investments" means, with respect to any Person, all investments by such
Person in another Person (including an Affiliate of such Person) in the form of
direct or indirect loans, advances or extensions of credit to such other Person
(including any Guarantee by such Person of the Indebtedness or Disqualified
Stock of such other Person) or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of such other Person, together with all items that are or would be
classified as investments of such investing Person on a balance sheet prepared
in accordance with GAAP; provided that (x) trade credit and accounts receivable
in the ordinary course of business, (y) commissions, loans, advances, fees and
compensation paid in the ordinary course of business to officers, directors and
employees and (z) reimbursement obligations in respect of letters of credit and
tender, bid, performance, government contract, surety and appeal bonds, in each
case solely with respect to obligations of the Company or any of its Restricted
Subsidiaries shall not be considered Investments. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in Section 4.07(a).
"Issue Date" means the date on which the Notes are originally issued.
"Joint Venture" means any joint venture between the Company or any
Restricted Subsidiary and any other Person, whether or not such joint venture is
a Subsidiary of the Company or any Restricted Subsidiary.
"Joint Venture Subsidiary" means a Subsidiary of the Company or any of its
Subsidiaries that has no assets and conducts no operations other than its
ownership of Equity Interests of a Joint Venture.
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"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest (other than, in the case of Receivables Facilities, security
interests under the Uniform Commercial Code arising solely by virtue of the
application of Article 9 thereof to sales of accounts) or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, and any lease in the nature thereof) or the assignment or
conveyance of any right to receive income therefrom.
"Liquidated Damages" means liquidated damages owed to the Holders pursuant
to a Registration Rights Agreement.
"Lyondell TDI" means Lyondell Chimie France TDI, a French limited
partnership and a wholly-owned Subsidiary of the Company.
"Major Asset Sale" means an Asset Sale designated by the Company by prior
notice to the Trustees as a Major Asset Sale, so long as in connection therewith
(i) the Company receives Net Proceeds in an aggregate amount not less than
$1,000,000,000 (which shall be deemed Net Proceeds of such Major Asset Sale for
purposes of Section 4.09),
(ii) at the time of such Major Asset Sale and after giving effect thereto,
no Default shall exist,
(iii) the sum of the gross cash proceeds received by the Company in
respect of such Major Asset Sale plus the value of the interest of the Company
in the Subject Assets Transferee (if any) after giving effect to such Major
Asset Sale is not less than the value (as conclusively determined by the Board
of Directors of the Company) of the portion of the Subject Assets transferred by
the Company in connection with such Major Asset Sale, and
(iv) the Company directly or indirectly is the operator of the Subject
Assets in which it or a Subject Assets Transferee retains an interest. For
purposes of clause (i) of this definition (1) a transaction which produces
substantially the same economic result as a sale of a partial interest in an
asset, as might be achieved, for instance, through contractual arrangements
allocating future revenues and costs attributable to the asset, shall be deemed
an Asset Sale even though there may be no change in title to the asset or in the
ownership of the Person which has title to the asset and (2) a subsequent
related transaction with the same Acquiring Person (or an Affiliate thereof)
contemplated by the terms of the initial Major Asset Sale with such Person
shall, for purposes of determining the applicability of and compliance with this
definition, be deemed a single cumulative transaction.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset
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Sale or any disposition pursuant to a Sale and Leaseback Transaction or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain or loss, together
with any related provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds (excluding any proceeds
deemed to be "cash" pursuant to Section 4.09) received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be paid to holders of minority interests in
Restricted Subsidiaries as a result of such Asset Sale, amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under the
Existing Credit Facility or Existing ARCO Chemical Debt) secured by a Lien on
any asset sold in such Asset Sale and any reserves for adjustment in respect of
the sale price of such asset or assets established in accordance with GAAP and
any reserve for future liabilities established in accordance with GAAP; provided
that the reversal of any such reserve that reduced Net Proceeds when issued
shall be deemed a receipt of Net Proceeds in the amount of such proceeds on such
day.
"Non-Recourse Debt" means Indebtedness as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
(in each case, other than the stock of a Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture pledged by the Company or any of its Restricted
Subsidiaries to secure debt of such Joint Venture or Unrestricted Subsidiary) of
the Company or any of its Restricted Subsidiaries.
"Notes" means the Initial Notes, any Additional Notes and the Exchange
Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Officer" means, with respect to the Company, any Subsidiary Guarantor or
any other obligor on the Notes, the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Financial Officer, the Secretary, the
Treasurer, any Assistant Secretary or Assistant Treasurer or any Vice President
of such Person.
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"Officer's Certificate" means, with respect to the Company or any other
obligor on the Notes, a certificate signed by an Officer of such Person.
"Opinion of Counsel" means a written opinion from legal counsel. The counsel
may be an employee of or counsel to the Company or the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.
"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(ii) Notes for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent in trust for
the Holders of such Notes, provided that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee has been made;
(iii) Notes paid pursuant to Section 3.06; and
(iv) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because the Company or any
Affiliate of the Company holds the Note, provided that in determining whether
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be Outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the reasonable satisfaction of the
Trustee the pledgee's right to act with respect to such Notes and that the
pledgee is not the Company or an Affiliate of such Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Notes on behalf of the Company.
"Payment Default" means any failure to pay any scheduled installment of
interest or principal on any Indebtedness within the grace period provided for
such payment in the documentation governing such Indebtedness.
"PBGC Settlement" means the settlement agreement between the Company and the
Pension Benefit Guaranty Corporation (or any successor entity) as amended,
modified, restated or replaced from time to time.
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"Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.
"Permitted Investments" means:
(a) any Investment in the Company or in a Restricted Subsidiary of the
Company that is engaged in a Permitted Business;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Subsidiary of the Company in a
Person, if as a result of such Investment: (i) such Person becomes a Restricted
Subsidiary of the Company engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company engaged in a Permitted Business;
(d) any non-cash consideration (other than a joint venture interest
received in full or partial satisfaction of the 80% requirement in clause (ii)
of Section 4.09(a)) received as consideration in an Asset Sale that was made
pursuant to and in compliance with Section 4.09;
(e) any acquisition of assets or Equity Interests solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) Hedging Obligations entered into in the ordinary course of business
and otherwise permitted under the Indenture;
(g) Investments in an Accounts Receivable Subsidiary that, as conclusively
determined by the Board of Directors, are necessary or advisable to effect a
Receivables Facility;
(h) Investments in Unrestricted Subsidiaries and Joint Ventures in an
aggregate amount, taken together with all other Investments made in reliance on
this clause (h), not to exceed at any time outstanding $25 million (after giving
effect to any reductions in the amount of any such Investments as a result of
the repayment or other disposition thereof for cash, the amount of such
reduction not to exceed the amount of such Investments previously made pursuant
to this clause (h)); and
(i) any Investment received by the Company or any Restricted Subsidiary as
consideration for the settlement of any litigation, arbitration or claim in
bankruptcy or in partial or full satisfaction of accounts receivable owned by a
financially troubled Person to the extent reasonably necessary in order to
prevent or limit any loss by the Company or any of its Restricted Subsidiaries
in connection with such accounts receivable.
"Permitted Liens" means:
(i) Liens in favor of the Company or any Subsidiary Guarantor;
(ii) Liens securing the Notes and the Subsidiary Guarantees;
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(iii) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or any Restricted Subsidiary of the
Company or becomes a Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger, consolidation or
acquisition and do not extend to any assets of the Company or its Restricted
Subsidiaries other than those of the Person merged into or consolidated with the
Company or that becomes a Restricted Subsidiary of the Company;
(iv) Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such acquisition;
(v) Liens (including the interest of a lessor under a capital lease) on
any asset existing at the time of acquisition thereof or incurred within 180
days of the time of acquisition or completion of construction thereof, whichever
is later, to secure or provide for the payment of all or any part of the
purchase price (or construction price) thereof;
(vi) Liens incurred or assumed in connection with the issuance of revenue
bonds the interest on which is exempt from federal income taxation pursuant to
Section 103(b) of the Internal Revenue Code;
(vii) Liens imposed by law, such as laborers' or other employees',
carriers', warehousemens', mechanics', materialmen's and vendors' Liens and
Liens imposed by law on pipelines or pipeline facilities;
(viii) Liens arising by reason of deposits necessary to qualify the
Company or any Restricted Subsidiary to conduct business, maintain self
insurance or comply with any law and Liens securing the PBGC Settlement;
(ix) Liens to secure the performance of statutory obligations, tender,
bid, performance, government contract, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course of business;
(x) Liens existing on the Issue Date other than Liens securing
Indebtedness under the Existing Credit Facility or the Existing ARCO Chemical
Debt;
(xi) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings, prejudgment Liens that are being contested in good faith by
appropriate proceedings and Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary at the time shall be prosecuting an appeal or proceedings
for review and with respect to which it shall have secured a stay of execution
pending such appeal or proceedings for review; provided that in each case any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(xii) easements, rights-of-ways, restrictions, irregularities of title
and other similar charges or encumbrances, not interfering in any material
respect with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
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(xiii) Liens securing reimbursement obligations with respect to
commercial letters of credit obtained in the ordinary course of business which
encumber documents and other property or assets relating to such letters of
credit and products and proceeds thereof;
(xiv) Liens securing assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets;
(xv) licenses or leases by the Company or any of its Restricted
Subsidiaries as licensor or lessor in the ordinary course of business and
otherwise permitted by the Indenture for patents, copyrights, trademarks,
tradenames and other intellectual property;
(xvi) leases or subleases by the Company or any of its Restricted
Subsidiaries as lessor or sublessor in the ordinary course of business and
otherwise permitted by the Indenture;
(xvii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xviii) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the
Company or any of its Restricted Subsidiaries (which defeasance is otherwise
permitted under the Indenture) having an aggregate principal amount at any one
time outstanding not to exceed $25 million or (B) defeasing Indebtedness ranking
pari passu with the Notes; provided that the Notes are defeased concurrently
with such Indebtedness;
(xix) from and after the first date when the Notes are rated Investment
Grade, Liens on any asset of the Company other than any of the Company's or any
of its Restricted Subsidiary's manufacturing plants or Liens on any Equity
Interests of any Restricted Subsidiary that owns a manufacturing plant;
(xx) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture (or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture) organized (or designated as an Unrestricted Subsidiary
and holding no other assets and conducting no other operations) to construct,
own and/or operate a propylene oxide plant in the European Union to secure Non-
Recourse Debt of such Joint Venture or Unrestricted Subsidiary;
(xxi) the pledge of Equity Interests of an Unrestricted Subsidiary or
Joint Venture (or of a Joint Venture Subsidiary that has no assets and conducts
no operations other than the holding, directly or indirectly, of Equity
Interests of such Joint Venture) organized (or designated as an Unrestricted
Subsidiary and holding no other assets and conducting no other operations) to
participate in the improvement of the Rhodia TDI Plant to secure Non-Recourse
Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly-
owned subsidiary of Rhodia;
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(xxii) Liens on equipment of the Company or any Restricted Subsidiary
arising as a result of a sale and leaseback with respect to such equipment;
provided that the proceeds from such sale and leaseback are applied pursuant to
Section 4.09;
(xxiii) Asset Sale Liens;
(xxiv) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar agreement
establishing a trust or escrow arrangement, and Liens pursuant to merger
agreements, stock purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of property or assets of
the Company or any Restricted Subsidiary, to the extent such dispositions are
permitted hereunder;
(xxv) netting provisions and setoff rights in favor of counterparties
to agreements creating Hedging Obligations;
(xxvi) other Liens on assets of the Company or any Restricted Subsidiary
of the Company securing Indebtedness that is permitted by the terms of the
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $100 million; and
(xxvii) Liens to secure a Permitted Refinancing incurred to refinance
Indebtedness that was secured by a Lien permitted under the Indenture and that
was incurred in accordance with the provisions of the Indenture; provided that
such Liens do not extend to or cover any property or assets of the Company or
any Restricted Subsidiary other than assets or property securing the
Indebtedness so refinanced.
"Permitted Refinancing" means any Indebtedness of the Company or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided that:
(i) the principal amount (or liquidation preference in the case of
Preferred Stock) of such Permitted Refinancing (or if such Permitted Refinancing
is issued at a discount, the initial issuance price of such Permitted
Refinancing) does not exceed the principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of any premiums paid and reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing or, in the case of Preferred Stock of a
Finance Subsidiary, the Indebtedness issued to such Finance Subsidiary, has a
Stated Maturity date later than the Stated Maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated by its terms in right of payment
to the Notes or the Subsidiary Guarantees, such Permitted Refinancing, or, in
the case of Preferred Stock, the Indebtedness issued to such Finance Subsidiary,
has a Stated Maturity date later than the
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Stated Maturity date of, and is subordinated in right of payment to, the Notes
on subordination terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(iv) such Indebtedness is incurred by the Company or a Subsidiary
Guarantor (or such Preferred Stock is issued by a Finance Subsidiary) if the
Company or a Subsidiary Guarantor is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(v) such Indebtedness is incurred by the Company or a Restricted
Subsidiary (or such Preferred Stock is issued by a Finance Subsidiary) if a
Restricted Subsidiary that is not a Subsidiary Guarantor is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Place of Payment" means a city or any political subdivision thereof
referred to in Article 3 and initially designated under Section 4.02.
"Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference stock of such Person which is
outstanding or issued on or after the date of the Indenture.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"QIB", or "Qualified Institutional Buyer" means a "qualified institutional
buyer," as the term is defined in Rule 144A under the Securities Act.
"Qualified Equity Interests" shall mean all Equity Interests of a Person
other than Disqualified Stock of such Person.
"Rating Agency" means (i) S&P or (ii) Moody's or (iii) if neither S&P nor
Moody's shall exist, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which shall be
substituted for S&P or Moody's or both, as the case may be.
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"Receivables Facility" means one or more receivables financing facilities or
arrangements, as amended from time to time, pursuant to which the Company or any
of its Restricted Subsidiaries sells (including a sale in exchange for a
promissory note of or Equity Interest in an Accounts Receivable Subsidiary) its
accounts receivable to an Accounts Receivable Subsidiary.
"Receivables Fees" means distributions or payments made directly or by means
of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not the Company or a
Restricted Subsidiary in connection with, any Receivables Facility.
"Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed or such redemption or purchase by or pursuant to
this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be redeemed or
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.
"Registration Rights Agreement" means (i) the Registration Rights Agreement
dated as of May 17, 1999 among the Company, the Subsidiary Guarantors party
thereto and Donaldson, Lufkin & Jenrette Securities Corporation, J.P. Morgan
Securities Inc., Salomon Smith Barney Inc., Chase Securities Inc. and
Nationsbanc Montgomery Securities LLC, as Initial Purchasers, as such agreement
may be amended from time to time, and (ii) with respect to any Initial
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended from time to
time, relating to rights given by the Company to the purchasers of Initial
Additional Notes to register or exchange such Initial Additional Notes under the
Securities Act.
"Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the date specified for that purpose in Section 3.01.
"Resale Restriction Termination Date" means, with respect to any Note, the
date that is two years (or such other period as may hereafter be provided under
Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original issue date in respect of such Note
and the last date on which the Company or any Affiliate of the Company was the
owner of such Note (or any Predecessor Note thereto).
"Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
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"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, references to a "Restricted Subsidiary" refer to a Restricted
Subsidiary of the Company.
"Rhodia" means Rhodia S.A., a French company and the successor in interest
to Rhone-Poulenc Chemie S.A. under the TDI Agreements.
"Rhodia TDI Plant" means the manufacturing facilities for the production of
toluene diisocyanate, currently owned by Rhodia and located at Pont-de-Claix,
France.
"Sale and Leaseback Transaction" means, with respect to any Person, any
arrangement with a lender or investor providing for the leasing by such Person
of any property or asset of such Person which has been or is being sold or
transferred by such Person to such lender or investor if such arrangement is
accounted for as a capitalized lease by such Person under GAAP.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means (i) the Security Agreement dated the Issue Date
between the Company and the Collateral Agent, each of the Pledge Agreements
dated as of July 28, 1998 between the Company and the Collateral Agent, the
Security Agreement dated as of July 28, 1998 among Lyondell Petrochemical G.P.
Inc., Lyondell Petrochemical L.P. Inc., and the Collateral Agent, the Security
Agreement dated as of July 28, 1998 among Lyondell Refining Company, Lyondell
Refining LP, LLC and the Collateral Agent, the Security Agreement dated as of
July 28, 1998 among Lyondell General Methanol Company and Lyondell Limited
Methanol Company and the Collateral Agent, the Pledge Agreement dated as of
December 31, 1998 between the Company and the Collateral Agent relating to the
pledge of shares of capital stock of Lyondell Refining LP, LLC, the Security
Agreement dated as of the Issue Date between Lyondell Chemical Worldwide, Inc.
and the Collateral Agent, the Pledge Agreement dated as of the Issue Date
between Lyondell Chemical Worldwide, Inc. and the Collateral Agent, the Security
Agreement dated as of December 31, 1998 between Lyondell Refining LP, LLC and
the Collateral Agent, the Deed of Trust dated as of the Issue Date relating to
Bayport, Texas facility from Lyondell Chemical Worldwide, Inc. to the trustee
named therein for the benefit of the Collateral Agent, the Deed of Trust dated
the Issue Date relating to Channelview, Texas facility from Lyondell Chemical
Worldwide, Inc. to the trustee named therein for the benefit of the Collateral
Agent, the Mortgage dated the Issue Date relating to Lake Charles, Louisiana
facility from Lyondell Chemical Worldwide, Inc. to the Collateral Agent and (ii)
any other pledge agreements, security agreements, mortgages, deeds of trust or
other agreements or instruments between the Company and/or any of its Restricted
Subsidiaries and the Collateral Agent granting Liens on any asset of the Company
or any of its Restricted Subsidiaries to secure the Existing Credit Facility
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Obligations, in each case as amended, modified, restated or supplemented from
time to time.
"Senior Indebtedness" has the meaning assigned to such term in the Senior
Subordinated Notes Indenture.
"Senior Secured Notes" means the Company's 9 5/8% Senior Secured Notes,
Series A, due 2007 and the Company's 9 7/8% Senior Secured Notes, Series B, due
2007.
"Senior Secured Notes Indentures" means the indentures relating to the
Company's Senior Secured Notes as in effect on the Issue Date.
"Senior Subordinated Notes" means the Company's 10 7/8% Senior Subordinated
Notes due 2009.
"Senior Subordinated Notes Indenture" means the indenture relating to the
Company's Senior Subordinated Notes as in effect on the Issue Date.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
"Significant Asset Sale" means an Asset Sale of (x) any of the Company's or
its Restricted Subsidiaries' plants that (a) has a fair market value in excess
of $50 million or (b) for Net Proceeds in excess of $50 million (a "Significant
Asset") or (y) a controlling interest in any Restricted Subsidiary that owns a
Significant Asset (other than, in each case, an involuntary disposition, to the
extent that the Existing Credit Facility (but not any refinancing thereof other
than a credit facility with commercial banks and other lenders) permits the
proceeds thereof to be reinvested prior to any mandatory prepayment of amounts
outstanding thereunder).
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the Issue
Date.
"Specified Joint Ventures" means (i) Equistar Chemicals, LP, (ii) LYONDELL-
CITGO Refining LP and (iii) Lyondell Methanol Company, L.P.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
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"Subject Assets" means, with respect to any Major Asset Sale, the assets
which are the subject of such Major Asset Sale.
"Subject Assets Transferee" means any Restricted Subsidiary or Joint Venture
which becomes the owner of Subject Assets in connection with a Major Asset Sale.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof) or (c) that is a
Specified Joint Venture and as to which (i) a general partner of which is such
Person or a Subsidiary of such Person, (ii) such Person owns, directly or
indirectly, 50% or more of the partnership interests of such Specified Joint
Venture and (iii) the Board of Directors of such Person has designated such
Specified Joint Venture to be a "Subsidiary" (which designation shall be
irrevocable for so long as such Specified Joint Venture satisfies the foregoing
requirements). As of the Issue Date, none of the Specified Joint Ventures are
Subsidiaries of the Company. Unless the context otherwise requires references
to a "Subsidiary" refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company' obligations with respect to the Notes.
"Subsidiary Guarantor" means (i) Lyondell Chemical Worldwide, Inc. and
Lyondell Chemical Nederland, Ltd. and (ii) each Restricted Subsidiary that
executes a supplemental indenture, in the form of Exhibit B hereto, providing
for the Guarantee of the payment of the Notes, in each case until such time as
such Subsidiary is released from its Subsidiary Guarantee as permitted by this
Indenture.
"TDI Agreements" means (i) the Share Purchase Agreement dated as of January
23, 1995 between ARCO Chemical Europe Inc. and Rhone-Poulenc Chemie S.A., as
such agreement may be amended, supplemented or otherwise modified from time to
time, (ii) the Processing Agreement dated as of January 23, 1995 between ARCO
Chemical Chemie TDI and Rhone-Poulenc Chemie S.A., as such agreement may be
amended, supplemented or otherwise modified from time to time, and (iii) the TDI
License.
"TDI Assets" means (i) all rights of ARCO Chemical Europe Inc., ARCO
Chemical Chemie TDI, ARCO Chemical Technology LP and their respective successors
under the TDI Agreements and (ii) all of Lyondell TDI's customer lists relating
to the Rhodia TDI Plant.
"TDI License" means the TDI Technology Agreement dated as of January 23,
1995 between ARCO Chemical Technology LP and Rhone-Poulenc Chemie S.A., as such
agreement may be amended, supplemented or otherwise modified from time to time.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections 77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.04.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board
of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interest or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided that
(a) any Guarantee (other than as a co-obligor of the Equistar Assumed Debt
so long as the Equistar Assumed Debt is not considered Indebtedness of the
Company pursuant to the definition thereof) by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation,
(b) either (i) the Subsidiary to be so designated has total assets of
$1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.07,
(c) if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under Section 4.06
and Section 4.07 and
(d) in the case of any Subsidiary that is a Joint Venture as of the date
of its designation as an Unrestricted Subsidiary, such Subsidiary has an
aggregate of 15% or more of its outstanding Capital Stock or other voting
interests (other than directors' qualifying shares) held by another Person other
than the Company or any Restricted Subsidiary or any Affiliate of the Company.
Any such designation by the Board of Directors of the Company pursuant to
clause (i) above shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.06 and Section 4.07.
If (i) at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements of clause (d) (because the Company has acquired more than
85% of the outstanding Capital Stock or other voting interests of any Subsidiary
that was a Joint Venture on the date of its designation as an Unrestricted
Subsidiary), or (ii) at any time the Company or any Restricted Subsidiary
Guarantees any Indebtedness of such Unrestricted Subsidiary or makes any other
Investment in such Unrestricted Subsidiary and such
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incurrence of Indebtedness or Investment would not be permitted under Section
4.06 and Section 4.07 it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.06, the Company shall be in default of such covenant). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 4.06 and (ii) no Default or Event of Default would be in existence
following such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Equity Interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
Section 1.02. Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
Acceleration Notice 6.02
Act 1.08
Affiliate Transaction 4.10
Agent Members 3.13
Asset Sale Offer 4.09
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DEFINED
TERM IN SECTION
---- ----------
Authentication Order 3.03
Change of Control Offer 4.14
Change of Control Payment 4.14
Change of Control Payment Date 4.14
Covenant Defeasance 12.03
Defaulted Interest 3.07
DTC 2.03
Event of Default 6.01
Excess Proceeds 4.09
Expiration Date 1.08
Global Notes 2.01
Guaranteed Indebtedness 4.13
incur 4.06
Legal Defeasance 12.02
Physical Notes 2.01
Place of Payment 3.01
Plan Participants 4.07
Private Placement Legend 2.03
Redemption Amount 10.01
redemption date 13.01
Regular Record Date 3.01
Restricted Payment 4.07
Successor Company 5.01
Subordinated Debt 4.07
U.S. Global Notes 2.01
U.S. Physical Notes 2.01
Section 1.03. Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Indenture have the meanings assigned to them
in this Indenture;
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP and, unless expressly provided
otherwise, all determinations and computations made pursuant to any provision
hereof shall be made in accordance with GAAP; provided that references to any
Person and its Restricted Subsidiaries on a consolidated basis, and any
calculations of amounts with respect to any Person and its Restricted
Subsidiaries on a consolidated basis, shall refer to such Person and all its
Restricted Subsidiaries, whether or not such Restricted Subsidiaries would be
accounted for as consolidated subsidiaries on such Person's financial statements
prepared in accordance with GAAP;
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(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful currency
of the United States of America;
(f) the words "include," "included" and "including" as used herein shall
be deemed in each case to be followed by the phrase "without limitation," if not
expressly followed by such phrase or the phrase "but not limited to";
(g) words in the singular include the plural, and words in the plural
include the singular; and
(h) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Section 1.04. Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any TIA reference to another statute or defined
by SEC rule under the TIA, have the meanings so assigned to them therein. The
following TIA terms have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or Noteholders.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any Subsidiary
Guarantor and any other obligor on the indenture securities.
Section 1.05. Conflict with TIA. If any provision hereof limits, qualifies
or conflicts with a provision of the TIA that is required under the TIA to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed (a) to
apply to this Indenture as so modified or (b) to be excluded, as the case may
be.
Section 1.06. Compliance Certificates and Opinions. Upon any application
or request by the Company or by any other obligor upon the Notes to the Trustee
to take any action under any provision of this Indenture, the Company or such
other obligor upon the Notes, as the case may be, shall furnish to the Trustee
such certificates and opinions as may be required under the TIA. Each such
certificate or opinion shall be given in the form of one or more Officer's
Certificates, if to be given by an Officer, or an Opinion of
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Counsel, if to be given by counsel, and shall comply with the requirements of
the TIA and any other requirements set forth in this Indenture. Notwithstanding
the foregoing, in the case of any such request or application as to which the
furnishing of any Officer's Certificate or Opinion of Counsel is specifically
required by any provision of this Indenture relating to such particular request
or application, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 4.05) shall include:
(a) a statement that the individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of such individual, he or she 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
(d) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
Section 1.07. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers to the effect that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.08. Acts of Noteholders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture
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to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.01) conclusive in favor of
the Trustee, the Company and any other obligor upon the Notes, if made in the
manner provided in this Section 1.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind the Holder of every Note
issued upon the transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee, the Company or
any other obligor on the Notes in reliance thereon, whether or not notation of
such action is made upon such Note.
(e) (i) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in Section
1.08(e)(ii). If any record date is set pursuant to this paragraph, the Holders
of Outstanding Notes on such record date (or their duly designated proxies), and
no other Holders, shall be entitled to take the relevant action, whether or not
such Persons remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Notes on the date such action is taken. Promptly after any
record date is set
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pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder in the
manner set forth in Section 1.10.
(ii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to join in the giving or
making of (w) any Notice of Default, (x) any declaration of acceleration
referred to in Section 6.02, (y) any request to institute proceedings referred
to in Section 6.06(b) or (z) any direction referred to in Section 6.05, in each
case with respect to Notes. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the expense of the Company, shall cause notice of such record date,
the proposed action by Holders and the applicable Expiration Date to be given to
the Company in writing and to each Holder in the manner set forth in Section
1.10.
(iii) With respect to any record date set pursuant to this Section 1.08,
the party hereto that sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Company or the
Trustee, whichever such party is not setting a record date pursuant to this
Section 1.08(e) in writing, and to each Holder in the manner set forth in
Section 1.10, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(iv) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so with regard to
all or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
Section 1.09. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
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(a) the Trustee by any Holder or by the Company or any other obligor upon
the Notes shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at the Corporate Trust
Office (telephone: (212) 815-6286; facsimile: (212) 815-5915), or at any other
address furnished in writing to the Company by the Trustee, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder if in writing and delivered in person or mailed, first-
class postage prepaid, to the Company at One Houston Center, Suite 700, 1221
McKinney, Houston, Texas 77010, Attention: General Counsel (facsimile: (713)
309-2143), with copies to Baker & Botts LLP at 910 Louisiana, Houston, Texas
77002, Attention: Steve Massad, Esq. (facsimile: (713) 229-1522), or at any
other address previously furnished in writing to the Trustee by the Company.
Section 1.10. Notices to Holders; Waivers. Where this Indenture provides
for notice to Holders of any event, such notice shall be deemed to have been
given upon the mailing by first class mail, postage prepaid, of such notices to
Holders at their registered addresses as recorded in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed herein
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.
Section 1.11. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.12. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its respective successors and assigns,
whether so expressed or not.
Section 1.13. Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.14. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their
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successors hereunder, any Paying Agent and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 1.15. Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. TO THE EXTENT PERMITTED BY LAW, THE TRUSTEE, THE COMPANY,
THE SUBSIDIARY GUARANTORS, ANY OTHER OBLIGORS IN RESPECT OF THE NOTES AND (BY
THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 1.16. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest and Liquidated Damages, if any, or principal and premium (if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders. No director, officer, employee, incorporator,
shareholder or other holder of Equity Interests of the Company or the Subsidiary
Guarantors, as such, shall have any liability for any obligations of the Company
or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
Section 1.18. Exhibits and Schedules. All exhibits and schedules attached
hereto are by this reference made a part hereof with the same effect as if
herein set forth in full.
Section 1.19. 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.
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ARTICLE 2
Note Forms
Section 2.01. Forms Generally. The Notes and the Trustee's certificate of
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in Exhibit A annexed hereto and in this Article 2. The Notes may
have such appropriate insertions, omissions, substitutions, notations, legends,
endorsements, identifications and other variations as are required or permitted
by law, stock exchange rule or depository rule or usage, the certificate of
incorporation, bylaws or other similar governing instruments of the Company,
agreements to which the Company is subject, if any, or other customary usage, or
as may consistently herewith be determined by the Officers of the Company
executing such Notes, as evidenced by such execution (provided always that any
such notation, legend, endorsement, identification or variation is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication.
Initial Notes and any Additional Notes offered and sold in reliance on Rule
144A under the Securities Act shall be issued initially in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A and
shall contain the legends set forth in Section 2.03(a) and (b) (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as provided in Sections 3.13 and
3.14.
Initial Notes and any Additional Notes issued pursuant to Section 3.05 and
Section 3.13 in exchange for or upon transfer of beneficial interests in the
U.S. Global Note shall be in the form of permanent certificated Notes in
substantially the form set forth in Exhibit A containing the Private Placement
Legend as set forth in Section 2.03 (the "U.S. Physical Notes"), as hereinafter
provided.
The U.S. Physical Notes, together with any other certificated notes in
registered form, are sometimes collectively referred to as the "Physical
Notes." The U.S. Global Notes, together with any other global notes in
registered form, are sometimes collectively referred to as the "Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 3.13, shall be in the form of one or more
Global Notes.
Section 2.02. Form of Trustee' Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: __________ By: __________________________
Authorized Signatory
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If an appointment of an Authenticating Agent is made pursuant to Section
7.15, the Notes may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By _____________________________
As Authenticating Agent
By _____________________________
Authorized Signatory
Dated:
Section 2.03. Restrictive Legends. (a) Except as set forth in Section
3.14(g), unless and until (i) an Initial Note or any Additional Note is sold
pursuant to an effective registration statement, whether pursuant to the
Registration Rights Agreement or otherwise or (ii) an Initial Note or any
Additional Note is exchanged for an Exchange Note in an Exchange Offer pursuant
to an effective Exchange Offer Registration Statement pursuant to the
Registration Rights Agreement, each U.S. Global Note and U.S. Physical Note
shall bear the following legend set forth below (the "Private Placement Legend")
on the face thereof:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As defined in
Rule 144A under the Securities Act) (A "QIB")
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL,
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CERTIFICATION AND/OR OTHER INFORMATION ACCEPTABLE TO THE COMPANY AND THE
TRUSTEE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
(b) Each Global Note, whether or not an Initial Note or Additional Note,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.13 AND 3.14 OF THE INDENTURE.
ARTICLE 3
The Notes
Section 3.01. Title and Terms. The aggregate principal amount of Notes
that may be authenticated and delivered and Outstanding under this Indenture is
initially limited to $1,000,000,000, but may be increased, subject to compliance
with the covenants contained in Article 4 below and the conditions set forth in
Section 3.03, and except as may be limited by applicable law; provided that the
aggregate principal amount of Senior Secured Notes outstanding at any time shall
not exceed $1.9 billion. The Initial Notes will
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be issued in an aggregate principal amount of $1,000,000,000. All the Original
Notes shall vote and consent together on all matters as one class, and none of
the Original Notes will have the right to vote or consent as a class separate
from one another on any matter. Subject to the covenants contained in Article 4
below, the Company may issue Additional Notes hereunder. Additional Notes
(including any Exchange Notes issued in exchange therefor) shall vote (or
consent) as a class with the other Notes and otherwise be treated as Notes for
all purposes of this Indenture.
The Notes shall be known and designated as the "9 7/8% Senior Secured
Notes, Series B, Due 2007" of the Company. The final Stated Maturity of the
Notes shall be May 1, 2007. Interest on the Outstanding principal amount of
Notes will accrue, subject to Section 3.11, at the rate of 9 7/8% per annum and
will be payable semiannually in arrears on May 1 and November 1 in each year,
commencing on November 1, 1999, to Holders of record at the close of business on
the immediately preceding April 15, and October 15, respectively (each such
April 15 and October 15 a "Regular Record Date"). Interest on the Original Notes
will accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid, from May 17, 1999, and interest
on any Additional Notes (and Exchange Notes issued in exchange therefor) will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid on such Additional Notes, from the
date of issuance of such Additional Notes; provided that if any Note is
surrendered for exchange on or after a record date for an Interest Payment Date
that will occur on or after the date of such exchange, interest on the Note
received in exchange thereof will accrue from the date of such Interest Payment
Date. The Company will pay interest on overdue principal and, to the extent
lawful, on overdue installments of interest and Liquidated Damages, if any, at a
rate of 1% per annum in excess of the interest rate referred to above.
The principal of, and premium, if any, and interest and Liquidated Damages,
if any, on the Notes shall be payable at the Corporate Trust Office or at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (each, a "Place of Payment") in the manner
provided in Section 4.01(b); provided, however, that, under the circumstances
set forth in Section 4.01(b), payment of interest and Liquidated Damages on a
Note may be made by wire transfer of immediately available funds to the account
specified by the Holder of a Global Note or by check mailed to the address of
the Person entitled thereto as such address shall appear in the Register.
Section 3.02. Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 3.03. Execution, Authentication and Delivery and Dating. The Notes
shall be executed on behalf of the Company by an Officer of such Company. The
signature of such Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of an individual who was at
any time a proper Officer of the Company shall bind the Company, notwithstanding
that such individual has ceased to hold such office prior to the authentication
and delivery of such Notes or did not hold such office at the date of such
Notes.
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At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes for original issue in the aggregate principal amount not to exceed
$1,000,000,000 and (ii) Additional Notes from time to time for original issue in
aggregate principal amounts specified by the Company and (iii) Exchange Notes
from time to time for issue in exchange for a like principal amount of Initial
Notes or Initial Additional Notes, in each case specified in clauses (i) through
(iii) above, upon a written order of the Company in the form of an Officer's
Certificate (an "Authentication Order"), and in the case of clause (ii), upon
receipt by the Trustee of an Opinion of Counsel confirming that the Holders of
the Outstanding Notes will be subject to federal income tax in the same amounts,
in the same manner and at the same times as would have been the case if such
Additional Notes were not issued. Such Officer's Certificates shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes, that, in the case of Additional Notes, (x) the issuance of such
Notes does not contravene any provision of Article 4 of this Indenture and (y)
after giving effect to such Issuance of Additional Notes, the aggregate
principal amount of Senior Secured Notes outstanding does not exceed $1.9
billion, whether the Notes are to be issued as one or more Global Notes or
Physical Notes, the name or names of the Initial Holder or Holders and such
other information as the Company may include or the Trustee may reasonably
request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 3.04. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and upon receipt of an Authentication Order
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company consider appropriate for temporary Notes. If temporary Notes are issued,
the Company will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Company in a Place of Payment, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and upon receipt of an Authentication Order the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes of the same series and tenor.
Section 3.05. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Register") in
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which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The
Trustee is hereby appointed "Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for transfer of any Note at the office or agency of the
Company in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes or
Initial Additional Notes for Exchange Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC and the
Trustee shall have received an Officer's Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
an exchange offer thereunder has been consummated. The Initial Notes or
Additional Notes to be exchanged for the Exchange Notes shall be canceled by the
Trustee.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes under this
Section 3.05.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes. If (a) any
mutilated Note is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (b) there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
an Authentication Order the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note
of like tenor and principal amount, bearing a number not contemporaneously
Outstanding.
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In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 3.06, 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.
Every new Note issued pursuant to this Section 3.06 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest Rights Preserved. Interest and
Liquidated Damages on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest and Liquidated Damages
specified in Section 3.01.
Any interest and Liquidated Damages on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (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, as
provided in 3.07(a) or 3.07(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes) 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 Note 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 reasonably 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 provided in this Section 3.07(a). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not 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,
the amount thereof and the Special Record Date and payment date therefor to be
mailed, first class postage prepaid, to each Holder at such Holder's address as
it appears in the
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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 so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following 3.07(b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause (b), such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.07, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest (including
any Liquidated Damages) accrued and unpaid, and to accrue, that were carried by
such other Note.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Section 3.07) interest
and Liquidated Damages, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Subsidiary Guarantors, the Trustee or any agent of the Company, the Subsidiary
Guarantors or the Trustee shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and, if not already canceled,
shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 3.09, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be disposed of in accordance with the Trustee's
customary procedures.
Section 3.10. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. Payment of Liquidated Damages. (a) Under certain
circumstances the Company will be obligated to pay certain Liquidated Damages to
the Holders of certain Initial Notes, as more particularly set forth in such
Initial Notes.
(b) Under certain circumstances the Company may be obligated to pay
certain Liquidated Damages to the Holders of certain Initial Additional Notes,
as may be more particularly set forth in such Initial Additional Notes.
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Section 3.12. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" or "CINS" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use such "CUSIP" or "CINS" numbers in
addition to serial numbers in notices of redemption, repurchase or other notices
to Holders as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such "CUSIP" or "CINS"
numbers either as printed on the Notes or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP" or
"CINS" numbers.
Section 3.13. Book-entry Provisions for Global Notes.
(a) Each Global Note initially shall (i) be registered in the name of the
Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) to the
extent relevant thereto, bear legends as set forth in Section 2.03. None of the
Company or the Subsidiary Guarantors, nor any of their agents shall have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of beneficial ownership interests of, a Global Note, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the Company, the Subsidiary Guarantors
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or 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 Note. The registered Holder
of a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.14. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) upon request of an Agent
Member (for itself or on behalf of a beneficial holder) by written notice given
to the Trustee by or on behalf of the Depositary in accordance with customary
procedures of the Depositary and (ii) Physical Notes shall be transferred to
beneficial owners in exchange for their beneficial interests in the Global Notes
in the event that (A) the Depositary (1) notifies the Company that it is
unwilling or unable to continue as Depositary for the applicable Global Note and
a successor depositary is not appointed by the Company within 90 days or (2)
the Depositary ceases to be a "Clearing Agency" registered under the Exchange
Act , (B) the Company, at its option,
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notifies the Trustee in writing that it elects to cause the issuance of Physical
Notes under this Indenture or (C) there shall have occurred and be continuing a
Default or Event of Default. In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Note to beneficial owners for
Physical Notes pursuant to paragraph (b) of this Section 3.13, the Registrar
shall record on its books and records (and make a notation on the Global Note
of) the date and a decrease in the principal amount of such Global Note in an
amount equal to the beneficial interest in the Global Note being transferred,
and the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Physical Notes of like tenor and principal amount of authorized
denominations. In connection with a transfer of an entire Global Note to
beneficial owners pursuant to clause (ii) of this paragraph (b), the applicable
Global Note 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 applicable Global Note, an equal aggregate principal
amount at maturity of Physical Notes of authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) The Company, the Subsidiary Guarantors, any other obligor upon the
Notes or the Trustee, in the discretion of any of them, may treat as the Act of
a Holder any instrument or writing of any Person that is identified by the
Depositary as the owner of a beneficial interest in the Global Note, provided
that the fact and date of the execution of such instrument or writing is proved
in accordance with Section 1.08(b).
(e) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.14, bear the Private Placement Legend.
Section 3.14. Transfer Provisions. Unless and until (i) an Initial Note or
any Initial Additional Note is sold pursuant to an effective registration
statement, whether pursuant to the Registration Rights Agreement or otherwise,
or (ii) an Initial Note or any Initial Additional Note is exchanged for an
Exchange Note in the Exchange Offer pursuant to an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) General. The provisions of this Section 3.14 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note.
(b) Transfers to QIBs. With respect to the registration of any proposed
transfer of a Note that is a Restricted Security to a QIB, the Registrar shall
register such transfer if it complies with all other applicable requirements of
this Indenture (including Section 3.05 and Section 3.13) and,
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(i) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has otherwise
certified to the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of such Note stating, or has
otherwise certified to the Company and the Registrar in writing, that it is
purchasing such Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is or is acting through an Agent Member,
and the Note to be transferred consists of (A) a Physical Note that after
transfer is to be evidenced by an interest in a Global Note or (B) a beneficial
interest in a Global Note that after the transfer is to be evidenced by a
Physical Note, upon receipt by the Registrar of written instructions given in
accordance with the Depositary's and the Registrar's procedures,
(I) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical Note or
such beneficial interest in such transferor Global Note to be transferred, and
(II) the Trustee shall (x) cancel the Physical Note so transferred or (y)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be.
(c) Transfers pursuant to Rule 144 and transfer to Lyondell. With respect
to the registration of any proposed transfer of a Note that is a Restricted
Security (i) pursuant to the exemption from registration under the Securities
Act provided by Rule 144 thereunder or (ii) to the Company, the Register shall
register such transfer if it complies with all other requirements of this
Indenture (including Section 3.05 and Section 3.13) and,
(A) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has otherwise
certified to the Company and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144 or that such sale has been
made to the Company; and
(B) if the proposed transferee is not the Company and is or is acting
through an Agent Member, and the Note to be transferred consists of (1) a
Physical Note that after transfer is to be evidenced by an interest in a Global
Note or (2) a beneficial interest in a Global Note that after the transfer is to
be
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evidenced by a Physical Note, upon receipt by the Registrar of written
instructions given in accordance with the Depositary's and the Registrar's
procedures,
(I) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical Note or
such beneficial interest in such transferor Global Note to be transferred, and
(II) the Trustee shall (x) cancel the Physical Note so transferred or (y)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be; or
(C) if the proposed transferee is the Company,
(I) the Registrar shall deliver Physical Notes in an amount equal to the
principal amount of the Physical Note or such beneficial interest in such
transferor Global Note to be transferred, and (II) the Trustee shall (x) cancel
the Physical Note so transferred or (y) reflect on its books and records (and
make a notation on the relevant Global Note of) the date and a decrease in the
principal amount of such transferor Global Note, as the case may be.
The Company and the Trustee may require additional certifications or other
information to confirm that any proposed transfer is being made pursuant to Rule
144 under the Securities Act.
(d) Other Transfers. The Registrar shall effect and register, upon receipt
of a written request from the Company to do so, a transfer not otherwise
permitted by this Section 3.14, such registration to be done in accordance with
the otherwise applicable provisions of this Section 3.14, upon the furnishing by
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Company and the Trustee) to the
effect that, and such other certifications or information as the Company may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
A Note that is a Restricted Security may not be transferred other than as
provided in this Section 3.14. A beneficial interest in a Global Note that is a
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 3.14.
(e) Limitation on Issuance of Physical Notes. No Physical Note shall be
exchanged for a beneficial interest in any Global Note, except in accordance
with Section 3.13 and this Section 3.14.
(f) Execution, Authentication and Delivery of Physical Notes. In any case
in which the Registrar is required to deliver a Physical Note to a transferee or
transferor, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, such Physical Note.
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(g) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend, unless (i) the
requested transfer is after the relevant Resale Restriction Termination Date
with respect to such Notes, (ii) upon written request of the Company after there
is delivered to the Registrar an opinion of counsel (which opinion and counsel
are satisfactory to the Company and the Trustee) to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act, or (iii) such
Notes are sold or exchanged pursuant to an effective registration statement
under the Securities Act.
(h) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.13 or this Section 3.14 (including
all Notes received for transfer pursuant to this Section 3.14). The Company
shall have the right to require the Registrar to deliver to the Company, at the
Company' expense, copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
In connection with any transfer of any Note, the Trustee, the Registrar,
the Company and the Subsidiary Guarantors shall be entitled to receive, shall be
under no duty to inquire into, may conclusively presume the correctness of, and
shall be fully protected in relying upon the certificates, opinions and other
information referred to herein (or in the forms provided herein, attached hereto
or to the Notes, or otherwise) received from any Holder and any transferee of
any Note regarding the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such Note and any other
facts and circumstances related to such transfer.
(i) Certain Additional Terms Applicable to Physical Notes. Any transferee
entitled to receive a Physical Note may request that the principal amount
thereof be evidenced by one or more Physical Notes in any authorized
denomination or denominations and the Registrar shall comply with such request
if all other transfer restrictions are satisfied.
ARTICLE 4
Covenants
Section 4.01. Payment of Principal, Premium and Interest. (a) The Company
will duly and punctually pay the principal of (and premium, if any) and interest
and Liquidated Damages, if any, on the Notes in accordance with the terms of the
Notes and this Indenture. An installment of principal (and premium, if any) or
interest and Liquidated Damages shall be considered paid on the date it is due
if the Trustee or Paying Agent or Paying Agents hold on that date money
designated for and sufficient to pay the installment.
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(b) Payments (including principal, premium, if any, interest and
Liquidated Damages, if any) in respect of the Notes represented by the Global
Notes, the Holder of which has given wire transfer instructions on or prior to
the relevant record date, shall be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Physical Notes, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, at the office or
agency maintained by the Company in The City of New York referred to in Section
4.02 or, at the option of the Company, by mailing a check to each such Holder's
registered address.
Section 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain such 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 hereby designates the Corporate Trust Office as an initial Place of
Payment and as such office of the Company in the Borough of Manhattan, The City
of New York, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands so long as such Corporate Trust
Office remains a Place of Payment.
Section 4.03. Money for Payments to Be Held in Trust. If the Company shall
at any time act as its own Paying Agent, it will, on or before each due date of
the principal of (and premium, if any) or interest and Liquidated Damages, if
any, on, any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest and Liquidated Damages, if any, so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest and
Liquidated Damages, if any, on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest and Liquidated
Damages, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest and Liquidated
Damages, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
If the Company is not acting as its own Paying Agent, the Company will
cause any Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of (and premium,
if any) or interest and Liquidated Damages, if any, on Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
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(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any such payment of principal (and
premium, if any) or interest and Liquidated Damages, if any;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.
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 by Company
Order 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 trusts 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.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest and Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and
Liquidated Damages, if any, has become due and payable shall be paid in the
appropriate proportion to the Company upon a Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
Section 4.04. SEC Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes issued hereunder are outstanding,
the Company will furnish to each Trustee and the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of all such information and reports with the SEC for
public availability and make such information available to securities analysts
and prospective investors upon request.
(b) For so long as any Notes remain outstanding, the Company will furnish
to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
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(c) All obligors on the Notes will comply with Section 314(a) of the TIA.
(d) The Company shall promptly mail copies of all such annual reports,
information, documents and other reports provided to the Trustee pursuant to
clauses (a) and (c) hereof to the Holders at their addresses appearing in the
Register maintained by the Registrar.
(e) 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 or
determinable from 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 Officer's Certificates).
Section 4.05. Certificates to Trustee. (a) The Company will deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of the
Company stating that such officer has conducted or supervised a review of the
activities of the Company and its Restricted Subsidiaries and the Company's and
its Restricted Subsidiaries' performance under this Indenture and that, based
upon such review, to the best of such officer's knowledge, the Company has
fulfilled all obligations thereunder or, if there has been a default in the
fulfillment of any such obligation (determined without regard to any period of
grace or requirement of notice provided in this Indenture), specifying each such
default and the nature and status thereof.
(b) The Company will deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of an Event of Default
or a Default, an Officer's Certificate setting forth the details of such Event
of Default or Default, and the action which the Company proposes to take or has
taken with respect thereto.
(c) The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company a written statement by the Company's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii) whether, in connection with their audit
examination, any Default has come to their attention and, if such a Default has
come to their attention, specifying the nature and period of the existence
thereof.
Section 4.06. Limitation on Indebtedness. (a) On or after the Issue Date:
(i) the Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt);
(ii) the Company will not, and will not permit any of its Restricted
Subsidiaries to, issue any Disqualified Stock (including Acquired Disqualified
Stock);
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(iii) and the Company will not permit any of its Restricted Subsidiaries
that are not Subsidiary Guarantors to issue any shares of Preferred Stock
(including Acquired Preferred Stock);
provided, however, that the Company and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) and the Company and the Subsidiary
Guarantors may issue shares of Disqualified Stock (including Acquired
Disqualified Stock) if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
Letters of credit and bankers' acceptances shall be deemed to have an aggregate
principal amount of Indebtedness equal to the maximum amount available
thereunder.
(b) The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant to the Existing
Credit Facility (and by its Subsidiaries of Guarantees thereof) in an aggregate
principal amount at any time outstanding not to exceed an amount equal to $3.87
billion less the aggregate amount of all mandatory repayments (other than
mandatory prepayments triggered solely by the issuance of Indebtedness or
Preferred Stock of a Finance Subsidiary to refinance the Existing Credit
Facility) applied to (x) repay loans (other than revolving credit loans)
outstanding thereunder or (y) permanently reduce the revolving credit
commitments thereunder;
(ii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Senior Secured Notes and Senior Subordinated
Notes issued on the Issue Date and the Subsidiary Guarantees thereof;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness (other than Indebtedness of the type described in clauses
(i), (ii) or (v) through (xii) of this covenant);
(iv) the incurrence by the Company or any of its Restricted Subsidiaries
of any Permitted Refinancing in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness that
was permitted to be incurred under the Fixed Charge Coverage Ratio test set
forth above or clauses (ii) or (iii) above or (xiii) or (xiv) below or this
clause (iv);
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that (i) if the Company or any Subsidiary
Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
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respect to the Notes or the Subsidiary Guarantee, as the case may be, and
(ii)(A) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any Restricted Subsidiary of Hedging
Obligations that are incurred for the purpose of (A) fixing or hedging interest
rate or currency risk with respect to any fixed or floating rate Indebtedness
that is permitted by the Indenture to be outstanding or any receivable or
liability the payment of which is determined by reference to a foreign currency;
provided that the notional principal amount of any such Hedging Obligation does
not exceed the principal amount of the Indebtedness to which such Hedging
Obligation relates or (B) fixing or hedging risk with respect to fluctuations in
the cost of raw materials; provided that such obligation is entered into for
valid business purposes other than speculative purposes (as determined by the
Company's or such Restricted Subsidiary's principal financial officer in the
exercise of his or her good faith business judgment);
(vii) the issuance by any of the Company's Restricted Subsidiaries of
shares of Preferred Stock to the Company or a Wholly Owned Restricted
Subsidiary; provided that (A) any subsequent issuance or transfer of Equity
Interests that results in such Preferred Stock being held by a Person other than
the Company or a Wholly Owned Restricted Subsidiary or (B) the transfer or other
disposition by the Company or a Wholly Owned Restricted Subsidiary of any such
shares to a Person other than the Company or a Wholly Owned Restricted
Subsidiary shall be deemed, in each case, to constitute an issuance of such
Preferred Stock by such Subsidiary on such date that is not permitted by this
clause (vii);
(viii) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by tender, bid, performance, government contract,
surety or appeal bonds, standby letters of credit and warranty and contractual
service obligations of like nature, trade letters of credit or documentary
letters of credit, in each case to the extent incurred in the ordinary course of
business of the Company or such Restricted Subsidiary and the incurrence by the
Company of Indebtedness represented by letters of credit incurred in connection
with the PBGC Settlement;
(ix) the incurrence by any Restricted Subsidiary of the Company of
Indebtedness or the issuance by any Restricted Subsidiary of Preferred Stock,
the aggregate principal amount or liquidation preference of which, together with
all other Indebtedness and Preferred Stock of the Company's Restricted
Subsidiaries at the time outstanding and incurred or issued in reliance upon
this clause (ix), does not exceed $50.0 million;
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(x) the issuance by any Finance Subsidiary of Preferred Stock with an
aggregate liquidation preference not exceeding the amount of Indebtedness of the
Company held by such Finance Subsidiary; provided that the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to the covenant
described below under Section 4.04 immediately preceding the date on which such
Preferred Stock is issued would have been at least 2.0 to 1, determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom) as
if such Preferred Stock had been issued at the beginning of such four-quarter
period;
(xi) the incurrence of Indebtedness by Foreign Subsidiaries in an aggregate
principal amount (or accreted value, as applicable) at any time outstanding and
incurred in reliance upon this clause (xi) not to exceed $100.0 million;
(xii) the Guarantee by any Restricted Subsidiary of Indebtedness of the
Company or a Restricted Subsidiary that was permitted to be incurred by another
provision of this covenant;
(xiii) Acquired Debt or Acquired Disqualified Stock; provided that such
Indebtedness or Disqualified Stock was not incurred in connection with or in
contemplation of such Person becoming a Restricted Subsidiary; and provided
further that immediately after giving effect to such incurrence, the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which financial statements have been filed with the SEC pursuant to
Section 4.04 immediately preceding the date of such incurrence would have been
at least 2.0 to 1, determined on a pro forma basis;
(xiv) Indebtedness or Disqualified Stock of a Specified Joint Venture or a
Subsidiary thereof existing at the time such Specified Joint Venture first
becomes a Restricted Subsidiary; provided that such Indebtedness or Disqualified
Stock was not incurred in connection with or in contemplation of such Specified
Joint Venture becoming a Restricted Subsidiary; and provided further that
immediately after giving effect to such Specified Joint Venture becoming a
Restricted Subsidiary, the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such Specified Joint Venture became a Restricted Subsidiary would have
been, determined on a pro forma basis, (x) at least 2.0 to 1 or (y) equal to or
greater than it was immediately prior to such Specified Joint Venture becoming a
Restricted Subsidiary;
(xv) with respect to any Specified Joint Venture that becomes a Restricted
Subsidiary, the incurrence by such Specified Joint Venture of Indebtedness under
any revolving credit facility in an aggregate principal amount at any time
outstanding not to exceed the aggregate principal amount of committed financing
under all revolving credit facilities of such Specified Joint Venture as in
effect on the Issue Date; and
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(xvi) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding and incurred in reliance on this clause (xvi) not to
exceed $25.0 million.
(c) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness or Preferred Stock meets the criteria of more
than one of the categories of permitted Indebtedness described in clauses (i)
through (xvi) above or is entitled to be incurred pursuant to Section 4.06(a),
the Company shall, in its sole discretion, classify such item of Indebtedness or
Preferred Stock in any matter that complies with this covenant and such
Indebtedness or Preferred Stock will be treated as having been incurred pursuant
to the clauses or Section 4.06(a), as the case may be, designated by the
Company. The amount of Indebtedness issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
Section 4.07. Limitation on Restricted Payments. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:
(i) declare or pay any dividend or make any distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (other than
(x) dividends or distributions payable in Qualified Equity Interests of the
Company and (y) dividends or distributions payable to the Company or any
Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company, any of its Restricted Subsidiaries or any Affiliate of
the Company (other than any such Equity Interests owned by the Company or any of
its Restricted Subsidiaries);
(iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness ("Subordinated Debt") of
the Company or any Restricted Subsidiary that is subordinated by its terms to
the Notes or the Subsidiary Guarantees issued under the Indenture (other than
Indebtedness owed to the Company or any Restricted Subsidiary), except, in each
case, payment of interest or principal at Stated Maturity; or
(iv) make any Restricted Investment (all such payments and other actions
set forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments");
unless, at the time of and after giving effect to such Restricted Payment
(the amount of any such Restricted Payment, if other than cash, shall be the
fair market value (as conclusively evidenced by a Board Resolution) of the
asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment):
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(A) no Default or Event of Default shall have occurred and be continuing
after giving effect thereto; and
(B) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to Section 4.04
immediately preceding the date of such Restricted Payment, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.06(a) and
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the Issue Date (excluding Restricted Payments permitted by Section 4.07(b)(ii)
(to the extent paid to the Company or any of its Restricted Subsidiaries or to
the extent such distributions are deducted as a minority interest in calculating
Consolidated Net Income), Section 4.07(b)(iii), Section 4.07(b)(iv), Section
4.07(b)(v), Section 4.07(b)(vii), Section 4.07(b)(x), Section 4.07(b)(xiv) and
Section 4.07(b)(xvi) and 50% of any Restricted Payments permitted by Section
4.07(b)(viii)), is less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter commencing
on April 1, 1999, to the end of the Company's most recently ended fiscal quarter
for which financial statements have been filed with the SEC pursuant to Section
4.04 at the time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company or any of
its Restricted Subsidiaries from the issue or sale (other than to a Subsidiary
or Joint Venture of the Company) after the Issue Date of Qualified Equity
Interests of the Company or of debt securities of the Company or any of its
Restricted Subsidiaries that have been converted into or exchanged for such
Qualified Equity Interests of the Company, plus
(iii) to the extent that any Restricted Investment (other than a Restricted
Investment permitted to be made pursuant to Section 4.07(b)(vii) or Section
4.07(b)(viii) below) that was made after the Issue Date is sold for cash or
otherwise liquidated, repaid or otherwise reduced, including by way of dividend
(to the extent not included in calculating Consolidated Net Income), for cash,
the lesser of (A) the cash return with respect to such Restricted Investment
(less the cost of disposition, if any) and (B) the initial amount of such
Restricted Investment plus
(iv) an amount equal to the sum of (A) the net reduction in Investments in
Unrestricted Subsidiaries resulting from dividends, repayments of loans or other
transfers of assets (to the extent not included in calculating Consolidated Net
Income), in each case to the Company or any Restricted
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Subsidiary from Unrestricted Subsidiaries and (B) the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Restricted Investments (other than Restricted Investments permitted to
be made pursuant to Section 4.07(b)(vii) or Section 4.07(b)(viii) below)
previously made after the Issue Date by the Company or any Restricted Subsidiary
in such Unrestricted Subsidiary.
(b) If, other than with respect to payments made under Section 4.07(b)(i)
and Section 4.07(b)(xiv) below, no Default or Event of Default shall have
occurred and be continuing after giving effect to such Restricted Payment, the
foregoing provisions will not prohibit the following Restricted Payments:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;
(ii) dividends or distributions by any Restricted Subsidiary of the Company
payable (x) to all holders of a class of Capital Stock of such Restricted
Subsidiary on a pro rata basis or on a basis that is more favorable to the
Company; provided that at least 50% of such class of Capital Stock is held by
the Company and/or one or more of its Restricted Subsidiaries or (y) to all
holders of a class of Preferred Stock of a Restricted Subsidiary that is not a
Subsidiary Guarantor issued after the Issue Date in compliance with Section
4.06;
(iii) the payment of cash dividends on any series of Disqualified Stock
issued after the Issue Date in an aggregate amount not to exceed the cash
received by the Company since the Issue Date upon issuance of such Disqualified
Stock;
(iv) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Company, any Restricted Subsidiary or any Joint Venture
(or the acquisition of all the outstanding Equity Interests of any Person that
conducts no operations and has no assets or liabilities other than the ownership
of Equity Interests in a Joint Venture) in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary or
Joint Venture of the Company) of, Qualified Equity Interests of the Company;
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (C)(ii) of Section 4.07(a);
(v) the defeasance, redemption or repurchase of Subordinated Debt with the
net cash proceeds from an incurrence of Permitted Refinancing or in exchange for
or out of the net cash proceeds from the substantially concurrent sale (other
than to a Subsidiary or Joint Venture of the Company) of Qualified Equity
Interests of the Company; provided that the amount of any such net cash proceeds
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that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (C)(ii) of Section 4.07(a);
(vi) the repurchase, redemption or other acquisition or retirement for
value of (x) any Equity Interests of the Company or any Subsidiary of the
Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option agreement or (y) any Equity Interests of the Company which are or are
intended to be used to satisfy issuances of Equity Interests upon exercise of
employee or director stock options or upon exercise or satisfaction of other
similar instruments outstanding under employee or director benefit plans of the
Company or any Subsidiary of the Company; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests shall
not exceed $5.0 million in any fiscal year of the Company;
(vii) Restricted Investments in any of the Specified Joint Ventures
(including without limitation, the purchase of Equity Interests of a Specified
Joint Venture directly from another Person or the purchase of all the
outstanding Equity Interests of any Person that conducts no operations and has
no assets or liabilities other than the ownership of Equity Interests of a
Specified Joint Venture) to the extent that the proceeds thereof are used to
purchase or redeem an interest of another Person in such Specified Joint Venture
(other than the Company, a Restricted Subsidiary or an Affiliate of the Company,
except a Person that is deemed to be an Affiliate solely by virtue of its
ownership of Equity Interests of the Company acquired in exchange for Equity
Interests in such Specified Joint Venture); provided that after giving pro forma
effect thereto as if such Restricted Payment (and any related incurrence of
Indebtedness) had been made at the beginning of the most recently ended four
full fiscal quarter period for which financial statements have been filed with
the SEC pursuant to Section 4.04 immediately preceding the date of such
Restricted Payment, the Company would have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.06(a);
(viii) Restricted Investments in any Joint Venture made during any fiscal
year of the Company or within 45 days after the end of such fiscal year in
amounts that, together with all other Restricted Investments made in such Joint
Venture in respect of such fiscal year in reliance on this Section 4.07(b)(viii)
during such fiscal year or within 45 days after the end of such fiscal year, do
not exceed the amount of dividends or distributions previously paid in respect
of such fiscal year to the Company or any Restricted Subsidiary by such Joint
Venture;
(ix) the payment of dividends on the Company's common stock in an
aggregate amount per annum not to exceed the product of
(i) $0.90 and
(ii) the sum, without duplication, of
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(w) the number of shares outstanding on the day prior to the Issue Date
plus
(x) the greater of (I) if the Company issues shares of its common stock on
or after the Issue Date in one or more equity offerings for cash, to the extent
that the gross proceeds therefrom do not exceed $500 million, such number of
shares of common stock or (II) the number of shares issued in the stock offering
being made concurrently with the placement of the Initial Notes (including
pursuant to the exercise of the overallotment option by the underwriters of the
stock offering), plus
(y) if the Company issues shares of its common stock after the Issue Date,
to the extent (1) such shares are issued in exchange for or (2) the net cash
proceeds therefrom are used substantially concurrently to acquire Equity
Interests (held by a Person other than the Company, a Restricted Subsidiary or
an Affiliate of the Company, except a Person that is deemed to be an Affiliate
solely by virtue of its ownership of Equity Interests of the Company acquired in
exchange for Equity Interests in such Specified Joint Venture) of a Specified
Joint Venture that immediately prior to such issuance was or as a result of such
exchange or acquisition becomes a Restricted Subsidiary (and such Specified
Joint Venture is not subsequently designated as an Unrestricted Subsidiary),
such number of shares of common stock plus
(z) the sum of (1) 1,000,000 and (2) such number of shares of common stock
of the Company as are issued after the Issue Date pursuant to the exercise of
employee or director stock options granted prior to the Issue Date or issued
after the Issue Date pursuant to other employee or director benefit plans of the
Company or any of its Restricted Subsidiaries or issuable pursuant to the
exercise of employee or director stock options granted after the Issue Date;
provided that the aggregate number of shares includable pursuant to this clause
(z)(2) with respect to shares issued or issuable during any fiscal year of the
Company shall not exceed 1,000,000;
provided further that the number of shares referred to in clauses (x), (y) and
(z) shall be adjusted to reflect any stock split (or reverse stock split) or
stock dividend made after the Issue Date and prior to the date such shares were
issued;
(x) distributions or payments of Receivables Fees;
(xi) (A) Investments in any Joint Venture or Unrestricted Subsidiary
organized to construct, own and/or operate a propylene oxide plant in the
European Union in an aggregate amount that, together with all other Investments
made pursuant to this Section 4.07(b)(xi), does not exceed $100.0 million and
(B) the pledge of the Capital Stock of such Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding directly or indirectly of Equity Interests of
such Joint
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Venture to secure Non-Recourse Debt of such Joint Venture or Unrestricted
Subsidiary;
(xii) (A) (x) the transfer of the TDI Assets to a newly formed Joint
Venture or Unrestricted Subsidiary or (y) the designation of any Restricted
Subsidiary that has no assets or liabilities other than all or a portion of the
TDI Assets as an Unrestricted Subsidiary, in each case, in connection with the
incurrence of Indebtedness by such Joint Venture or Unrestricted Subsidiary or
Rhodia or a wholly-owned subsidiary of Rhodia to improve the Rhodia TDI Plant
and (B) the pledge of the Capital Stock of such Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding directly or indirectly of Equity Interests of
such Joint Venture to secure Non-Recourse Debt of such Joint Venture or
Unrestricted Subsidiary or Rhodia or a wholly-owned subsidiary of Rhodia;
(xiii) the repurchase of any Subordinated Debt at a purchase price not
greater than 101% of the principal amount thereof in the event of (x) a Change
of Control pursuant to a provision no more favorable to the holders thereof than
the provisions of Section 4.14 or (y) an Asset Sale pursuant to a provision no
more favorable to the holders thereof than the provisions of Section 4.09;
provided that, in each case, prior to such repurchase the Company has made a
Change of Control Offer or Asset Sale Offer, as applicable, and repurchased all
Notes that were validly tendered for payment in connection with such Change of
Control Offer or Asset Sale Offer;
(xiv) distributions by any Restricted Subsidiary or Joint Venture of
chemicals to a holder of Capital Stock of such Restricted Subsidiary or Joint
Venture if such distributions are made pursuant to a provision in a joint
venture agreement or other arrangement entered into in connection with the
establishment of such Joint Venture or Restricted Subsidiary that requires such
holder to pay a price for such chemicals equal to that which would be paid in a
comparable transaction negotiated on an arms-length basis (or pursuant to a
provision that imposes a substantially equivalent requirement);
(xv) any other Restricted Payment which, together with all other Restricted
Payments made pursuant to this Section 4.07(b)(xv) on or after the date of the
Indenture, does not exceed $25 million (after giving effect to any subsequent
reduction in the amount of any Investments made pursuant to this Section
4.07(b)(xv) as a result of the repayment or other disposition thereof for cash
as set forth in clause (iii) of the first paragraph above, the amount of such
reduction not to exceed the amount of such Investments previously made pursuant
to this Section 4.07(b)(xv)); and
(xvi) dividends or distributions by any Joint Venture (other than a
Specified Joint Venture) to all holders of a class of Capital Stock of such
Joint Venture permitted by Section 4.07(b)(ii)(x) above; provided that after
giving effect to such dividends or distributions and any related transactions,
the Joint Venture making such dividends or distributions to such holders is
contractually entitled to receive, and receives within 180 days before or after
the date of such
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dividends or distributions, directly or indirectly, an equivalent or larger cash
payment from each such holder (other than from a holder that is the Company or
any Restricted Subsidiary) or from an Affiliate of such holder, which cash
payment has not been previously applied pursuant to this Section 4.07(b)(xvi) to
offset any other dividend or distribution by such Joint Venture to such holder
and (y) such dividends or distributions do not exceed such holders' pro rata
share of the Joint Venture's cash flows from operating activities, minus any
non-cash charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period or amortization of a prepaid cash expense
in any future period.
(c) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments Section
4.07(a) (except to the extent such Investments were repaid in cash, and, in the
case of a Joint Venture (and any Subsidiary of a Joint Venture) designated as an
Unrestricted Subsidiary on the first day that it is a Subsidiary of the Company,
except to the extent that (1) such Investments were made after the Issue Date or
(2) in the case of a Specified Joint Venture, such Investments were made prior
to the Issue Date). All such outstanding Investments (except as provided in the
parenthetical included in the preceding sentence) will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as conclusively determined by the Board of
Directors). Such designation will only be permitted if any such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. In the case of any
designation by the Company of a Person as an Unrestricted Subsidiary on the
first day that such Person is a Subsidiary of the Company in accordance with the
provisions of the Indenture, such designation shall be deemed to have occurred
for all purposes of the Indenture simultaneously with, and automatically upon,
such Person becoming a Subsidiary.
(d) Not later than the date of making any Restricted Payment, other than
those permitted by Sections 4.07(b)(ii)(x), 4.07(b)(vi), 4.07(b)(x) and
4.07(b)(xiv) above, and not later than the 120th day after making any Restricted
Payment permitted by Section 4.07(b)(vi) above, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.
Section 4.08. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries and Joint Ventures. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
restriction on the ability of any Restricted Subsidiary to:
(i) (A) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect
to
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any other interest or participation in, or measured by, its profits or (B) pay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) existing agreements as in effect on the Issue Date;
(b) Indebtedness permitted by the Indenture to be incurred containing
restrictions on the ability of Restricted Subsidiaries to consummate
transactions of the types described in clauses (i), (ii) or (iii) above not
materially more restrictive than those contained in the Indenture;
(c) the Senior Secured Notes Indentures and the Senior Subordinated Notes
Indenture;
(d) applicable law;
(e) existing restrictions with respect to a Person acquired by the Company
or any of its Restricted Subsidiaries (except to the extent such restrictions
were put in place in connection with or in contemplation of such acquisition),
which restrictions are not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the Person,
so acquired;
(f) customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business;
(g) construction loans and purchase money obligations (including Capital
Lease Obligations) for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so constructed or acquired;
(h) in the case of clause (iii) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject to such
security agreements or mortgages;
(i) a Permitted Refinancing, provided that the restrictions contained in
the agreements governing such Permitted Refinancing are not materially more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced (as conclusively evidenced by a Board
Resolution);
(j) customary restrictions on a Finance Subsidiary imposed in such Finance
Subsidiary's organizational documents or by the terms of its Preferred Stock;
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(k) any restriction with respect to shares of Capital Stock of a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of such shares of Capital Stock or any restriction with respect to
the assets of a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of such assets or all or substantially all the
Capital Stock of such Restricted Subsidiary pending the closing of such sale or
disposition;
(l) in the case of any Restricted Subsidiary that is a Joint Venture,
customary restrictions on such Restricted Subsidiary contained in its joint
venture agreement, which restrictions are consistent with the past practice of
the Company and its Restricted Subsidiaries (as conclusively evidenced by a
Board Resolution);
(m) existing restrictions with respect to a Specified Joint Venture or the
property or assets thereof or a Subsidiary of a Specified Joint Venture or the
property or assets thereof, in each case, at the time such Specified Joint
Venture first becomes a Restricted Subsidiary (except to the extent such
restrictions were put in place in connection with or in contemplation of such
Specified Joint Venture becoming a Restricted Subsidiary), which restrictions
are not applicable to any Person, or the properties or assets of any Person,
other than such Specified Joint Venture or the property or assets thereof or a
Subsidiary of such Specified Joint Venture or the property or assets thereof;
and
(n) the Existing Credit Facility and related documentation as the same is
in effect on the Issue Date and as amended, modified, extended, renewed,
refunded, refinanced, restated or replaced from time to time; provided that the
Existing Credit Facility and related documentation as so amended, modified,
extended, reviewed, refunded, refinanced, restated or replaced is not materially
more restrictive, taken as a whole, as to the matters enumerated above than the
Existing Credit Facility and related documentation as in effect on the Issue
Date (as conclusively evidenced by a Board Resolution).
For purposes of determining compliance with this covenant, in the event
that a restriction meets the criteria of more than one of the categories of
permitted restrictions described in clauses (a) through (n) above, the Company
shall, in its sole discretion, classify such restriction in any matter that
complies with this covenant and such restriction will be treated as existing
pursuant to the clauses designated by the Company.
(b) The Company will use best efforts (consistent with its contractual
obligations and fiduciary duties to any Joint Venture, in each case, as in
effect on the Issue Date) not to permit any of its Joint Ventures that are not
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction on the ability of such Joint
Venture to:
(i) (A) pay dividends or make any other distributions to the Company or
any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect
to any other interest or participation in, or measured by, its profits or (B)
pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
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(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) such Joint Venture's joint venture agreement or its credit facility
(provided that in each case such restrictions are consistent with the past
practice of the Company);
(b) in the case of any Joint Venture existing on the Issue Date, its
existing agreements as in effect on the date of the Indenture and as amended,
modified, extended, restated or replaced from time to time; provided that no
such amendment, modification, extension, restatement or replacement results in
agreements that are materially more restrictive, taken as a whole, as to the
matters enumerated above than the existing agreements as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution);
(c) in the case of LCR, any instrument governing its Indebtedness; and
(d) the restrictions described in clauses (d), (e), (f), (g), (h), (j), (k)
and (n) of Section 4.08(a) (assuming that references in clauses (h) and (k) to a
Restricted Subsidiary were references to a Joint Venture).
Section 4.09. Limitation on Sales of Assets. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(i) the Company and/or the Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value (as conclusively evidenced by a Board Resolution set forth in an
Officers' Certificate delivered to the Trustees) of the assets or Equity
Interests issued or sold or otherwise disposed of; and
(ii) at least 80% of the consideration therefor received by the Company
and/or such Restricted Subsidiary is in the form of
(A) cash or Cash Equivalents or
(B) a controlling interest or a joint venture interest (to the extent
otherwise permitted by the Indenture) in a business engaged in a Permitted
Business or long-term property or assets that are used or useful in a
Permitted Business;
provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are promptly
converted by the
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Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option:
(i) to permanently repay Senior Indebtedness (and to correspondingly
reduce commitments with respect thereto in the case of revolving borrowings) of
the Company or a Subsidiary Guarantor or Indebtedness (and to correspondingly
reduce commitments with respect thereto in the case of revolving borrowings) of
any Restricted Subsidiary that is not a Subsidiary Guarantor; provided that, so
long as the provisions of Section 4.12 are in effect, only repayment of Senior
Indebtedness incurred under the Existing Credit Facility (but not any
refinancing thereof other than a credit facility with commercial banks and other
lenders) or consisting of the 9.9% Debentures due 2000 of ARCO Chemical shall
constitute a repayment of Indebtedness permitted pursuant to this clause (i); or
(ii) to acquire a controlling interest or a joint venture interest (to
the extent otherwise permitted by the Indentures) in another business or, the
making of a capital expenditure or the acquisition of other long-term assets, in
each case, in a Permitted Business (or enter into a binding commitment for any
such expenditure or acquisition); provided that such binding commitment shall be
treated as a permitted application of Net Proceeds from the date of such
commitment until and only until the earlier of (x) the date on which such
expenditure or acquisition is consummated and (y) the 180th day following the
expiration of the aforementioned 360 day period. If the expenditure or
acquisition contemplated by such binding commitment is not consummated on or
before such 180th day and the Company shall not have applied such Net Proceeds
pursuant to clause (i) above on or before such 180th day, such commitment shall
be deemed not to have been a permitted application of Net Proceeds at any time;
provided that, so long as the provisions of Section 4.12 are in effect, the
Company may not apply Net Proceeds of a Significant Asset Sale pursuant to
clause (ii) above to satisfy its obligations to apply such proceeds pursuant to
this paragraph except to the extent that the provisions of the Existing Credit
Facility (but not any refinancing thereof other than a credit facility with
commercial banks and other lenders) require a mandatory prepayment from such
proceeds but the requisite lenders thereunder have waived such mandatory
prepayment.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Existing Credit Facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
the Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this Section 4.09(b) will be
deemed to constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $25 million, the
Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes and, (x) if the
Company is required to do so under the terms of any other Indebtedness ranking
pari passu with such
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Notes, such other Indebtedness, and (y) if the Company elects to do so, any
Existing ARCO Chemical Debt, on a pro rata basis with the Notes, that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth herein.
To the extent that the aggregate amount of Notes (and any other pari passu
Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, the Company may, subject to the
other terms of the Indenture, use any remaining Excess Proceeds for general
corporate purposes.
If the aggregate principal amount of Notes surrendered by Holders thereof
in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.
Upon completion of the offer to purchase made under the Indenture, the
amount of Excess Proceeds shall be reset at zero.
(d) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with any Asset
Sale Offer.
Section 4.10. Limitation on Affiliate Transactions. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on an arms-length basis and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, a Board Resolution set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $25 million, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an investment banking firm of national standing; provided that:
(i) transactions or payments pursuant to any employment arrangements or
employee, officer or director benefit plans or arrangements entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) any Restricted Payment permitted by Section 4.07 of the type
described in clause (i) or (ii) of the first paragraph thereof;
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(iv) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Restricted Subsidiaries;
(v) transactions entered into on an arms-length basis in the ordinary
course of business between the Company or any of its Restricted Subsidiaries and
any Joint Venture;
(vi) sales (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable and the
provision of billing, collection and other services in connection therewith, in
each case, to an Accounts Receivable Subsidiary in connection with any
Receivables Facility; and
(vii) transactions pursuant to any contract or agreement in effect on the
date of the Indenture as the same may be amended, modified or replaced from time
to time so long as any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the Company and its
Restricted Subsidiaries than the contract or agreement as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution); in each
case, shall not be deemed to be Affiliate Transactions and therefore not subject
to the requirements of clauses (i) and (ii) of the initial sentence above.
Section 4.11. Limitation on Liens. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (except Permitted Liens) on any asset
now owned or hereafter acquired, or any income or profits therefrom, unless all
payments due under the Indenture and the Notes or the Subsidiary Guarantees are
secured on an equal and ratable basis with the obligations so secured (or, if
such obligations are subordinated by their terms to the Notes or the
Subsidiary Guarantees, prior to the obligations so secured) until such time as
such obligations are no longer so secured.
(b) The Company and its Subsidiaries shall also comply with the provisions
of Section 4.12(a) until such provisions cease to be in effect pursuant to
Section 4.12(b).
Section 4.12. Equal and Ratable Liens. (a) To the extent the Company or
any Subsidiary of the Company grants a Lien upon any of its property or assets
to secure the Existing Credit Facility Obligations, the Company or such
Subsidiary, as the case may be, shall, contemporaneously with the granting of
such Lien, secure the Indenture Obligations equally and ratably with the
Existing Credit Facility Obligations secured by such Lien.
(b) Notwithstanding the foregoing, from and after the date when all Liens
granted in favor of the holders of Existing Credit Facility Obligations are
released (and are not concurrently replaced with any new Liens on any asset of
the Company or any of its Restricted Subsidiaries securing Existing Credit
Facility Obligations), the provisions of this Section 4.12 will no longer apply.
The provisions of Section 4.11 will, however, continue to apply.
Section 4.13. No Amendment to Subordination Provisions. The Company will
not amend, modify or alter the Senior Subordinated Notes Indenture in any way
that would (i) increase the principal of, advance the final maturity date of or
shorten the
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Weighted Average Life to Maturity of any Senior Subordinated Notes such that the
final maturity date of the Senior Subordinated Notes is earlier than the 91st
day following the final maturity date of the Notes or (ii) amend the
subordination provisions of the Senior Subordinated Notes Indenture or any of
the defined terms used therein in a manner that would be adverse to the holders
of the Notes.
Section 4.14. Repurchase of Notes upon a Change in Control. (a) Upon the
occurrence of a Change of Control, each Holder will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company will mail, or at the Company's
request the Trustee will mail, a notice to each Holder offering to repurchase
the Notes held by such Holder pursuant to the procedures specified in such
notice.
(b) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
and not withdrawn pursuant to the Change of Control Offer, (2) deposit with the
applicable Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered, and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such Note will be in a principal amount
of $1,000 or an integral multiple thereof.
(d) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer at
the same or a higher purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.15. Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Leaseback Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if: (a) the Company
or such Restricted
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Subsidiary, as the case may be, could have (i) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such Sale and Leaseback
Transaction pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.06(a) (whether or not such covenant has ceased to be otherwise in
effect pursuant to Section 4.18) and (ii) incurred a Lien to secure such
Indebtedness pursuant to Section 4.11 without securing the Notes; and (b) the
gross cash proceeds of such Sale and Leaseback Transaction are at least equal to
the fair market value (as conclusively determined by the Board of Directors) of
the property that is the subject of such Sale and Leaseback Transaction.
Section 4.16. Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, except to such extent as would not be material
to the Company and its Subsidiaries taken as a whole.
Section 4.17. Limitation on Accounts Receivable Facilities. The Company
may, and any of its Restricted Subsidiaries may, sell (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) at any time and from time to time, accounts receivable to any
Accounts Receivable Subsidiary; provided that the aggregate consideration
received in each such sale is at least equal to the aggregate fair market value
of the receivables sold.
Section 4.18. Limited Applicability of Covenants when Notes are rated
Investment-Grade. Notwithstanding the foregoing, the Company's and its
Restricted Subsidiaries' obligations to comply with the provisions of Sections
4.06, 4.07, 4.08, 4.09, 4.10, 4.16, 4.17 and 4.22 will terminate and cease to
have any further effect from and after the first date when the Notes are rated
Investment Grade.
Section 4.19. Existence. Subject to Articles 4 and 5 of this Indenture,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each such Subsidiary and the rights (whether
pursuant to charter, partnership certificate, agreement, statute or otherwise),
material licenses and franchises of the Company and each such Subsidiary;
provided that the Company shall not be required by this Section 4.19 to preserve
any such right, license or franchise, or the existence of any Restricted
Subsidiary, if the Company shall determine that the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole.
Section 4.20. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (a) all material taxes, assessments and governmental charges levied
or imposed upon (i) the Company or any such Subsidiary, (ii) the income or
profits of any such Subsidiary which is a corporation or (iii) the property of
the Company or any such Subsidiary and (b) all material lawful claims for labor
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such Subsidiary; provided that the Company shall
not be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good
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faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
Section 4.21. Maintenance of Properties and Insurance. The Company will
cause all material assets necessary in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
will cause to be made all necessary repairs, renewals and replacements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided that nothing in this Section 4.21 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
assets or disposing or abandoning of any of them, if such discontinuance,
disposal or abandonment is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.
The Company will maintain, and will cause each of its Restricted
Subsidiaries to maintain (either in the Company's name or in such Subsidiary's
own name) insurance on all their respective properties consistent with the
insurance maintained on the Issue Date or otherwise in at least such amounts
(with no materially greater risk retention) and against at least such risks as
are usually maintained, retained or insured against in the same general area by
companies of established repute owning similar properties in such area and
engaged in the same or a similar business, in either case, to the extent
available to the Company and its Restricted Subsidiaries on commercially
reasonable terms.
Section 4.22. Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other Indebtedness of the Company or any of its Restricted
Subsidiaries (except Indebtedness of such Restricted Subsidiary or a Restricted
Subsidiary of such Restricted Subsidiary) unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture in the form of
Exhibit B hereto providing for the Guarantee of the payment of the Notes by such
Restricted Subsidiary and shall deliver an Opinion of Counsel to the Trustee
pursuant to paragraph (c) below; provided that this paragraph shall not be
applicable to (x) any Guarantee of any Restricted Subsidiary that existed at the
time such Person became a Restricted Subsidiary and was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary, (y) Guarantees of Indebtedness of a Restricted Subsidiary that is a
Foreign Subsidiary by a Restricted Subsidiary that is a Foreign Subsidiary or
(z) the granting of Liens by a Joint Venture Subsidiary to secure Indebtedness
under the Existing Credit Facility and the Senior Secured Notes. If the Notes
are (A) pari passu with the Guaranteed Indebtedness, then the Subsidiary
Guarantee shall be pari passu with, or senior to, the guarantee of such
Guaranteed Indebtedness or (B) senior to the Guaranteed Indebtedness, then the
Subsidiary Guarantee shall be senior to the guarantee of such Guaranteed
Indebtedness at least to the extent that the Notes are senior to such Guaranteed
Indebtedness.
(b) Notwithstanding the foregoing, each Subsidiary Guarantee by a
Restricted Subsidiary shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all the Company's and each Restricted Subsidiary's
Capital Stock in such Restricted Subsidiary
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(which sale, exchange or transfer is not prohibited by the Indenture) as
provided in Section 5.03(b), (ii) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guarantee (or, in the case of
the Subsidiary Guarantees of Lyondell Chemical Worldwide, Inc. and Lyondell
Chemical Nederland, Ltd. issued on the Issue Date, the release or discharge of
its Guarantee of Indebtedness under the Existing Credit Facility), except a
discharge or release by or as a result of payment under such Guarantee, and
(iii) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the Indenture.
(c) The Opinion of Counsel described above shall be to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and constitutes a valid and binding obligation of such Subsidiary,
enforceable against such Subsidiary in accordance with its terms (subject to
customary exceptions).
Section 4.23. Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend such term or provision in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
ARTICLE 5
Consolidation, Merger or Sale of Assets
Section 5.01. Consolidation, Merger or Sale of Assets by the Company. (a)
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all its assets in one or more related
transactions, to another corporation, Person or entity unless:
(i) the Company is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the corporation formed by or surviving any such consolidation or
merger (if other than the Company) or the corporation to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the Obligations of the Company under the Notes, the Indenture
and the Security Documents to which it is a party pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists; and
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(iv) the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (A) will have a Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) except with respect to a consolidation or
merger of the Company with or into a Person that has no outstanding
Indebtedness, will, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.06(a). The foregoing shall not prohibit the merger or
consolidation of a Wholly Owned Restricted Subsidiary with the Company; provided
that, in connection with any such merger or consolidation, no consideration
(other than common stock in the surviving Person or the Company) shall be issued
or distributed to the stockholders of the Company.
(b) The Company will not lease all or substantially all its assets to
another Person.
Section 5.02. Successor Company Substituted. (a) Except as provided in
Section 5.02(b), upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all the assets
of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" shall refer instead to the successor corporation), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and the predecessor Company shall be released from all its obligations hereunder
and under the Notes.
(b) The sale, assignment, transfer, lease, conveyance or other disposition
by the Company of all or substantially all its property or assets taken as a
whole to one or more of the Company's Subsidiaries shall not relieve the Company
from its obligations under the Indenture and the Notes.
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor. (a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor unless:
(i) subject to the provisions of Section 5.03(b) below, the Person formed
by or surviving any such consolidation or merger (if other than the Company or
such Subsidiary Guarantor) assumes all the obligations of such Subsidiary
Guarantor, pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes;
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(ii) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(iii) the Company would, at the time of such transaction and after giving
pro forma effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, (A) have a Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) except with
respect to a consolidation or merger with a Person that has no outstanding
Indebtedness, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in 4.06(a).
All the Subsidiary Guarantees issued pursuant to clause (i) above shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all such Subsidiary Guarantees had been issued
at the date of the execution hereof.
(b) (i) The requirements of clauses (i) and (iii) of Section 5.03(a) will
not apply in the case of a consolidation with or merger with or into the Company
and the requirements of clause (iii) of Section 5.03(a) will not apply in the
case of a consolidation with or merger with or into another Subsidiary
Guarantor.
(ii) In the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all the Capital Stock of any Subsidiary Guarantor
to any Person that is not an Affiliate of the Company permitted by the
applicable provisions of the Indenture, such Subsidiary Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture.
Section 5.04. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 7.01 and 7.03, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition referred to in Section 5.01 or
5.03 complies with the applicable provisions of this Indenture.
ARTICLE 6
Remedies
Section 6.01. Events of Default. Each of the following constitutes an
"Event of Default":
(a) a default in the payment of interest or any Liquidated Damages on the
Notes when due, which has continued for 30 days;
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(b) a default in the payment when due of principal of or premium on, any
Note when due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise;
(c) the failure by the Company to comply with its obligations under
Article 5 above and under Section 4.09, and under Section 4.14;
(d) the Company or any Subsidiary Guarantor defaults in the performance of
or breaches any other covenant or agreement in this Indenture or under the Notes
(other than (a), (b) or (c) above) and such default or breach continues for a
period of 60 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) any default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Significant
Subsidiaries (or any Indebtedness for money borrowed Guaranteed by the Company
or any of its Significant Subsidiaries if the Company or a Significant
Subsidiary does not perform its payment obligations under such Guarantee within
any grace period provided for in the documentation governing such Guarantee)
and, whether such Indebtedness or Guarantee exists on the date of the indenture
or is thereafter created, which default (a) constitutes a Payment Default or (b)
results in the acceleration of such Indebtedness prior to its Stated Maturity,
and in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or that has been so accelerated, aggregates $50 million or more;
(f) failure by the Company or any of its Significant Subsidiaries to pay a
final judgment or final judgments aggregating in excess of $50 million, which
judgment or judgments are not paid, discharged or stayed for a period of 60
days;
(g) a court having jurisdiction in the premises enters a decree or order
for (i) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all the property and
assets of the Company or any Significant Subsidiary or (iii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days;
(h) the Company or any Significant Subsidiary (i) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all the property and assets of the Company or any
Significant Subsidiary or (iii) effects any general assignment for the benefit
of creditors;
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(i) except as permitted by the Indenture, any Subsidiary Guarantee issued
hereunder shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under the Subsidiary
Guarantees issued thereunder; or
(j) any of the Security Documents ceases to be in full force and effect,
or any of the Security Documents ceases to give the holders of the Notes any of
the Liens purported to be created thereby, or any of the Security Documents is
declared null and void or the Company or any Restricted Subsidiary denies in
writing that it has any further liability under any Security Document or gives
written notice to such effect (in each case other than in accordance with the
terms of this Indenture (including Section 14.01(b)) or the terms of the
Existing Credit Facility or the Security Documents (including the cessation of
effectiveness of any Security Document in connection with a release of all
collateral covered thereby in accordance with the terms of this Indenture, the
Existing Credit Facility and such Security Document) or unless waived by the
requisite lenders under the Existing Credit Facility if, after the waiver, the
Company is in compliance with Section 4.12; provided that if a failure of the
sort described in this clause (j) is susceptible of cure, no Event of Default
shall arise under this clause (j) with respect thereto until 30 days after
notice of such failure shall have been given to the Company by the Trustee or
Holders of at least 25% in principal amount of the then outstanding Notes issued
under the Indenture.
Section 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or any Subsidiary Guarantor) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then Outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders (the "Acceleration
Notice")), may, and the Trustee at the request of such Holders shall, declare
the principal of, premium, if any, and accrued but unpaid interest and
Liquidated Damages, if any, on all the Notes to be due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest and Liquidated Damages, if any, shall be immediately due and payable.
If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs
with respect to the Company or any Subsidiary Guarantor, the principal of,
premium, if any, accrued interest and Liquidated Damages, if any, on the Notes
then Outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
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 or interest and Liquidated Damages on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes 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 Past Defaults. The Holders of at least a majority
in principal amount of the outstanding Notes, by written notice to the Company
and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences under the Notes, if (i) all
existing Events of Default, other than the nonpayment of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction. 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. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes may 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. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders.
Section 6.06. Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Notes unless:
(a) the Holder gives the Trustee written notice of a continuing Event of
Default;
(b) the Holders of at least 25% in aggregate principal amount of
Outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt thereof and the offer of security or indemnity; and
(e) during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes do not give the Trustee a
direction inconsistent with the request.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
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 Section 6.01(a) or (b) 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 or any other obligor for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover amounts due the Trustee under Section 7.08,
including 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 as may be necessary
or advisable in order 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 any other obligor upon the Notes), its
creditors or its property 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 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 7.08. 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 7.08 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 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 Notes 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.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article or receives any money from the Collateral Agent as the distribution
of proceeds received upon realization of any Collateral, it shall pay out the
money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.08, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest and Liquidated Damages,
respectively; and
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Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10 upon five Business Days prior notice to
the Company.
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 and expenses, 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 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by
Holders of more than 10% in aggregate principal amount of the then Outstanding
Notes.
Section 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, any other obligor upon the Notes, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.14. 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 or other similar
law wherever enacted, now or at any time hereafter in force, that would prohibit
or forgive the Company from paying all or any portion of the principal of (or
premium, if any), interest or Liquidated Damages, if any, on the Notes
contemplated herein or in the Notes or that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenant 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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ARTICLE 7
The Trustee
Section 7.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(i) 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
(ii) 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, 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 examine the
certificates and opinions 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).
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) 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 (i) this paragraph does not
limit the effect of Section 7.01(a); (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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 6.06.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(e) 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 Sections 7.01
and 7.03.
Section 7.02. Notice of Defaults. (a) Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Register, notice of such Default hereunder
actually known to the Trustee unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium (if any) or interest and Liquidated Damages, if
any, on, any Note, the Trustee may withhold such notice if and so long as the
board of directors, the executive committee or a trust committee of
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Responsible Officers of the Trustee determines that the withholding of such
notice is not opposed to the interests of the Holders.
(b) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any event or of any Default (except default in the
payment of monies to the Trustee which are required to be paid to the Trustee on
or before a specified date or within a specified time after receipt by the
Trustee of a notice or a certificate which was in fact received), unless the
Trustee shall receive from the Company or a Holder a notice stating that the
same has occurred and is continuing, and specifying the same, and in the absence
of such notice the Trustee may conclusively assume that the same does not exist,
except as aforesaid.
Section 7.03. Certain Rights of Trustees. Subject to the provisions of
Section 7.01:
(i) 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, direction, consent, order, bond, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order thereof, and any
resolution of any Person's board of directors (or any committee thereof) shall
be sufficiently evidenced if certified by an Officer of such Person as having
been duly adopted and being in full force and effect on the date of such
certificate;
(iii) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon the Officer's Certificates of the Company;
(iv) the Trustee may consult with counsel of its selection 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;
(v) in case an Event of Default occurs and is continuing, the Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to it against any loss, liability or expense
which might be incurred by it in compliance with such request or direction;
(vi) 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, direction, consent, order, bond, note, other
evidence of indebtedness or other paper or document;
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(vii) 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
(viii) the rights, privileges, protections, 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 7.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on
Form T-1 supplied to the Company in connection with the registration of any
Notes issued hereunder will be true and accurate subject to the qualifications
set forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes or the
proceeds thereof.
Section 7.05. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company' use of the proceeds from the Notes, it shall not be
responsible for any statement in the offering memorandum for the Notes or in the
Indenture or the Notes (other than its certificate of authentication), the acts
of a prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.
Section 7.06. May Hold Notes. The Trustee, any Authenticating Agent, any
Paying Agent, any Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
Section 7.09 and Section 7.14, may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Registrar or such other agent.
Section 7.07. Money Held in Trust. Money held by the Trustee in trust
hereunder 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 money
received by it hereunder except as otherwise agreed in writing with the Company.
Section 7.08. Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
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(b) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to hold
it harmless against, any loss, damage, claims, liability or expense (including
taxes, other than taxes based on the income of the Trustee) incurred without
negligence or bad faith on its part, 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,
a Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Company' payment obligations pursuant to this Section 7.08 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(g) or 6.01(h), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.09. Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, within 90 days the Trustee
shall either eliminate such conflicting interest, apply to the SEC for
permission to continue as Trustee with such conflicting interest, or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
TIA and this Indenture. To the extent permitted by such Act, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Original Notes and Additional Notes, or a trustee
under any other indenture between the Company and the Trustee.
Section 7.10. Corporate Trustee Required; Eligibility. (a) There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $100,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 7.10
and to the extent permitted by the TIA, the combined capital and surplus of such
Person 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 Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 7.11. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.12.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 7.12 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.12 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If at any time:
(i) the Trustee shall fail to comply with Section 7.09 after written
request therefor by the Company or by any Holder who has been a bona fide Holder
for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 7.10 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(iii) 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, (A) the Company may remove the Trustee, or (B)
subject to Section 6.11, any Holder who has been a bona fide Holder for at least
six months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.
(d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
shall promptly appoint a successor Trustee and shall comply with the applicable
requirements of Section 7.12. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 7.12,
become the successor Trustee and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner required by
Section 7.12, then, subject to Section 6.11, any Holder who has been a bona fide
Holder for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.10. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
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Section 7.12. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee, 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) 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, powers and trusts referred to above.
(c) 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 7.
Section 7.13. Merger, Conversion, Consolidation or Succession to Business.
(a) Any corporation 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 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 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 7.14. Preferential Collection of Claims Against the Company. (a)
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Notes), the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against the Company (or any such
other obligor).
Section 7.15. Appointment of Authenticating Agent. The Trustee may appoint
an Authenticating Agent acceptable to the Company to authenticate the Notes. Any
such appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer, a copy of which instrument shall be promptly furnished to
the Company. Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication (or execution of a certificate of
authentication) by the Trustee includes authentication (or execution of a
certificate of authentication) by such Authenticating Agent. An Authenticating
Agent has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
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ARTICLE 8
Holders' List and Reports by Trustee and the Company
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing. (a) The Company will furnish or cause to be
furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date, and
(ii) 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, that if and so long as the Trustee shall be the
Registrar, no such list need be furnished pursuant to this Section 8.01.
(b) The Company will promptly notify the Trustee when any Notes are listed
on any stock exchange and of any delisting thereof.
Section 8.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in Section 8.01 and the names and addresses
of Holders received by the Trustee in its capacity as Registrar; provided,
however, that if and so long as the Trustee shall be the Registrar, the Register
shall satisfy the requirements relating to such list. None of the Company, the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 8.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
(c) Every Holder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the TIA.
Section 8.03. Reports by Trustee. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the TIA at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the TIA, the Trustee shall, within 60
days after each May 15, following the date of this Indenture deliver to Holders
a brief report, dated as of such May 15, which complies with the provisions of
such Section 313(a). A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each
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stock exchange, if any, upon which any Notes are listed, with the SEC and with
the Company.
ARTICLE 9
Amendment, Supplement or Waiver
Section 9.01. Without Consent of the Holders. (a) Without the consent of
any Holder, the Company and the Trustee may enter into one or more indentures
supplemental hereto, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to provide for the assumption by a successor of the obligations of the
Company under this Indenture,
(iii) to provide for uncertificated Notes in addition to or in place of
certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code,
(iv) to add Subsidiary Guarantees with respect to the Notes, to grant a
Lien under this Indenture to the Trustee as security for the Notes, to confirm
and evidence the release, termination or discharge of any Subsidiary Guarantee
or any such Lien with respect to or securing the Notes when such release,
termination or discharge is permitted under this Indenture,
(v) to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power conferred upon the Company,
(vi) to provide for or confirm the issuance of Additional Notes in
accordance with the terms of the Indenture,
(vii) to make any change that does not adversely affect the rights of any
Holder under the Notes or this Indenture, or
(viii) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA or otherwise.
Section 9.02. With Consent of Holders. (a) Subject to Section 6.07, the
Company, the Trustee and (if applicable) any Subsidiary Guarantor may amend or
supplement this Indenture or the Notes with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes, and any past Default or compliance with any provisions may also be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes.
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(b) Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not (with respect to any Notes held by a non-
consenting Holder):
(i) change the Stated Maturity of the principal of, or any installment of
interest on, any Note,
(ii) reduce the principal amount of or premium, if any, or interest or
Liquidated Damages, if any, on any Note,
(iii) reduce any amount payable on redemption of the Notes or upon the
occurrence of an Event of Default or reduce the Change of Control Payment or the
amount to be paid in connection with an Asset Sale Offer,
(iv) change the place or currency of payment of principal of or premium, if
any, or interest or Liquidated Damages, if any, on any Note,
(v) impair the right to institute suit for the enforcement of any payment
on or after the Stated Maturity (or, in the case of a redemption, on or after
the Redemption Date) of any Note,
(vi) reduce the above-stated percentage of outstanding Notes the consent of
whose Holders is necessary to modify or amend the Indenture,
(vii) waive a default in the payment of principal of or premium, if any,
or interest or Liquidated Damages, if any, on the Notes (except as set forth in
Section 6.04),
(viii) reduce the percentage or aggregate principal amount of outstanding
Notes the consent of whose Holders is necessary for waiver of compliance with
provisions of the Indenture or for waiver of Defaults,
(ix) modify or change any provision of the Indenture affecting the ranking
of the Notes or the Subsidiary Guarantees in a manner adverse to the Holders of
the Notes,
(x) release any Subsidiary Guarantor from any of its obligations under its
Subsidiary Guarantee or the Indenture other than in accordance with the
provisions of the Indenture, or amend or modify any provision relating to such
release, or
(xi) directly or indirectly release the Liens created by the Security
Documents on all or substantially all the Collateral (other than in accordance
with the terms of the Existing Credit Facility or the Security Documents or with
the consent of the requisite lenders under the Existing Credit Facility if,
after such consent, the Company is in compliance with Section 4.12).
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(c) 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.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, 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 supplemental indenture or the effectiveness of any such amendment,
supplement or waiver.
Section 9.03. Execution of Amendments, Supplements or Waivers. The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment, supplement or waiver 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, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by the
Company and that such amendment, supplement or waiver is a valid and binding
agreement of the Company, enforceable against it in accordance with its terms
(subject to customary exceptions).
Section 9.04. Revocation and Effect of Consents. (a) 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 that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 9.04, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Company received by the Trustee or the Company, as the case may be, before the
date on which the Trustee receives an Officer's Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 1.08.
(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (viii) of Section 9.02(b). In that case, the amendment, supplement or
waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of such Note or any Note that evidences all or any part of the
same debt as the consenting Holder's Note.
Section 9.05. Conformity with TIA. (a) Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 9.06. Notation on or Exchange of Notes. (a) If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Company and in accordance with the specific direction of the Company)
request the
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Holder to deliver its Note to the Trustee. The Trustee shall (if required by the
Company and in accordance with the specific written direction of the Company)
place an appropriate notation on the Note about the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment, supplement or waiver.
ARTICLE 10
Redemption of Notes
Section 10.01. Right of Redemption. The Notes will not be redeemable at the
option of the Company prior to May 1, 2004. Thereafter, the Notes will be
redeemable, at the option of the Company, in whole or in part, at any time or
from time to time on and prior to maturity. Such redemption may be made upon
notice mailed by first-class mail to each Holder's registered address in
accordance with Section 10.05. The Notes will be so redeemable at the following
Redemption Prices (expressed as a percentage of principal amount on the relevant
Redemption Date), plus accrued and unpaid interest and Liquidated Damages, if
any, to the relevant Redemption Date, if redeemed during the 12-month period
commencing on May 1 of the years set forth below:
REDEMPTION
YEAR PRICE
---- -----------
2004............................. 104.938%
2005............................. 102.469%
2006 and thereafter.............. 100.000%
Section 10.02. Applicability of Article. Redemption or purchase of Notes as
permitted by Section 10.01 shall be made in accordance with this Article 10.
Section 10.03. Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Company of the Notes, the Company shall, at
least 30 days prior to the Redemption Date initially fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed.
Section 10.04. Selection by Trustee of Notes to Be Redeemed. In the case of
any partial redemption, selection of the Notes for redemption will be made not
more than 60 days prior to the Redemption Date by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the applicable Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part.
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(a) The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, interest and Liquidated Damages will cease to accrue
on Notes or portions thereof called for redemption.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion of
the principal of such Note that has been or is to be redeemed.
Section 10.05. Notice of Redemption. (a) Notice of redemption or purchase
as provided in Section 10.01 shall be deemed to have been given upon the mailing
by first class mail, postage prepaid, of such notice to each Holder of Notes to
be redeemed, at its registered address as recorded in the Register, not later
than 30 nor more than 60 days prior to the Redemption Date.
Any such notice shall state:
(i) the expected Redemption Date,
(ii) the Redemption Price,
(iii) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal
amounts) of the particular Notes to be redeemed,
(iv) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note to be redeemed, and that, unless the Company default
in making such redemption payment or any Paying Agent is prohibited from making
such payment pursuant to the terms of this Indenture, interest and Liquidated
Damages thereon shall cease to accrue from and after said date,
(v) the place or places where such Notes are to be surrendered for payment
of the Redemption Price and the name and address of the Paying Agent or Paying
Agents,
(vi) the CUSIP and other security identification numbers, if any, subject
to Section 3.12 hereof, and
(vii) the section of this Indenture pursuant to which the Notes are to be
redeemed.
Notices of redemption may not be conditional.
(b) Notice of such redemption or purchase of Notes to be so redeemed or
purchased at the election of the Company shall be given by the Company or, at
the written request of the Company delivered at least five Business Days prior
to the date proposed
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for the mailing of such notice, by the Trustee in the name and at the expense of
the Company; provided that such notice to the Trustee may be revoked by the
Company by written notice delivered to the Trustee prior to the date proposed
for the mailing of the notice of such redemption to the Holders.
(c) The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.
Section 10.06. Deposit of Redemption Price. (a) On or prior to 10:00 a.m.,
New York City time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, the Company shall segregate and hold in trust as provided in Section
4.03) an amount of money sufficient to pay the Redemption Price of, and any
accrued and unpaid interest and Liquidated Damages, if any, on, all the Notes or
portions thereof which are to be redeemed on that date.
Section 10.07. Notes Payable on Redemption Date. (a) Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless Company shall default in
the payment of the Redemption Price or any Paying Agent is prohibited from
paying the Redemption Price pursuant to the terms of this Indenture) such Notes
shall cease to bear interest and Liquidated Damages. Upon surrender of such
Notes for redemption in accordance with such notice, such Notes shall be paid by
the Company at the Redemption Price. Installments of interest and Liquidated
Damages, if any, whose Interest Payment Date is on or prior to the Redemption
Date shall be payable to the Holders of such Notes registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.07.
(b) On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and any accrued and unpaid interest and Liquidated Damages
on Notes called for redemption shall have been made available in accordance with
Section 10.06, the Notes (or the portions thereof) called for redemption will
cease to accrue interest and Liquidated Damages and the only right of the
Holders of such Notes (or portions thereof) will be to receive payment of the
Redemption Price of, and subject to the last sentence of Section 10.07(a), any
accrued and unpaid interest and Liquidated Damages, if any, on such Notes (or
portions thereof) to the Redemption Date. If any Note (or portion thereof)
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
and Liquidated Damages from the Redemption Date at the rate borne by the Note
(or portion thereof).
Section 10.08. Notes Redeemed in Part. Any Note that is to be redeemed only
in part shall be surrendered at a Place of Payment (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall
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authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, 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 Note so surrendered.
ARTICLE 11
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharges of Indenture. (a) This Indenture
shall cease to be of further effect (except as to any surviving rights of
transfer or exchange of Notes herein provided for), and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(i) either
(A) all Notes theretofore authenticated and delivered (other than (y)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 3.06, and (z) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust, as
provided in Section 4.03) have been delivered to the Trustee canceled or for
cancellation; or
(B) all such Notes not theretofore delivered to the Trustee canceled or
for cancellation
(x) have become due and payable, or
(y) will become due and payable at their Stated Maturity within one year,
or
(z) are to be called for redemption within one year under arrangements
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,
(ii) the Company has irrevocably deposited or caused to be deposited with
the Trustee an amount in United States dollars, U.S. Government Obligations, or
a combination thereof, sufficient to pay and discharge the entire Indebtedness
on such Notes not theretofore delivered to the Trustee canceled or for
cancellation, for principal (and premium, if any) and interest and Liquidated
Damages to the date of such deposit (in the case of Notes that have become due
and payable), or to the Stated Maturity or Redemption Date, as the case may be;
(iii) the Company has paid or caused to be paid all other sums then payable
hereunder by the Company; and
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(iv) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel each to the effect that all conditions precedent provided
for in this Section 11.01 relating to the satisfaction and discharge of this
Indenture have been complied with; provided that any such counsel may rely on
any Officer's Certificate as to matters of fact (including as to compliance with
the foregoing clauses (i), (ii) and (iii)).
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.08 and, if money shall
have been deposited with the Trustee pursuant to clause (ii) of Section
11.01(a), the obligations of the Trustee under Section 11.02, shall survive.
Section 11.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 4.03, all money deposited with the Trustee pursuant to
Section 11.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest and Liquidated Damages on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE 12
Defeasance and Covenant Defeasance
Section 12.01. Option of the Company to Effect Defeasance or Covenant
Defeasance. The Company may at its option by a Board Resolution, at any time,
elect to have either Section 12.02 or Section 12.03 applied to the Outstanding
Notes upon compliance with the conditions set forth below in this Article 12.
Section 12.02. Legal Defeasance and Discharge. Upon the exercise by the
Company under Section 12.01 of the option applicable to this Section 12.02, the
Company shall be deemed to have been discharged from any and all Obligations
with respect to all Outstanding Notes (and any Subsidiary Guarantor will be
discharged from any and all Obligations in respect of its Subsidiary Guarantee)
on the date which is the 123rd day after the deposit referred to in Section
12.04(a); provided that all of the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 12.05 hereof and the
other Sections of this Indenture referred to in clauses (i) and (ii) of this
Section 12.02, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of Outstanding Notes to receive
solely from the trust fund described in Section 12.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of,
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premium, if any, and interest and Liquidated Damages on such Notes when such
payments are due, (ii) the obligations of the Company with respect to such Notes
under Sections 1.06, 2.03, 3.03, 3.04, 3.05, 3.06, 3.13, 3.14, 4.01, 4.02, 4.03
and 12.05 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.08 hereof, and the obligations of the Company in connection therewith
and with this Article 12. Subject to compliance with this Article 12, the
Company may exercise its option under this Section 12.02 notwithstanding the
prior exercise of its option under Section 12.03 hereof with respect to the
Notes.
Section 12.03. Covenant Defeasance. Upon the exercise by the Company under
Section 12.01 of the option applicable to this Section 12.03, the Company shall
be released from its obligations under the covenants contained in Sections 4.06
through Section 4.18, Section 4.22, Article 14 and clause (iv) of Section
5.01(a) hereof with respect to the Outstanding Notes and no Default under
Section 6.01(e), (f) and (j) shall thereafter constitute a Default or Event of
Default on the date which is the 123rd day after the deposit referred to in
Section 12.04(a); provided that all of the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not Outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding for
all other purposes hereunder. For this purpose, such Covenant Defeasance means
that, with respect to the Outstanding Notes, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01(c) or (d), but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby.
Section 12.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 12.02 or Section
12.03 to the Outstanding Notes:
(a) the Company has deposited with the Trustee, in trust, money and/or
U.S. Government Obligations that through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount 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 (i) the principal of, premium, if any, and accrued interest and
Liquidated Damages, if any, on the Notes when such payments are due in
accordance with the terms of this Indenture and the Notes or (ii) in the case of
Legal Defeasance, accrued interest and Liquidated Damages, if any, on the Notes
through a scheduled redemption date and the principal of, and premium on the
Notes on such redemption date; provided that, at the time of deposit, the
Company irrevocably authorize the Trustee to issue a timely notice of redemption
and to take such other steps reasonably requested by the Trustee to ensure that
such redemption will be effectuated;
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(b) in the case of an election under Section 12.02, the Company has
delivered to the Trustee (i) either (x) an Opinion of Counsel to the effect that
Holders will not recognize income, gain or loss for Federal income tax purposes
as a result of the exercise by the Company of its option under this Article 12
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, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the Internal Revenue
Service to the same effect unless there has been a change in applicable Federal
income tax law after the date of this Indenture such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the Internal
Revenue Service to the same effect as the aforementioned Opinion of Counsel and
(ii) an Opinion of Counsel to the effect that, as a result of the creation of
the defeasance trust, the Company will not be required to register under the
Investment Company Act of 1940 and after the passage of 123 days following the
deposit, the trust fund will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law or any comparable provision of applicable law;
(c) in the case of an election under Section 12.03, the delivery by the
Company to the Trustee of (i) an Opinion of Counsel to the effect that, among
other things, the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance 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 and defeasance had
not occurred and (ii) an Opinion of Counsel to the effect that, as a result of
the creation of the defeasance trust, the Company will not be required to
register under the Investment Company Act of 1940 and after the passage of 123
days following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law or any comparable provision of applicable law;
(d) immediately after giving effect to such deposit on a pro forma basis,
no Event of Default, or event that after the giving of notice or lapse of time
or both would become an Event of Default, shall have occurred and be continuing
on the date of such deposit or during the period ending on the 123rd day after
the date of such deposit, and such deposit shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound;
(e) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge;
(f) the Company shall have delivered to the Trustee Officer's Certificates
stating that the deposit made by the Company pursuant to its election under
Sections 12.02 or 12.03 was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company with the intent
of defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) the Company shall have delivered to the Trustee Officer's Certificates
and an Opinion of Counsel, each stating that all conditions precedent provided
for relating to
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either the Legal Defeasance under Section 12.02 or the Covenant Defeasance under
Section 12.03 (as the case may be) have been complied with as contemplated by
this Section 12.04.
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 12.06, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 12.04 in respect of the Outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal of, premium, if any, and interest and Liquidated
Damages, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 12.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article 12 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 12.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
12.04(a) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 12.06. Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest and Liquidated Damages on any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest and Liquidated Damages has become due and payable shall be paid
to the Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 12.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 12.02
or 12.03, as the case may be, by reason of any order or judgment of any court or
governmental
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authority enjoining, restraining or otherwise prohibiting such application, then
the obligations of the Company under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
12.02 or 12.03 until such time as the Trustee or Paying Agent is permitted to
apply all such amounts in accordance with Section 12.02 or 12.03 hereof, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest and Liquidated Damages on any Note
following the reinstatement of its Obligations, the Company shall be subrogated
to the rights of the Holder of such Note to receive such payment from the
amounts held by the Trustee or Paying Agent.
ARTICLE 13
Subsidiary Guarantees
Section 13.01. The Guarantees. (a) Subject to the provisions of this
Article 13, each Subsidiary Guarantor hereby irrevocably and unconditionally
guarantees, jointly and severally, the full and punctual payment (whether at
Stated Maturity, upon acceleration, optional redemption, upon repurchase
following a Change of Control Offer or an Asset Sale Offer or otherwise) of the
principal of and premium, if any, and interest and Liquidated Damages, if any,
on, and all other amounts payable under, each Note provided for under this
Indenture, and the full and punctual payment of all other amounts payable by the
Company under this Indenture. Upon failure by the Company to pay punctually any
such amount, each Subsidiary Guarantor shall forthwith on demand pay the amount
not so paid at the place and in the manner specified in this Indenture.
Section 13.02. Guarantee Unconditional. The obligations of the Subsidiary
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall, to the fullest extent permitted by law,
not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Company under this Indenture or any Note, by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this Indenture or
any Note; provided that any such modification which increases the obligations of
each Subsidiary Guarantor hereunder shall not be effective as to such Subsidiary
Guarantor without its consent;
(c) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of the Company or any Subsidiary Guarantor
hereunder;
(d) any change in the corporate existence, structure or ownership of the
Company, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in this Indenture or any
Note;
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(e) the existence of any claim, set-off or other rights which the
Subsidiary Guarantors may have at any time against the Company, the Trustee or
any other Person, whether in connection with this Indenture or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the Company
for any reason of this Indenture or any Note, or any provision of applicable law
or regulation purporting to prohibit the payment by the Company of the principal
of or interest and Liquidated Damages on any Note or any other amount payable by
the Company under this Indenture; or
(g) any other act or omission to act or delay of any kind by the Company,
the Trustee or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of or defense to such Subsidiary Guarantor's obligations hereunder.
Section 13.03. Discharge; Reinstatement. The Subsidiary Guarantors'
obligations hereunder shall remain in full force and effect until the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
and all other amounts payable by the Company under this Indenture shall have
been paid in full. If at any time any payment of the principal of, premium, if
any, or interest and Liquidated Damages, if any, on any Note or any other amount
payable by the Company under this Indenture is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Subsidiary Guarantors' obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
Section 13.04. Waiver by the Subsidiary Guarantors. The Subsidiary
Guarantors irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against the Company or any other Person.
Section 13.05. Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Company under this Article 13, the Subsidiary
Guarantor making such payment shall be subrogated to the rights of the payee
against the Company with respect to such obligation; provided that such
Subsidiary Guarantor shall not enforce either (i) any right to receive payment
by way of subrogation against the Company or against any direct or indirect
security for such obligation, or any other right to be reimbursed, indemnified
or exonerated by or for the account of the Company in respect thereof or (ii)
any right to receive payment, in the nature of contribution or for any other
reason, from any other Subsidiary Guarantor with respect to such payment, in
each case so long as any amount payable by the Company hereunder or under the
Notes remains unpaid.
Section 13.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Company under this Indenture or the Notes
is stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise
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subject to acceleration under the terms of this Indenture shall nonetheless be
payable by the Subsidiary Guarantors hereunder forthwith on demand by the
Trustee or the Holders.
Section 13.07. Limits of Guarantees. Notwithstanding anything to the
contrary in this Article 13, each Subsidiary Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of state law. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee and this Article 13 shall be limited to the maximum
amount that would not render such Subsidiary Guarantor's obligations subject to
avoidance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law.
Section 13.08. Execution and Delivery of Note Guarantee. To evidence its
Subsidiary Guarantee set forth in Section 13.01, each Subsidiary Guarantor
hereby agrees that this Indenture (or a supplemental indenture in the form of
Exhibit B hereto) shall be executed on behalf of such Subsidiary Guarantor by
one of its Officers.
The signature of an Officer of a Subsidiary Guarantor on the Indenture
shall bind such Subsidiary Guarantor, notwithstanding that such individual has
ceased to hold such office prior to the authentication and delivery of any Note
or did not hold such office at the date of such Note.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
ARTICLE 14
Security Arrangements
Section 14.01. Security. (a) In order to secure the Indenture Obligations
equally and ratably with the Existing Credit Facility Obligations and, with
respect to certain of the Collateral, the Existing ARCO Chemical Debt, the
Company will, and will cause each of its Restricted Subsidiaries named in any
Existing Security Document as a party thereto, to execute and deliver to the
Collateral Agent prior to the Issue Date each Existing Security Document to
which it is a party. The Company and its Restricted Subsidiaries shall comply
with all covenants and agreements contained in the Security Documents the
failure to comply with which would have a material and adverse effect on the
Liens purported to be created thereby, unless such failure to comply is waived
by the requisite lenders under the Existing Credit Facility if, after that
waiver, the Company is in compliance with Section 4.12.
(b) The Trustee and each holder of each Note by its acceptance of that
Note acknowledges and agrees that:
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(i) this Indenture, as originally executed and delivered by the parties
hereto, does not create any Lien on any property or securities which secures the
Indenture Obligations or this Indenture;
(ii) the Existing Security Documents, when executed and delivered by the
parties thereto, will comply with the provisions of Section 4.12;
(iii) the Existing Security Documents provide, and any Security Document
that becomes effective after the Issue Date, may provide, that the Liens created
thereby or thereunder automatically will be released and extinguished with
respect to any property or security that is transferred or otherwise disposed of
in accordance with the terms of the Existing Credit Facility, including any
property or security that is the subject of a Major Asset Sale and is
transferred to a Subject Asset Transferee;
(iv) without the necessity of any consent of or notice to the Trustee or
any holder of Indenture Obligations, the Company and the Collateral Agent may
amend, modify, supplement or terminate any Security Document as long as the
Company remains in compliance with Section 4.12;
(v) as among the Trustee and the holders of Indenture Obligations and the
lenders under the Existing Credit Facility and the Collateral Agent, those
lenders and the Collateral Agent will have the sole ability to control and
obtain remedies with respect to all Collateral (including on sale or liquidation
of any Collateral after acceleration of the Notes, the Existing Credit Facility
Obligations or the Existing ARCO Chemical Debt) without the necessity of any
consent of or notice to the Trustee or any such holder;
(vi) any or all Liens granted under the Security Documents for the benefit
of the Holders will be automatically released, without the necessity of any
consent of the Trustee or any Holders, upon a release of such Lien or Liens
pursuant to the terms of the Security Documents and the Existing Credit Facility
or if such release is approved by the requisite lenders under the Existing
Credit Facility.
(vii) the relative rights of the holders of Indenture Obligations and the
holders of Indebtedness or other obligations secured by Liens on the Collateral
are governed by, and are subject to the terms and conditions of, the Security
Documents and not this Indenture; and
(viii) without the necessity of any consent of or notice to the Trustee or
any holder of Indenture Obligations, the Company may, on behalf of itself or any
of its Restricted Subsidiaries, request and instruct the Collateral Agent to, on
behalf of each secured party under the Security Documents, (A) execute and
deliver to the Company, for the benefit of any Person, such release documents as
the Company may reasonably request, of all liens and security interests held by
the Collateral Agent in such assets, and such Person shall be entitled to rely
conclusively on such release document, and (B) deliver any such assets in the
possession of the Collateral Agent to the Company.
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Section 14.02. Notice of Payment, Discharge or Defeasance. The Trustee and
each Holder, by its acceptance of a Note, agree that upon the payment in full or
discharge pursuant to Article 11 of the Indenture Obligations, the Trustee shall
without notice to or consent of any Holder, upon the written request of the
Company, certify to the Collateral Agent, in writing, that the Indenture
Obligations have been paid in full, or that this Indenture has been discharged
in accordance with Article 11.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
LYONDELL CHEMICAL COMPANY
By:
--------------------------
Name:
Title:
LYONDELL CHEMICAL WORLDWIDE, INC.,
as a Subsidiary Guarantor
By:
--------------------------
Name:
Title:
LYONDELL CHEMICAL NEDERLAND, LTD.,
as a Subsidiary Guarantor
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF NOTE]
LYONDELL CHEMICAL COMPANY.
9 7/8% Senior Secured Note, Series B, due 2007
No.________ CUSIP No. __________
$ __________
LYONDELL CHEMICAL COMPANY, a Delaware corporation (the "Company", which
term includes any successor Persons under the Indenture hereinafter referred
to), for value received promises to pay to ___________, or its registered
assigns, the principal sum of __________________________________ Dollars
($___________) [or such other amount as indicated on the Schedule of Exchanges
of Securities attached hereto]/1/, on May 1, 2007.
Interest Rate: 9 7/8% per annum.
Interest Payment Dates: May 1 and November 1 of each year commencing
November 1, 1999.
Regular Record Dates: April 15 and October 15 of each year.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
- -----------
/1/ To be included in any Global Note
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.
LYONDELL CHEMICAL COMPANY
By:_________________________
Name:
Title:
A-2
<PAGE>
(Form of Trustee's Certificate of Authentication)
This is one of the 9 7/8% Senior Secured Notes, Series B, due 2007 referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: ______________ By:_________________________
Authorized Signatory
A-3
<PAGE>
[REVERSE SIDE OF NOTE]
LYONDELL CHEMICAL COMPANY
9 7/8% Senior Secured Note, Series B, due 2007
(1) Principal and Interest. The Company agrees to pay the principal of this
Note on May 1, 2007.
The Company agrees to pay interest on the principal amount of this Note on
each Interest Payment Date, as set forth below, at the rate of 9 7/8% per annum.
Interest will be payable semi-annually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the Regular Record
Date immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing November 1, 1999.
[The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated May 17, 1999, among the Company, the Subsidiary
Guarantors party thereto and the Initial Purchasers named therein (the
"Registration Rights Agreement"). In the event that (i) the Company or the
Subsidiary Guarantors fail to file an Exchange Offer Registration Statement with
the SEC on or prior to the 90th day after the Issue Date, (ii) if the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 210th day after the Issue Date, (iii) if the Exchange Offer is not
consummated on or before the 30th business day after the Exchange Offer
Registration Statement is declared effective, (iv) the Company and the
Subsidiary Guarantors are obligated to file the Shelf Registration Statement and
fail to file the Shelf Registration Statement with the SEC on or prior to the
30th day after such filing obligation arises, (v) the Company and the Subsidiary
Guarantors are obligated to file a Shelf Registration Statement and the Shelf
Registration Statement is not declared effective on or prior to the 60th day
after the obligation to file a Shelf Registration Statement arises, or (vi) if
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is declared effective but thereafter ceases to be effective
or useable in connection with resales of the Notes during the periods specified
in the Registration Rights Agreement, for such time of non-effectiveness or non-
usability (each, a "Registration Default"), the Company and the Subsidiary
Guarantors agree to pay to the Holder of this Note, if affected thereby,
liquidated damages ("Liquidated Damages") in an amount equal to $0.05 per week
per $1,000 in principal amount of this Note for each week or portion thereof
that the Registration Default continues for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of the
Liquidated Damages shall increase by an additional $0.05 per week per $1,000 in
principal amount of Notes with respect to each subsequent 90 day period until
all Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.50 per week per $1,000 in principal amount of Notes. The Company
and the Subsidiary Guarantors shall not be required to pay Liquidated Damages
for more than one
A-4
<PAGE>
Registration Default at any given time. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.]./2/
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]/1/ or, if no interest has been paid, from May 17, 1999; provided that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Regular Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest and Liquidated Damages, to the
extent lawful, at a rate per annum equal to 1% per annum in excess of the rate
of interest applicable to the Notes.
(2) Method of Payment. The Company will pay interest (except defaulted
interest) on the principal amount of the Notes on each May 1 and November 1 to
the Persons who are Holders (as reflected in the Register at the close of
business on the April 15 and October 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is canceled on registration of
transfer or registration of exchange after such Regular Record Date; provided
that, with respect to the payment of principal, the Company will make payment to
the Holder that surrenders this Note to any Paying Agent on or after May 1,
2007.
The Company will pay principal, premium, if any, and interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments
(including principal, premium, if any, and interest and Liquidated Damages, if
any) in respect of the Notes represented by the Global Notes, the Holders of
which have given wire transfer instructions on or prior to the relevant record
date, shall be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Physical Notes,
the Company will make all payments of principal, premium, if any, and interest
and Liquidated Damages, if any, at the office or agency maintained by the
Company for such purposes in The City of New York or, at the Company's option,
by mailing a check to each such Holder's registered address. If a payment date
is a date other than a Business Day, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
(3) Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar upon
written notice thereto. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-registrar.
(4) Indenture; Limitations. The Company issued the Notes under an
Indenture dated as of May 17, 1999 (the "Indenture"), among the Company, the
Subsidiary
- -------------
/2/ Include only for Initial Note.
A-5
<PAGE>
Guarantors and The Bank of New York, as trustee (the "Trustee"). Capitalized
terms herein are used as defined in the Indenture unless otherwise indicated.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (the "TIA").
The Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture shall control.
The Notes are secured senior obligations of the Company. The Indenture
limits the initial aggregate principal amount of the Notes to $1,000,000,000 but
permits the issuance of Additional Notes subject to compliance with the
covenants contained in the Indenture and except as may be limited by applicable
law; provided that the aggregate principal amount of Senior Secured Notes
outstanding at any time shall not exceed $1.9 billion.
(5) Optional Redemption. The Notes may be redeemed at the option of the
Company, in whole or in part, at any time and from time to time, on or after May
1, 2004, at the following Redemption Prices (expressed in percentages of
principal amount on the relevant Redemption Date), plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date, if redeemed
during the 12-month period commencing of each of the years set forth below:
YEAR REDEMPTION PRICE
---- -----------------
2004 104.938%
2005 102.469%
2006 and thereafter 100.000%
If less than all the Notes are to be redeemed at any time, selection of Notes
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided that no
Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest and
Liquidated Damages, if any, cease to accrue on Notes or portions of them called
for redemption.
(6) Repurchase upon a Change in Control and Sale of Assets. Upon the
occurrence of (a) a Change in Control, each Holder shall have the right to
require that the Company repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the
A-6
<PAGE>
principal amount thereof on the date of purchase, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase and (b) an
Asset Sale, the Company may be obligated to make an offer to purchase on a pro
rata basis from the Holders the Notes with the Excess Proceeds of such Asset
Sales at a purchase price equal to 100% of the principal amount of such Notes
plus accrued interest and Liquidated Damages, if any, to the date of purchase.
(7) Denominations; Transfer; Exchange. The Notes are in fully registered
form without coupons, in denominations of $1,000 and any integral multiples of
$1,000. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture.
(8) Persons Deemed Owners. A Holder may be treated as the owner of a Note
for all purposes.
(9) Unclaimed Money. If money for the payment of principal, premium, if any,
or interest and Liquidated Damages, if any, remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the Company at its
written request. After that, Holders entitled to the money must look to the
Company for payment, unless an abandoned property law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
(10) Discharge Prior to Redemption or Maturity. If the Company irrevocably
deposits, or causes to be deposited, with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of and premium, if
any, and accrued interest and Liquidated Damages on the Notes (a) to redemption
or maturity, the Company will be discharged from the Indenture and the Notes,
except in certain circumstances for certain sections thereof, and (b) to
redemption or maturity, the Company will be discharged from certain covenants
set forth in the Indenture.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
Outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend the Indenture or the Notes to the extent
set forth in the Indenture.
(12) Restrictive Covenants. The Indenture contains certain covenants,
including, without limitation, covenants with respect to the following matters:
(i) Indebtedness; (ii) Restricted Payments; (iii) distributions from Restricted
Subsidiaries and Joint Ventures; (iv) sales of assets; (v) transactions with
Affiliates; (vi) Liens; (vii) No Amendments to Subordination Provisions; (viii)
repurchase of Notes upon a Change in Control; (ix) Sale and Leaseback
Transactions; (x) Subsidiary Guarantees; and (xi) consolidation, merger and sale
of assets. Within 120 days after the end of each fiscal year, the Company must
report to the Trustee on compliance with such limitations.
A-7
<PAGE>
(13) Successor Persons. When a successor person or other entity (other than a
Subsidiary of the Company) assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor person will be released from those
obligations.
(14) Remedies for Events of Default. If an Event of Default (other than an
Event of Default specified in Section 6.01(g) or (h) of the Indenture that
occurs with respect to the Company or a Subsidiary Guarantor) occurs and is
continuing under this Indenture, then in every such case the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes,
by written notice to the Company (and to the Trustee if such notice is given by
the Holders), may, and the Trustee at the written request of such Holders shall,
declare the principal of, premium, if any, and accrued interest and Liquidated
Damages, if any, on all of the Outstanding Notes to be immediately due and
payable. Upon a declaration of acceleration, such principal of, premium, if
any, and accrued interest and Liquidated Damages, if any, shall be immediately
due and payable. If an Event of Default specified in Section 6.01(g) or (h) of
the Indenture occurs with respect to the Company or a Subsidiary Guarantor, the
principal of, premium, if any, and accrued interest and Liquidated Damages, if
any, on the Outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of at least a majority in aggregate principal amount of the
Outstanding Notes by written notice to the Company and to the Trustee, may waive
all past defaults and rescind and annul a declaration of acceleration and its
consequences if (1) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (2) the recission would not conflict with any
judgment or decree of a court of competent jurisdiction.
Holders may not enforce the Indenture, the Notes or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee may require security or
indemnity satisfactory to it before it enforces the Indenture, the Notes or the
Subsidiary Guarantees. The Holders of at least a majority in aggregate principal
amount of the Notes then Outstanding may direct the Trustee in the exercise of
any trust or power in accordance with the terms of the Indenture.
(15) Security. In order to secure the Indenture Obligations, the Company and
certain of its Restricted Subsidiaries have entered into the Security Documents.
The Indenture Obligations shall be secured by Liens on the Collateral in
accordance with the terms and provisions of the Security Documents. The
Indenture requires that Holders of the Notes be granted a lien equally and
ratably with any lien granted on additional assets to secure the holders of
Existing Credit Facility Obligations subsequent to the Issue Date. Each Holder
of this Note, by accepting the same, agrees that (i) the Existing Security
Documents provide, and any Security Document that becomes effective after the
Issue Date, may provide, that the Liens created thereby or thereunder
automatically will be released and extinguished with respect to any property or
security that is transferred or otherwise disposed of in accordance with the
terms of the Existing Credit Facility, including any property or security that
is the subject of a Major Asset Sale and is transferred to a Subject Asset
Transferee; (ii) without the necessity of any consent of or notice to the
Trustee or any holder of Indenture Obligations, the Company and the Collateral
Agent may amend, modify, supplement or terminate any Security Document as
A-8
<PAGE>
long as the Company remains in compliance with the Indenture; (iii) as among the
Trustee and the holders of Indenture Obligations and the lenders under the
Existing Credit Facility and the Collateral Agent, those lenders and the
Collateral Agent will have the sole ability to control and obtain remedies with
respect to all Collateral (including on sale or liquidation of any Collateral
after acceleration of the Notes, the Existing Credit Facility Obligations or the
Existing ARCO Chemical Debt) without the necessity of any consent of or notice
to the Trustee or any such holder; (iv) any or all Liens granted under the
Security Documents for the benefit of the Holders will be automatically
released, without the necessity of any consent of the Trustee or the Holders,
upon a release of such Lien or Liens pursuant to the terms of the Security
Documents and the Existing Credit Facility or if such release is approved by the
requisite lenders under the Existing Credit Facility; (v) the relative rights of
the holders of Indenture Obligations and the holders of Indebtedness or other
obligations secured by Liens on the Collateral are governed by, and are subject
to the terms and conditions of, the Security Documents and not this Indenture;
and (vi) without the necessity of any consent of or notice to the Trustee or any
holder of Indenture Obligations, the Company may, on behalf of itself or any of
its Restricted Subsidiaries, request and instruct the Collateral Agent to, on
behalf of each secured party under the Security Documents, (A) execute and
deliver to the Company, for the benefit of any Person, such release documents as
the Company may reasonably request, of all liens and security interests held by
the Collateral Agent in such assets, and such Person shall be entitled to rely
conclusively on such release document, and (B) deliver any such assets in the
possession of the Collateral Agent to the Company. From and after the date when
all liens granted in favor of the holders of Existing Credit Facility
Obligations are released, the provisions regarding security described above will
no longer apply.
(16) Subsidiary Guarantees. Each Subsidiary Guarantor irrevocably and
unconditionally guarantees, jointly and severally, on a senior basis, the full
and punctual payment (whether at Stated Maturity, upon acceleration, optional
redemption, upon repurchase following a Change of Control Offer or an Asset Sale
Offer or otherwise) of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on, and all other amounts payable under, this Note
provided for under this Indenture, and the full and punctual payment of all
other amounts payable by the Company under the Indenture; provided that,
notwithstanding anything to the contrary herein, the aggregate amount of the
Obligations guaranteed under the Indenture by any Subsidiary Guarantor shall be
limited in amount to the maximum amount that would not render such Subsidiary
Guarantor's obligations subject to avoidance under the applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law.
(17) Additional Subsidiary Guarantees. If any of the Company's Restricted
Subsidiaries shall Guarantee or secure the payment of any other Indebtedness of
the Company or any of its Restricted Subsidiaries, then, subject to certain
exceptions specified in the Indenture, such Restricted Subsidiary shall become a
Subsidiary Guarantor by executing a supplemental indenture.
(18) Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may make loans to, accept deposits from, perform services for, and otherwise
deal with, the Company and its Affiliates as if it were not the Trustee.
A-9
<PAGE>
(19) Authentication. This Note shall not be valid until the Trustee signs the
certificate of authentication on this Note.
(20) Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A
(= Uniform Gifts to Minors Act).
(21) Governing Law. This Note shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to any
principles of conflict of laws to the extent that the application of the law of
another jurisdiction is required thereby.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to the Company, One
Houston Center, Suite 700, 1221 McKinney, Houston, Texas 77010; Attention:
General Counsel.
A-10
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No.
____________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
____________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
____________________________________________________________
attorney to transfer such Note on the books of the Company with full power
of substitution in the premises.
A-11
<PAGE>
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES BEARING A PRIVATE PLACEMENT LEGEND]
In connection with any transfer of this Note occurring prior to
______________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
Check One
(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder. [ ]
(b) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144
thereunder. [ ]
(c) this Note is being transferred to the Company. [ ]
or
(d) this Note is being transferred other than in accordance with (a), (b) or
(c) above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture. [ ]
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Sections 3.13 and 3.14 of the Indenture
shall have been satisfied.
Date:____________________
_________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
Signature Guarantee: _______________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-12
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________
______________________________________
To be executed by an executive officer
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.09 or Section 4.14 of the Indenture, check the box: [ ]
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.09 or Section 4.14 of the Indenture, state the amount (in original
principal amount) below:
$_____________________.
Date:____________
Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-14
<PAGE>
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges of a part of this Global Note for Physical Notes or a
part of another Global Note have been made:
<TABLE>
<CAPTION>
Principal amount of
this Global Note
Amount of decrease Amount of increase following such Signature of
in principal amount in principal amount decrease (or authorized officer of
Date of Exchange of this Global Note of this Global Note increase) Trustee
<S> <C> <C> <C> <C>
</TABLE>
A-15
<PAGE>
EXHIBIT B
SUPPLEMENTAL INDENTURE
dated as of __________, ____
among
LYONDELL CHEMICAL COMPANY,
as Company
[SUBSIDIARY GUARANTORS]
and
THE BANK OF NEW YORK,
as Trustee
9 7/8% Senior Secured Notes, Series B, due 2007
<PAGE>
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into as
of __________, ____, among LYONDELL CHEMICAL COMPANY., a Delaware corporation
(the "Company") [insert each Subsidiary Guarantor executing this Supplemental
Indenture and its jurisdiction of incorporation] (each an "Undersigned") and THE
BANK OF NEW YORK, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, the Subsidiary Guarantors party thereto and the Trustee
entered into the Indenture, dated as of May 17, 1999 (the "Indenture"), relating
to the Company's 9 7/8% Senior Secured Notes, Series B, due 2007 (the "Notes");
WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Company agreed, subject to certain
exceptions, pursuant to Section 4.22 of the Indenture to cause any Restricted
Subsidiary that has guaranteed or secured Indebtedness of the Company or any of
its Restricted Subsidiaries to provide Subsidiary Guarantees.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and intending to be legally bound, the parties hereto hereby agree as
follows:
Section 1. Capitalized terms used herein and not otherwise defined herein are
used as defined in the Indenture.
Section 2. Each Undersigned, by its execution of this Supplemental Indenture,
agrees to be a Subsidiary Guarantor under the Indenture and to be bound by the
terms of the Indenture applicable to Subsidiary Guarantors, including, but not
limited to, Article 13 thereof.
Section 3. This Supplemental Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York.
Section 4. This Supplemental Indenture may be signed in various counterparts
which together shall constitute one and the same instrument.
Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and said Indenture and this Supplemental Indenture shall henceforth be
read together.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto duly
authorized, as of the day and year first above written.
B-2
<PAGE>
LYONDELL CHEMICAL COMPANY
By:
Name:
Title:
[SUBSIDIARY GUARANTORS]
THE BANK OF NEW YORK,
as Trustee
By:
Name:
Title:
B-3
<PAGE>
LYONDELL CHEMICAL COMPANY,
the SUBSIDIARY GUARANTORS party hereto
and
THE BANK OF NEW YORK,
as Trustee
______________
INDENTURE
Dated as of May 17, 1999
______________
10 7/8% Senior Subordinated Notes Due 2009
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions................................................ 1
Section 1.02. Other Definitions.......................................... 28
Section 1.03. Rules of Construction...................................... 29
Section 1.04. Incorporation by Reference of TIA.......................... 30
Section 1.05. Conflict with TIA.......................................... 30
Section 1.06. Compliance Certificates and Opinions....................... 30
Section 1.07. Form of Documents Delivered to Trustee..................... 31
Section 1.08. Acts of Noteholders; Record Dates.......................... 31
Section 1.09. Notices, Etc., to Trustee and Company...................... 33
Section 1.10. Notices to Holders; Waivers................................ 34
Section 1.11. Effect of Headings and Table of Contents................... 34
Section 1.12. Successors and Assigns..................................... 34
Section 1.13. Separability Clause........................................ 35
Section 1.14. Benefits of Indenture...................................... 35
Section 1.15. Governing Law.............................................. 35
Section 1.16. Legal Holidays............................................. 35
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders............................. 35
Section 1.18. Exhibits and Schedules..................................... 35
Section 1.19. Counterparts............................................... 36
ARTICLE 2
NOTE FORMS
Section 2.01. Forms Generally............................................ 36
Section 2.02. Form of Trustee' Certificate of Authentication............. 37
Section 2.03. Restrictive Legends........................................ 37
ARTICLE 3
THE NOTES
Section 3.01. Title and Terms............................................ 39
Section 3.02. Denominations.............................................. 40
Section 3.03. Execution, Authentication and Delivery and Dating.......... 40
Section 3.04. Temporary Notes............................................ 41
Section 3.05. Registration, Registration of Transfer and Exchange........ 41
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes................ 42
Section 3.07. Payment of Interest Rights Preserved....................... 42
Section 3.08. Persons Deemed Owners...................................... 43
Section 3.09. Cancellation............................................... 44
Section 3.10. Computation of Interest.................................... 44
i
<PAGE>
Page
----
Section 3.11. Payment of Liquidated Damages.............................. 44
Section 3.12. CUSIP Numbers.............................................. 44
Section 3.13. Book-entry Provisions for Global Notes..................... 44
Section 3.14. Transfer Provisions........................................ 46
ARTICLE 4
COVENANTS
Section 4.01. Payment of Principal, Premium and Interest................. 49
Section 4.02. Maintenance of Office or Agency............................ 49
Section 4.03. Money for Payments to Be Held in Trust..................... 50
Section 4.04. SEC Reports................................................ 51
Section 4.05. Certificates to Trustee.................................... 52
Section 4.06. Limitation on Indebtedness................................. 52
Section 4.07. Limitation on Restricted Payments.......................... 56
Section 4.08. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries and Joint Ventures....... 63
Section 4.09. Limitation on Sales of Assets.............................. 66
Section 4.10. Limitation on Affiliate Transactions....................... 68
Section 4.11. Limitation on Liens........................................ 69
Section 4.12. Limitation on Senior Subordinated Indebtedness............. 69
Section 4.13. Repurchase of Notes upon a Change in Control............... 69
Section 4.14. Limitation on Sale and Leaseback Transactions.............. 70
Section 4.15. Limitation on Line of Business............................. 70
Section 4.16. Limitation on Accounts Receivable Facilities............... 71
Section 4.17. Limited Applicability of Covenants when Notes are rated
Investment-Grade........................................... 71
Section 4.18. Existence.................................................. 71
Section 4.19. Payment of Taxes and Other Claims.......................... 71
Section 4.20. Maintenance of Properties and Insurance.................... 71
Section 4.21. Limitation on Issuance of Guarantees by Restricted
Subsidiaries............................................... 72
Section 4.22. Payments for Consents...................................... 73
ARTICLE 5
CONSOLIDATION, MERGER OR SALE OF ASSETS
Section 5.01. Consolidation, Merger or Sale of Assets by the Company..... 73
Section 5.02. Successor Company Substituted.............................. 74
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor.................................................. 74
Section 5.04. Opinion of Counsel to Trustee.............................. 75
ii
<PAGE>
Page
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ARTICLE 6
REMEDIES
Section 6.01. Events of Default.......................................... 75
Section 6.02. Acceleration............................................... 77
Section 6.03. Other Remedies............................................. 77
Section 6.04. Waiver of Past Defaults.................................... 77
Section 6.05. Control by Majority........................................ 78
Section 6.06. Limitation on Suits........................................ 78
Section 6.07. Rights of Holders to Receive Payment....................... 78
Section 6.08. Collection Suit by Trustee................................. 78
Section 6.09. Trustee May File Proofs of Claim........................... 79
Section 6.10. Priorities................................................. 79
Section 6.11. Undertaking for Costs...................................... 80
Section 6.12. Restoration of Rights and Remedies......................... 80
Section 6.13. Rights and Remedies Cumulative............................. 80
Section 6.14. Waiver of Stay, Extension or Usury Laws.................... 80
ARTICLE 7
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities........................ 81
Section 7.02. Notice of Defaults......................................... 81
Section 7.03. Certain Rights of Trustees................................. 82
Section 7.04. Not Responsible for Recitals or Issuance of Notes.......... 83
Section 7.05. Trustee's Disclaimer....................................... 83
Section 7.06. May Hold Notes............................................. 83
Section 7.07. Money Held in Trust........................................ 83
Section 7.08. Compensation and Reimbursement............................. 84
Section 7.09. Conflicting Interests...................................... 84
Section 7.10. Corporate Trustee Required; Eligibility.................... 84
Section 7.11. Resignation and Removal; Appointment of Successor.......... 85
Section 7.12. Acceptance of Appointment by Successor..................... 86
Section 7.13. Merger, Conversion, Consolidation or Succession to Business 86
Section 7.14. Preferential Collection of Claims Against the Company...... 87
Section 7.15. Appointment of Authenticating Agent........................ 87
ARTICLE 8
HOLDERS' LIST AND REPORTS BY TRUSTEE AND THE COMPANY
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing............................ 87
Section 8.02. Preservation of Information; Communications to Holders..... 87
Section 8.03. Reports by Trustee......................................... 88
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Page
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ARTICLE 9
AMENDMENT, SUPPLEMENT OR WAIVER
Section 9.01. Without Consent of the Holders............................. 88
Section 9.02. With Consent of Holders.................................... 89
Section 9.03. Execution of Amendments, Supplements or Waivers............ 90
Section 9.04. Revocation and Effect of Consents.......................... 91
Section 9.05. Conformity with TIA........................................ 91
Section 9.06. Notation on or Exchange of Notes........................... 91
ARTICLE 10
REDEMPTION OF NOTES
Section 10.01. Right of Redemption....................................... 91
Section 10.02. Applicability of Article.................................. 92
Section 10.03. Election to Redeem; Notice to Trustee..................... 92
Section 10.04. Selection by Trustee of Notes to Be Redeemed.............. 92
Section 10.05. Notice of Redemption...................................... 93
Section 10.06. Deposit of Redemption Price............................... 94
Section 10.07. Notes Payable on Redemption Date.......................... 94
Section 10.08. Notes Redeemed in Part.................................... 94
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharges of Indenture.................. 95
Section 11.02. Application of Trust Money................................ 96
ARTICLE 12
DEFEASANCE AND COVENANT DEFEASANCE
Section 12.01. Option of the Company to Effect Defeasance or Covenant
Defeasance................................................ 96
Section 12.02. Legal Defeasance and Discharge............................ 96
Section 12.03. Covenant Defeasance....................................... 97
Section 12.04. Conditions to Legal or Covenant Defeasance................ 97
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions..................... 99
Section 12.06. Repayment to Company...................................... 99
Section 12.07. Reinstatement............................................. 100
ARTICLE 13
SUBSIDIARY GUARANTEES
Section 13.01. The Guarantees............................................ 100
Section 13.02. Guarantee Unconditional................................... 100
Section 13.03. Discharge; Reinstatement.................................. 101
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Section 13.04. Waiver by the Subsidiary Guarantors....................... 101
Section 13.05. Subrogation and Contribution.............................. 102
Section 13.06. Stay of Acceleration...................................... 102
Section 13.07. Subordination............................................. 102
Section 13.08. Limits of Guarantees...................................... 102
Section 13.09. Execution and Delivery of Note Guarantee.................. 102
ARTICLE 14
SUBORDINATION
Section 14.01. Agreement to Subordinate.................................. 103
Section 14.02. Liquidation; Dissolution; Bankruptcy...................... 103
Section 14.03. Default on Designated Senior Indebtedness................. 103
Section 14.04. When Distributions Must Be Paid Over...................... 104
Section 14.05. Notice.................................................... 105
Section 14.06. Subrogation............................................... 106
Section 14.07. Relative Rights........................................... 106
Section 14.08. The Company, Subsidiary Guarantors and Holders May Not
Impair Subordination...................................... 106
Section 14.09. Distribution or Notice to Representative.................. 107
Section 14.10. Rights of Trustee and Paying Agent........................ 108
Section 14.11. Authorization to Effect Subordination..................... 108
Section 14.12. Payment................................................... 108
EXHIBIT A - Form of Note
EXHIBIT B - Form of Supplemental Indenture
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INDENTURE, dated as of May 17, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Indenture"), among LYONDELL CHEMICAL COMPANY, a
Delaware corporation (as further defined below, the "Company"), the Subsidiary
Guarantors party hereto and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company and the Subsidiary Guarantors have duly authorized the
execution and delivery of this Indenture to provide for the issuance of (i)
initially, $500,000,000 aggregate principal amount of 10 7/8% Senior
Subordinated Notes due 2009 of the Company (the "Initial Notes" and, together
with any Exchange Notes issued in respect thereof, the "Original Notes") and
(ii) if and when issued, additional 10 7/8% Senior Subordinated Notes due 2009
of the Company (the "Initial Additional Notes" and, together with any Exchange
Notes issued in respect thereof, the "Additional Notes") issuable as provided in
this Indenture, in each case, guaranteed to the extent provided herein and in
the Notes by the Subsidiary Guarantors. All things necessary to make the
Original Notes, when duly issued, executed and delivered by the Company and
authenticated and delivered by the Trustee hereunder, the valid obligation of
the Company, and to make this Indenture a valid agreement of the Company and the
Subsidiary Guarantors as of the date hereof, in accordance with the terms of the
Original Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the equal and ratable benefit of
all Holders, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of the
Company (i) which is formed solely for the purpose of, and which engages in no
activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries, (ii) which is
designated by the Company as an Accounts Receivables Subsidiary pursuant to an
Officer's Certificate delivered to the Trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which (a) is at any time
recourse to or obligates the Company or any Restricted Subsidiary in any way, or
subjects any property or asset of the Company or any Restricted Subsidiary,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to (I) representations, warranties and covenants (or, any
indemnity with respect to such representations, warranties and covenants)
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable to such
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Accounts Receivable Subsidiary or (II) any guarantee of any such accounts
receivable financing by the Company or any Restricted Subsidiary that is
permitted to be incurred pursuant to Section 4.06, (iv) with which neither the
Company nor any Restricted Subsidiary of the Company has any contract,
agreement, arrangement or understanding other than contracts, agreements,
arrangements and understandings entered into in the ordinary course of business
in connection with the sale (including a sale in exchange for a promissory note
of or Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable in accordance with Section 4.16 and fees payable in the ordinary
course of business in connection with servicing accounts receivable and (v) with
respect to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation (a) to subscribe for additional shares of Capital
Stock or other Equity Interests therein or make any additional capital
contribution or similar payment or transfer thereto other than in connection
with the sale (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable to such
Accounts Receivable Subsidiary in accordance with Section 4.16 or (b) to
maintain or preserve the solvency, any balance sheet term, financial condition,
level of income or results of operations thereof.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquired Disqualified Stock" means, with respect to any specified Person,
Disqualified Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Disqualified Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquiring Person" means a Person other than a Subject Assets Transferee
which acquires (i) all or a portion of the Subject Assets or (ii) an interest in
a Subject Assets Transferee in connection with a Major Asset Sale.
"Additional Notes" means any notes issued under this Indenture in addition
to the Original Notes, including any Exchange Notes issued in exchange therefor
having the same terms in all respects (or in all respects except payment of
interest (i) scheduled and paid prior to the date of issuance of such notes or
(ii) payable on the first Interest Payment Date following such date of
issuance).
"Adjusted Consolidated Cash Flow" means, for any period, the sum of
Consolidated Cash Flow of the Company for such period plus the aggregate
Distributable
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Joint Venture Cash Flow of the Company and its Restricted Subsidiaries,
determined on a consolidated basis, for such period.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control; provided further that the foregoing proviso shall not
apply for purposes of Section 4.07(b)(vii) and 4.07(b)(ix) and clause (d) of the
definition of "Unrestricted Subsidiary".
"ARCO Chemical" means Lyondell Chemical Worldwide, Inc., a Delaware
corporation formerly named ARCO Chemical Company.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets other than the disposition of
inventory, equipment or Cash Equivalents in the ordinary course of business
consistent with past practices (provided that the sale, conveyance or other
disposition of all or substantially all the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of
Section 4.13 and/or the provisions of Section 5.01 and not by the provisions of
Section 4.09), (ii) the sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance
by any of the Company's Restricted Subsidiaries of Equity Interests of such
Restricted Subsidiary, in the case of clauses (i), (ii) or (iii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $25 million or (b) for Net Proceeds in excess of $25
million. Notwithstanding the foregoing: (a) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (b) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a
Restricted Payment that is permitted by Section 4.07; (d) an issuance of
Preferred Stock by a Finance Subsidiary that is permitted by Section 4.06; (e)
sales (including a sale in exchange for a promissory note of or Equity Interest
in such Accounts Receivable Subsidiary) of accounts receivable to an Accounts
Receivable Subsidiary in connection with any Receivables Facility permitted by
Section 4.16; and (f) Sale and Leaseback Transactions will not be deemed to be
an Asset Sale.
"Asset Sale Lien" means a Lien on the Subject Assets (including as a Lien
for this purpose contractual rights with respect to the operation of the Subject
Assets) arising in connection with a Major Asset Sale in favor of the Acquiring
Person (or an Affiliate thereof) which Lien does not secure any Indebtedness.
"Attributable Debt" in respect of a Sale and Leaseback Transaction that is
treated as a capital lease in accordance with GAAP means, at the time of
determination, the present value (discounted at the rate of interest implicit in
such transaction, determined in accordance with GAAP) of the obligation of the
lessee for net rental payments during
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the remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 7.15 to act on behalf of the Trustee to authenticate Notes of one or
more series.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board of directors.
"Board Resolution" means, with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have been
duly adopted by the board of directors (or any committee thereof) of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Trustee. Unless the context otherwise requires, "Board
Resolution" refers to a Board Resolution of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on which
commercial banks in The City of New York or Houston, Texas are authorized by law
to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (c) demand deposits, time deposits
and certificates of deposit with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year from
the date of acquisition and overnight bank deposits, in each case with any bank
or trust company organized or licensed under the laws of the United States or
any State thereof having capital, surplus and undivided profits in excess of
$500 million, (d) repurchase obligations with a term of not more than seven days
for underlying securities of the type described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications specified
in clause (c) above, (e) commercial paper rated at least P-1 or A-1 by Moody's
or S&P, respectively, and in each case maturing within six months after the date
of acquisition, (f) any fund investing exclusively in investments of the type
described in clauses (a) through (e) above and (g) in the case of a Foreign
Subsidiary, substantially similar investments denominated in foreign currencies
(including similarly capitalized foreign banks).
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"Change of Control" means the occurrence of any of the following: (i) the
sale, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all the assets of the Company and its
Subsidiaries taken as a whole to any Person or group (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a Person or
group who, prior to such transaction, held a majority of the voting power of the
voting stock of the Company, (ii) the acquisition by any Person or group (as
defined above) of a direct or indirect interest in more than 50% of the voting
power of the voting stock of the Company, by way of merger or consolidation or
otherwise, or (iii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Lyondell Chemical Company, a Delaware corporation, and any
successor in interest thereto.
"Company Request," "Company Order" and "Company Consent" mean, respectively,
a written request, order or consent signed in the name of the Company by an
Officer of the Company.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period (less the Net Income
of any Joint Venture to the extent included therein pursuant to clause (i) of
the definition of "Consolidated Net Income"), plus in each case, without
duplication
(i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period (including any provision for taxes on
the Net Income of any Joint Venture that is a pass-through entity for federal
income tax purposes, to the extent such taxes are paid or payable by such Person
or any of its Restricted Subsidiaries), to the extent that such provision for
taxes was included in computing such Consolidated Net Income,
(ii) the Fixed Charges of such Person and its Restricted Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in computing
such Consolidated Net Income,
(iii) depreciation and amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation and amortization were deducted in
computing such Consolidated Net Income and
(iv) any non-cash charges reducing Consolidated Net Income for such period
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period); minus
(v) any non-cash items increasing Consolidated Net Income for such period,
in each case, on a consolidated basis and determined in accordance with GAAP.
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Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that
(i) the Net Income of any Person that is not a Restricted Subsidiary shall
be included only to the extent of the lesser of (x) the amount of dividends or
distributions paid in cash (but not by means of a loan) to the referent Person
or a Restricted Subsidiary thereof or (y) the referent Person's (or a Restricted
Subsidiary of the referent Person's) proportionate share of the Net Income of
such other Person,
(ii) the Net Income (but not loss) of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and
(iv) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its Restricted Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of Preferred Stock (other than Disqualified Stock), less all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of tangible assets of a going concern business made in accordance with GAAP as a
result of the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person, and excluding the cumulative effect of a change in
accounting principles, all as determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election or any successor Continuing Directors appointed by such
Continuing Directors (or their successors).
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"Corporate Trust Office" means the principal office of the Trustee, at which
at any particular time its corporate trust business shall be administered, which
office on the Issue Date is located at 101 Barclays Street, Floor 21 West, New
York, New York 10286.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means (a) the Indebtedness (other than
Hedging Obligations) outstanding under the Existing Credit Facility and (b) any
other Senior Indebtedness permitted under the Indenture the principal amount of
which is $25.0 million or more and that has been designated by the Company in
writing to the Trustee as "Designated Senior Indebtedness."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date on which the Notes mature shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
contained in Section 4.09 and Section 4.13 and such Capital Stock specifically
provides that such Person will not repurchase or redeem any such stock pursuant
to such provision prior to the Company's repurchase of such Notes as are
required pursuant to such covenants.
"Distributable Joint Venture Cash Flow" means, with respect to any Person
for any period, in the case of each Joint Venture that is not a Restricted
Subsidiary of the referent Person, the sum of
(I) the lesser of
(x) the amount of dividends or distributions paid in cash (but not by
means of a loan) by such Joint Venture to the referent Person or a
Restricted Subsidiary thereof or
(y) the referent Person's (or a Restricted Subsidiary of the referent
Person's) proportionate share of
(i) the Net Income of such Joint Venture for such period, plus
(ii) to the extent deducted therefrom, depreciation and
amortization (including amortization of goodwill and other intangibles but
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excluding amortization of prepaid cash expenses that were paid in a prior
period) of such Joint Venture for such period, plus
(iii) any non-cash charges reducing Net Income of such Joint
Venture for such period (excluding any such non-cash charge to the extent
that it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period), less
(iv) any non-cash items increasing Net Income of such Joint
Venture for such period, minus
(II) the aggregate amount of all Investments made by the Company or any of
its Restricted Subsidiaries in such Joint Venture during such period pursuant to
Section 4.07(b)(viii),
in each case determined on a consolidated basis and in accordance with
GAAP.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equistar Assumed Debt" means (i) the 10.00% Notes Due 1999 issued by the
Company pursuant to the Indenture dated as of May 31, 1989 between the Company
and Texas Commerce Bank, National Association, as trustee, as supplemented by
the First Supplemental Indenture dated as of May 31, 1989 and the Second
Supplemental Indenture dated as of December 1, 1997; (ii) the 9.125% Notes Due
2002 issued by the Company pursuant to an Indenture dated as of March 10, 1992
between the Company and First Trust National Association, as trustee, as
supplemented by the First Supplemental Indenture dated as of March 10, 1992 and
the Second Supplemental Indenture dated as of December 1, 1997; (iii) the 6.5%
Notes Due 2006 and 7.55% Notes Due 2026, each issued by the Company pursuant to
an Indenture dated as of January 29, 1996 between the Company and Texas Commerce
Bank National Association, as trustee, as supplemented by the First Supplemental
Indenture dated as of February 15, 1996 and the Second Supplemental Indenture
dated as of December 1, 1997; and (iv) Indebtedness under the medium term notes
issued by the Company, maturing at various dates from 1998 to 2005; in each case
outstanding as of the Issue Date and with respect to which, as between the
Company and Equistar, Equistar is the primary obligor and the Company is an
obligor; in each case, as may be amended from time to time, provided that any
such amendment does not increase the principal amount thereof or interest rate
applicable thereto or shorten the Weighted Average Life to Maturity or Stated
Maturity thereof or add any Restricted Subsidiary as an obligor with respect
thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Company issued pursuant to
this Indenture in exchange for, and in an aggregate principal amount at maturity
equal to, the Initial Notes or any Initial Additional Notes, in compliance with
the terms of a Registration Rights Agreement and containing terms substantially
identical to the Initial
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Notes or any Initial Additional Notes (except that (i) such Exchange Notes shall
not contain terms with respect to transfer restrictions and shall be registered
under the Securities Act and (ii) certain provisions relating to Liquidated
Damages thereon shall be eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the Initial
Notes to exchange Outstanding Notes for Exchange Notes, as provided for in a
Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Existing ARCO Chemical Debt" means the 9.9% Debentures Due 2000, the 9.375%
Debentures Due 2005, the 10.25% Debentures Due 2010 and the 9.8% Debentures Due
2020, all issued by ARCO Chemical pursuant to the Indenture dated June 15, 1988
between ARCO Chemical and The Bank of New York, as Trustee.
"Existing Credit Facility" means that certain Credit Agreement dated as of
July 23, 1998 by and among the Company and Morgan Guaranty Trust Company of New
York, as administrative agent, DLJ Capital Funding, Inc., as syndication agent,
and the other lenders that are party thereto, including any related notes,
instruments, and agreements executed in connection therewith, as amended,
restated, modified, extended, renewed, refunded, replaced or refinanced, in
whole or in part, from time to time, whether or not with the same lenders or
agents.
"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries in existence, and considered Indebtedness of the Company or any of
its Restricted Subsidiaries, on the Issue Date, until such amounts are repaid,
including all reimbursement obligations with respect to letters of credit
outstanding as of the date of the Indenture.
"Finance Subsidiary" means a Restricted Subsidiary of the Company, all the
Capital Stock of which (other than Preferred Stock) is owned by the Company that
does not engage in any activity other than: (i) holding of Indebtedness of the
Company; (ii) the issuance of Capital Stock; and (iii) any activity necessary,
incidental or related to the foregoing.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Adjusted Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes or redeems any
Indebtedness (other than revolving credit borrowings) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
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In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period, (ii) the Adjusted Consolidated Cash Flow and Fixed Charges attributable
to operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but, in the case of such Fixed Charges, only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date and (iii) if since the beginning of the four-quarter reference period any
Person was designated as an Unrestricted Subsidiary or redesignated as or
otherwise became a Restricted Subsidiary, such event shall be deemed to have
occurred on the first day of the four-quarter reference period.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers' acceptance financings and net payments or receipts (if
any) pursuant to Hedging Obligations) and
(ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period and
(iii) any interest expense on Indebtedness of another Person (other than
Non-Recourse Debt of a Joint Venture or Unrestricted Subsidiary secured by a
pledge by the Company or any Restricted Subsidiary of Capital Stock which pledge
is permitted by Section 4.07(b)(xi) or Section 4.07(b)(xii)) that is Guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not such
Guarantee or Lien is called upon) and
(iv) the product of (a) all dividend payments (other than any payments to
the referent Person or any of its Restricted Subsidiaries) on any series of
Preferred Stock of such Person and its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP;
provided that (i) interest payments by Equistar on the Equistar Assumed Debt and
(ii) interest payments on Indebtedness of a Joint Venture shall, in each case,
not be deemed Fixed Charges of the Company as of any date of determination when
such Indebtedness is not considered Indebtedness of the Company or any
Restricted Subsidiary of the Company.
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"Foreign Subsidiary" means any Restricted Subsidiary that has 50% or more of
its assets located outside the United States or any territory thereof.
"GAAP" means generally accepted accounting principles 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 have been approved by a significant segment of the accounting
profession, as in effect on the Issue Date.
"General Partner" means a Restricted Subsidiary of the Company or any of its
Restricted Subsidiaries that has no assets and conducts no operations other than
its ownership of a general partnership interest in a Joint Venture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or Disqualified Stock 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 Disqualified Stock of such other Person (including those arising
by virtue of partnership arrangements (other than, in the case of the Company or
a Restricted Subsidiary of the Company, with respect to the obligations of a
Joint Venture, solely by virtue of a Restricted Subsidiary of the Company being
the General Partner of such Joint Venture if, as of the date of determination,
no payment on such Indebtedness or obligation has been made by such General
Partner of such Joint Venture and such arrangement would not be classified and
accounted for, in accordance with GAAP, as a liability on a consolidated balance
sheet of the Company)) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or Disqualified Stock of the
payment thereof or to protect such obligee against loss in respect thereof in
whole or in part (including by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, to maintain financial statement
conditions or otherwise); 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.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) forward foreign exchange
contracts or currency swap agreements, (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values and (iv) agreements designed to protect such Person against
fluctuations in raw material prices.
"Holder" or "Noteholders" means the Person in whose name a Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing net
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Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability on a
balance sheet of such Person prepared in accordance with GAAP, as well as 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, for purposes of
determining the amount of any Indebtedness of the type described in this clause,
if recourse with respect to such Indebtedness is limited to such asset, the
amount of such Indebtedness shall be limited to the lesser of the fair market
value of such asset or the amount of such Indebtedness) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of the
types described above of any other Person; provided that Indebtedness shall not
include the pledge by the Company or any of its Restricted Subsidiaries of the
Capital Stock of a Joint Venture Subsidiary, Unrestricted Subsidiary or Joint
Venture permitted by Section 4.07(b)(xi) or Section 4.07(b)(xii) to secure Non-
Recourse Debt of such Unrestricted Subsidiary or Joint Venture.
The Equistar Assumed Debt shall not constitute Indebtedness of the Company
as of any date of determination if the Company has not made any principal or
interest payments on such Indebtedness after the Issue Date; provided that, the
payment by the Company of any principal or interest thereon shall be deemed to
be an incurrence of such Indebtedness on the day of such payment. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Initial Additional Notes" means Additional Notes issued in an offering not
registered under the Securities Act.
"Initial Notes" means the Company's 10 7/8% Senior Subordinated Notes Due
2009, issued on the Issue Date (and any Notes issued in respect thereof pursuant
to Section 3.04, 3.05, 3.06, 3.13, 3.14 or 10.08), but not including any
Exchange Notes issued in exchange therefor.
"Interest Payment Date" means, when used with respect to any Note and any
installment of interest thereon, the date specified in such Note as the fixed
date on which such installment of interest is due and payable, as set forth in
such Note.
"Investment Grade" means a rating of BBB- or higher by S&P or Baa3 or higher
by Moody's or the equivalent of such ratings by S&P or Moody's. In the event
that the Company shall select any other Rating Agency pursuant to the provisions
of the definition thereof, the equivalent of such ratings by such Rating Agency
shall be used.
"Investments" means, with respect to any Person, all investments by such
Person in another Person (including an Affiliate of such Person) in the form of
direct or indirect loans, advances or extensions of credit to such other Person
(including any Guarantee by such Person of the Indebtedness or Disqualified
Stock of such other Person) or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of such other Person, together with all items that are or would
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be classified as investments of such investing Person on a balance sheet
prepared in accordance with GAAP; provided that (x) trade credit and accounts
receivable in the ordinary course of business, (y) commissions, loans, advances,
fees and compensation paid in the ordinary course of business to officers,
directors and employees and (z) reimbursement obligations in respect of letters
of credit and tender, bid, performance, government contract, surety and appeal
bonds, in each case solely with respect to obligations of the Company or any of
its Restricted Subsidiaries shall not be considered Investments. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in Section 4.07(a).
"Issue Date" means the date on which the Notes are originally issued.
"Joint Venture" means any joint venture between the Company or any
Restricted Subsidiary and any other Person, whether or not such joint venture is
a Subsidiary of the Company or any Restricted Subsidiary.
"Joint Venture Subsidiary" means a Subsidiary of the Company or any of its
Subsidiaries that has no assets and conducts no operations other than its
ownership of Equity Interests of a Joint Venture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest (other than, in the case of Receivables Facilities, security
interests under the Uniform Commercial Code arising solely by virtue of the
application of Article 9 thereof to sales of accounts) or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, and any lease in the nature thereof) or the assignment or
conveyance of any right to receive income therefrom.
"Liquidated Damages" means liquidated damages owed to the Holders pursuant
to a Registration Rights Agreement.
"Lyondell TDI" means Lyondell Chimie France TDI, a French limited
partnership and a wholly-owned Subsidiary of the Company.
"Major Asset Sale" means an Asset Sale designated by the Company by prior
notice to the Trustees as a Major Asset Sale, so long as in connection therewith
(i) the Company receives Net Proceeds in an aggregate amount not less than
$1,000,000,000 (which shall be deemed Net Proceeds of such Major Asset Sale for
purposes of Section 4.09),
(ii) at the time of such Major Asset Sale and after giving effect thereto,
no Default shall exist,
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(iii) the sum of the gross cash proceeds received by the Company in respect
of such Major Asset Sale plus the value of the interest of the Company in the
Subject Assets Transferee (if any) after giving effect to such Major Asset Sale
is not less than the value (as conclusively determined by the Board of Directors
of the Company) of the portion of the Subject Assets transferred by the Company
in connection with such Major Asset Sale, and
(iv) the Company directly or indirectly is the operator of the Subject
Assets in which it or a Subject Assets Transferee retains an interest.
For purposes of clause (i) of this definition (1) a transaction which
produces substantially the same economic result as a sale of a partial interest
in an asset, as might be achieved, for instance, through contractual
arrangements allocating future revenues and costs attributable to the asset,
shall be deemed an Asset Sale even though there may be no change in title to the
asset or in the ownership of the Person which has title to the asset and (2) a
subsequent related transaction with the same Acquiring Person (or an Affiliate
thereof) contemplated by the terms of the initial Major Asset Sale with such
Person shall, for purposes of determining the applicability of and compliance
with this definition, be deemed a single cumulative transaction.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale or any disposition pursuant to a Sale and
Leaseback Transaction or (b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
gain or loss, together with any related provision for taxes on such
extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds (excluding any proceeds
deemed to be "cash" pursuant to Section 4.09) received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be paid to holders of minority interests in
Restricted Subsidiaries as a result of such Asset Sale, amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under the
Existing Credit Facility or Existing ARCO Chemical Debt) secured by a Lien on
any asset sold in such Asset Sale and any reserves for adjustment in respect of
the sale price of such asset or assets established in accordance with GAAP and
any reserve for future liabilities established in accordance with GAAP; provided
that the reversal of any such reserve that reduced Net Proceeds when issued
shall be deemed a receipt of Net Proceeds in the amount of such proceeds on such
day.
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"Non-Recourse Debt" means Indebtedness as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
(in each case, other than the stock of a Joint Venture or Unrestricted
Subsidiary or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture pledged by the Company or any of its Restricted
Subsidiaries to secure debt of such Joint Venture or Unrestricted Subsidiary) of
the Company or any of its Restricted Subsidiaries.
"Notes" means the Initial Notes, any Additional Notes and the Exchange
Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Officer" means, with respect to the Company, any Subsidiary Guarantor or
any other obligor on the Notes, the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Financial Officer, the Secretary, the
Treasurer, any Assistant Secretary or Assistant Treasurer or any Vice President
of such Person.
"Officer's Certificate" means, with respect to the Company or any other
obligor on the Notes, a certificate signed by an Officer of such Person.
"Opinion of Counsel" means a written opinion from legal counsel. The counsel
may be an employee of or counsel to the Company or the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.
"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes, provided that, if
such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor reasonably
satisfactory to the Trustee has been made;
(iii) Notes paid pursuant to Section 3.06; and
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(iv) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because the Company or any
Affiliate of the Company holds the Note, provided that in determining whether
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be Outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the reasonable satisfaction of the
Trustee the pledgee's right to act with respect to such Notes and that the
pledgee is not the Company or an Affiliate of such Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Notes on behalf of the Company.
"Payment Default" means any failure to pay any scheduled installment of
interest or principal on any Indebtedness within the grace period provided for
such payment in the documentation governing such Indebtedness.
"PBGC Settlement" means the settlement agreement between the Company and the
Pension Benefit Guaranty Corporation (or any successor entity) as amended,
modified, restated or replaced from time to time.
"Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.
"Permitted Investments" means:
(a) any Investment in the Company or in a Restricted Subsidiary of the
Company that is engaged in a Permitted Business;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Subsidiary of the Company in a
Person, if as a result of such Investment: (i) such Person becomes a Restricted
Subsidiary of the Company engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company engaged in a Permitted Business;
(d) any non-cash consideration (other than a joint venture interest
received in full or partial satisfaction of the 80% requirement in clause (ii)
of Section 4.09(a)) received as
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consideration in an Asset Sale that was made pursuant to and in compliance with
Section 4.09;
(e) any acquisition of assets or Equity Interests solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) Hedging Obligations entered into in the ordinary course of business and
otherwise permitted under the Indenture;
(g) Investments in an Accounts Receivable Subsidiary that, as conclusively
determined by the Board of Directors, are necessary or advisable to effect a
Receivables Facility;
(h) Investments in Unrestricted Subsidiaries and Joint Ventures in an
aggregate amount, taken together with all other Investments made in reliance on
this clause (h), not to exceed at any time outstanding $25 million (after giving
effect to any reductions in the amount of any such Investments as a result of
the repayment or other disposition thereof for cash, the amount of such
reduction not to exceed the amount of such Investments previously made pursuant
to this clause (h)); and
(i) any Investment received by the Company or any Restricted Subsidiary as
consideration for the settlement of any litigation, arbitration or claim in
bankruptcy or in partial or full satisfaction of accounts receivable owned by a
financially troubled Person to the extent reasonably necessary in order to
prevent or limit any loss by the Company or any of its Restricted Subsidiaries
in connection with such accounts receivable.
"Permitted Junior Securities" means Equity Interests in the Company or debt
securities of the Company that are subordinated to all Senior Indebtedness (and
any debt securities issued in exchange for Senior Indebtedness) to substantially
the same extent as, or to a greater extent than, the Notes are subordinated to
Senior Indebtedness.
"Permitted Liens" means:
(i) Liens in favor of the Company or any Subsidiary Guarantor;
(ii) Liens securing the Senior Secured Notes and the Subsidiary Guarantees;
(iii) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or any Restricted Subsidiary of the
Company or becomes a Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger, consolidation or
acquisition and do not extend to any assets of the Company or its Restricted
Subsidiaries other than those of the Person merged into or consolidated with the
Company or that becomes a Restricted Subsidiary of the Company;
(iv) Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such acquisition;
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(v) Liens (including the interest of a lessor under a capital lease) on any
asset existing at the time of acquisition thereof or incurred within 180 days of
the time of acquisition or completion of construction thereof, whichever is
later, to secure or provide for the payment of all or any part of the purchase
price (or construction price) thereof;
(vi) Liens incurred or assumed in connection with the issuance of revenue
bonds the interest on which is exempt from federal income taxation pursuant to
Section 103(b) of the Internal Revenue Code;
(vii) Liens imposed by law, such as laborers' or other employees',
carriers', warehousemens', mechanics', materialmen's and vendors' Liens and
Liens imposed by law on pipelines or pipeline facilities;
(viii) Liens arising by reason of deposits necessary to qualify the Company
or any Restricted Subsidiary to conduct business, maintain self insurance or
comply with any law and Liens securing the PBGC Settlement;
(ix) Liens to secure the performance of statutory obligations, tender, bid,
performance, government contract, surety or appeal bonds or other obligations of
a like nature incurred in the ordinary course of business;
(x) Liens existing on the Issue Date other than Liens securing Indebtedness
under the Existing Credit Facility or the Existing ARCO Chemical Debt;
(xi) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings, prejudgment Liens that are being contested in good faith by
appropriate proceedings and Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary at the time shall be prosecuting an appeal or proceedings
for review and with respect to which it shall have secured a stay of execution
pending such appeal or proceedings for review; provided that in each case any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(xii) easements, rights-of-ways, restrictions, irregularities of title and
other similar charges or encumbrances, not interfering in any material respect
with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
(xiii) Liens securing reimbursement obligations with respect to commercial
letters of credit obtained in the ordinary course of business which encumber
documents and other property or assets relating to such letters of credit and
products and proceeds thereof;
(xiv) Liens securing assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets;
(xv) licenses or leases by the Company or any of its Restricted
Subsidiaries as licensor or lessor in the ordinary course of business and
otherwise permitted by the Indenture for patents, copyrights, trademarks,
tradenames and other intellectual property;
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(xvi) leases or subleases by the Company or any of its Restricted
Subsidiaries as lessor or sublessor in the ordinary course of business and
otherwise permitted by the Indenture;
(xvii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xviii) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the
Company or any of its Restricted Subsidiaries (which defeasance is otherwise
permitted under the Indenture) having an aggregate principal amount at any one
time outstanding not to exceed $25 million or (B) defeasing Indebtedness ranking
pari passu with the Notes; provided that the Notes are defeased concurrently
with such Indebtedness;
(xix) from and after the first date when the Notes are rated Investment
Grade, Liens on any asset of the Company other than any of the Company's or any
of its Restricted Subsidiary's manufacturing plants or Liens on any Equity
Interests of any Restricted Subsidiary that owns a manufacturing plant;
(xx) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture (or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture) organized (or designated as an Unrestricted Subsidiary
and holding no other assets and conducting no other operations) to construct,
own and/or operate a propylene oxide plant in the European Union to secure Non-
Recourse Debt of such Joint Venture or Unrestricted Subsidiary;
(xxi) the pledge of Equity Interests of an Unrestricted Subsidiary or Joint
Venture (or of a Joint Venture Subsidiary that has no assets and conducts no
operations other than the holding, directly or indirectly, of Equity Interests
of such Joint Venture) organized (or designated as an Unrestricted Subsidiary
and holding no other assets and conducting no other operations) to participate
in the improvement of the Rhodia TDI Plant to secure Non-Recourse Debt of such
Joint Venture or Unrestricted Subsidiary or Rhodia or a wholly-owned subsidiary
of Rhodia;
(xxii) Liens on equipment of the Company or any Restricted Subsidiary
arising as a result of a sale and leaseback with respect to such equipment;
provided that the proceeds from such sale and leaseback are applied pursuant to
Section 4.09;
(xxiii) Asset Sale Liens;
(xxiv) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar agreement
establishing a trust or escrow arrangement, and Liens pursuant to merger
agreements, stock purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of property or assets of
the Company or any Restricted Subsidiary, to the extent such dispositions are
permitted hereunder;
(xxv) netting provisions and setoff rights in favor of counterparties to
agreements creating Hedging Obligations;
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(xxvi) other Liens on assets of the Company or any Restricted Subsidiary of
the Company securing Indebtedness that is permitted by the terms of the
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $100 million; and
(xxvii) Liens to secure a Permitted Refinancing incurred to refinance
Indebtedness that was secured by a Lien permitted under the Indenture and that
was incurred in accordance with the provisions of the Indenture; provided that
such Liens do not extend to or cover any property or assets of the Company or
any Restricted Subsidiary other than assets or property securing the
Indebtedness so refinanced.
"Permitted Refinancing" means any Indebtedness of the Company or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided that:
(i) the principal amount (or liquidation preference in the case of
Preferred Stock) of such Permitted Refinancing (or if such Permitted Refinancing
is issued at a discount, the initial issuance price of such Permitted
Refinancing) does not exceed the principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of any premiums paid and reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing or, in the case of Preferred Stock of a
Finance Subsidiary, the Indebtedness issued to such Finance Subsidiary, has a
Stated Maturity date later than the Stated Maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated by its terms in right of payment to the
Notes or the Subsidiary Guarantees, such Permitted Refinancing, or, in the case
of Preferred Stock, the Indebtedness issued to such Finance Subsidiary, has a
Stated Maturity date later than the Stated Maturity date of, and is subordinated
in right of payment to, the Notes on subordination terms at least as favorable
to the Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(iv) such Indebtedness is incurred by the Company or a Subsidiary Guarantor
(or such Preferred Stock is issued by a Finance Subsidiary) if the Company or a
Subsidiary Guarantor is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(v) such Indebtedness is incurred by the Company or a Restricted Subsidiary
(or such Preferred Stock is issued by a Finance Subsidiary) if a Restricted
Subsidiary that is not a Subsidiary Guarantor is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
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"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Place of Payment" means a city or any political subdivision thereof
referred to in Article 3 and initially designated under Section 4.02.
"Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference stock of such Person which is
outstanding or issued on or after the date of the Indenture.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Public Equity Offering" means an underwritten primary public offering of
common stock (other than Disqualified Stock) of the Company that is registered
pursuant to the Securities Act, other than issuances registered on Form S-4 or
Form S-8 or any issuances of common stock pursuant to employee benefit plans of
the Company or any of its Subsidiaries or Affiliates or otherwise as
compensation to employees of the Company or any of its Subsidiaries or
Affiliates.
"QIB", or "Qualified Institutional Buyer" means a "qualified institutional
buyer," as the term is defined in Rule 144A under the Securities Act.
"Qualified Equity Interests" shall mean all Equity Interests of a Person
other than Disqualified Stock of such Person.
"Rating Agency" means (i) S&P or (ii) Moody's or (iii) if neither S&P nor
Moody's shall exist, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which shall be
substituted for S&P or Moody's or both, as the case may be.
"Receivables Facility" means one or more receivables financing facilities or
arrangements, as amended from time to time, pursuant to which the Company or any
of its Restricted Subsidiaries sells (including a sale in exchange for a
promissory note of or Equity Interest in an Accounts Receivable Subsidiary) its
accounts receivable to an Accounts Receivable Subsidiary.
"Receivables Fees" means distributions or payments made directly or by means
of discounts with respect to any participation interests issued or sold in
connection with,
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and other fees paid to a Person that is not the Company or a Restricted
Subsidiary in connection with, any Receivables Facility.
"Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed or such redemption or purchase by or pursuant to
this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be redeemed or
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.
"Registration Rights Agreement" means (i) the Registration Rights Agreement
dated as of May 17, 1999 among the Company, the Subsidiary Guarantors party
thereto and Donaldson, Lufkin & Jenrette Securities Corporation, J.P. Morgan
Securities Inc., Salomon Smith Barney Inc., Chase Securities Inc. and
NationsBanc Montgomery Securities LLC, as Initial Purchasers, as such agreement
may be amended from time to time, and (ii) with respect to any Initial
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended from time to
time, relating to rights given by the Company to the purchasers of Initial
Additional Notes to register or exchange such Initial Additional Notes under the
Securities Act.
"Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the date specified for that purpose in Section 3.01.
"Representative" means any trustee, agent or representative (if any) for
holders of any issue of Senior Indebtedness of the Company or any Subsidiary
Guarantor.
"Resale Restriction Termination Date" means, with respect to any Note, the
date that is two years (or such other period as may hereafter be provided under
Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original issue date in respect of such Note
and the last date on which the Company or any Affiliate of the Company was the
owner of such Note (or any Predecessor Note thereto).
"Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
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"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, references to a "Restricted Subsidiary" refer to a Restricted
Subsidiary of the Company.
"Rhodia" means Rhodia S.A., a French company and the successor in interest
to Rhone-Poulenc Chemie S.A. under the TDI Agreements.
"Rhodia TDI Plant" means the manufacturing facilities for the production of
toluene diisocyanate, currently owned by Rhodia and located at Pont-de-Claix,
France.
"Sale and Leaseback Transaction" means, with respect to any Person, any
arrangement with a lender or investor providing for the leasing by such Person
of any property or asset of such Person which has been or is being sold or
transferred by such Person to such lender or investor if such arrangement is
accounted for as a capitalized lease by such Person under GAAP.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, with respect to any Person, (a) all Obligations
of such Person outstanding under the Existing Credit Facility and all Hedging
Obligations payable to a lender or an Affiliate thereof or to a Person that was
a lender or an Affiliate thereof at the time the contract was entered into under
the Existing Credit Facility, including, without limitation, interest accruing
subsequent to the filing of, or which would have accrued but for the filing of,
a petition for bankruptcy, whether or not such interest is an allowable claim in
such bankruptcy proceeding, (b) any other Indebtedness, unless the instrument
under which such Indebtedness is incurred expressly provides that it is
subordinated in right of payment to any other Senior Indebtedness of such
Person, and (c) all Obligations with respect to the foregoing. Notwithstanding
anything to the contrary in the foregoing, Senior Indebtedness will not include
(i) any liability for federal, state, local or other taxes, (ii) any
Indebtedness of such Person to any of its Subsidiaries or other Affiliates,
(iii) any trade payables, (iv) 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 or (v) any Indebtedness that is incurred in
violation of the Indenture.
"Senior Secured Notes" means the Company's 9 5/8% Senior Secured Notes,
Series A, due 2007 and the Company's 9 7/8% Senior Secured Notes, Series B, due
2007.
"Senior Secured Notes Indentures" means the indentures relating to the
Company's Senior Secured Notes as in effect on the Issue Date.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
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"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the Issue
Date.
"Specified Joint Ventures" means (i) Equistar Chemicals, LP, (ii) LYONDELL-
CITGO Refining LP and (iii) Lyondell Methanol Company, L.P.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subject Assets" means, with respect to any Major Asset Sale, the assets
which are the subject of such Major Asset Sale.
"Subject Assets Transferee" means any Restricted Subsidiary or Joint Venture
which becomes the owner of Subject Assets in connection with a Major Asset Sale.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof), or (c) that is a
Specified Joint Venture and as to which (i) a general partner of which is such
Person or a Subsidiary of such Person, (ii) such Person owns, directly or
indirectly, 50% or more of the partnership interests of such Specified Joint
Venture and (iii) the Board of Directors of such Person has designated such
Specified Joint Venture to be a "Subsidiary" (which designation shall be
irrevocable for so long as such Specified Joint Venture satisfies the foregoing
requirements). As of the Issue Date, none of the Specified Joint Ventures are
Subsidiaries of the Company. Unless the context otherwise requires, references
to a "Subsidiary" refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company' obligations with respect to the Notes.
"Subsidiary Guarantor" means (i) Lyondell Chemical Worldwide, Inc. and
Lyondell Chemical Nederland, Ltd. and (ii) each Restricted Subsidiary that
executes a
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supplemental indenture, in the form of Exhibit B hereto, providing for the
Guarantee of the payment of the Notes, in each case until such time as such
Subsidiary is released from its Subsidiary Guarantee as permitted by this
Indenture.
"Subordinated Note Obligations" means all Obligations with respect to the
Notes, including, without limitation, principal, premium of, if any, and
interest and Liquidated Damages, if any, payable pursuant to the terms of the
Notes (including upon the acceleration or redemption thereof), together with and
including any amounts received or receivable upon the exercise of rights of
recission or other rights of action (including claims for damages) or otherwise.
"TDI Agreements" means (i) the Share Purchase Agreement dated as of January
23, 1995 between ARCO Chemical Europe Inc. and Rhone-Poulenc Chemie S.A., as
such agreement may be amended, supplemented or otherwise modified from time to
time, (ii) the Processing Agreement dated as of January 23, 1995 between ARCO
Chemical Chemie TDI and Rhone-Poulenc Chemie S.A., as such agreement may be
amended, supplemented or otherwise modified from time to time, and (iii) the TDI
License.
"TDI Assets" means (i) all rights of ARCO Chemical Europe Inc., ARCO
Chemical Chemie TDI, ARCO Chemical Technology LP and their respective successors
under the TDI Agreements and (ii) all of Lyondell TDI's customer lists relating
to the Rhodia TDI Plant.
"TDI License" means the TDI Technology Agreement dated as of January 23,
1995 between ARCO Chemical Technology LP and Rhone-Poulenc Chemie S.A., as such
agreement may be amended, supplemented or otherwise modified from time to time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections 77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.05.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The Board
of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interest or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided that
(a) any Guarantee (other than as a co-obligor of the Equistar Assumed Debt
so long as the Equistar Assumed Debt is not considered Indebtedness of the
Company pursuant to the definition thereof) by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of
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such Indebtedness and an "Investment" by the Company or such Restricted
Subsidiary (or both, if applicable) at the time of such designation,
(b) either (i) the Subsidiary to be so designated has total assets of
$1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.07,
(c) if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under Section 4.06
and Section 4.07 and
(d) in the case of any Subsidiary that is a Joint Venture as of the date of
its designation as an Unrestricted Subsidiary, such Subsidiary has an aggregate
of 15% or more of its outstanding Capital Stock or other voting interests (other
than directors' qualifying shares) held by another Person other than the Company
or any Restricted Subsidiary or any Affiliate of the Company. Any such
designation by the Board of Directors of the Company pursuant to clause (i)
above shall be evidenced to the Trustee by filing with the Trustee a certified
copy of the Board Resolution giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.06 and Section 4.07.
If (i) at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements of clause (d) (because the Company has acquired more than
85% of the outstanding Capital Stock or other voting interests of any Subsidiary
that was a Joint Venture on the date of its designation as an Unrestricted
Subsidiary), or (ii) at any time the Company or any Restricted Subsidiary
Guarantees any Indebtedness of such Unrestricted Subsidiary or makes any other
Investment in such Unrestricted Subsidiary and such incurrence of Indebtedness
or Investment would not be permitted under Section 4.06 and Section 4.07 it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.06,
the Company shall be in default of such covenant). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.06 and (ii) no
Default or Event of Default would be in existence following such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in
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respect thereof, by (b) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Equity Interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
Section 1.02. Other Definitions.
TERM DEFINED
IN SECTION
Acceleration Notice 6.02
Act 1.08
Affiliate Transaction 4.10
Agent Members 3.13
Asset Sale Offer 4.09
Authentication Order 3.03
Change of Control Offer 4.13
Change of Control Payment 4.13
Change of Control Payment Date 4.13
Covenant Defeasance 12.03
Defaulted Interest 3.07
DTC 2.03
Event of Default 6.01
Excess Proceeds 4.09
Expiration Date 1.08
Global Notes 2.01
Guaranteed Indebtedness 4.12
incur 4.06
Legal Defeasance 12.02
Payment Blockage Notice 14.03
Physical Notes 2.01
Place of Payment 3.01
Plan Participants 4.07
Private Placement Legend 2.03
Redemption Amount 10.01
redemption date 13.01
Regular Record Date 3.01
Restricted Payment 4.07
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TERM DEFINED
IN SECTION
Successor Company 5.01
Subordinated Debt 4.07
U.S. Global Notes 2.01
U.S. Physical Notes 2.01
Section 1.03. Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Indenture have the meanings assigned to them
in this Indenture;
(b) "or" is not exclusive;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP and, unless expressly provided
otherwise, all determinations and computations made pursuant to any provision
hereof shall be made in accordance with GAAP; provided that references to any
Person and its Restricted Subsidiaries on a consolidated basis, and any
calculations of amounts with respect to any Person and its Restricted
Subsidiaries on a consolidated basis, shall refer to such Person and all its
Restricted Subsidiaries, whether or not such Restricted Subsidiaries would be
accounted for as consolidated subsidiaries on such Person's financial statements
prepared in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful currency
of the United States of America;
(f) the words "include," "included" and "including" as used herein shall
be deemed in each case to be followed by the phrase "without limitation," if not
expressly followed by such phrase or the phrase "but not limited to";
(g) words in the singular include the plural, and words in the plural
include the singular; and
(h) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Section 1.04. Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any
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TIA reference to another statute or defined by SEC rule under the TIA, have the
meanings so assigned to them therein. The following TIA terms have the following
meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or Noteholders.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any Subsidiary
Guarantor and any other obligor on the indenture securities.
Section 1.05. Conflict with TIA. If any provision hereof limits, qualifies
or conflicts with a provision of the TIA that is required under the TIA to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed (a) to
apply to this Indenture as so modified or (b) to be excluded, as the case may
be.
Section 1.06. Compliance Certificates and Opinions. Upon any application
or request by the Company or by any other obligor upon the Notes to the Trustee
to take any action under any provision of this Indenture, the Company or such
other obligor upon the Notes, as the case may be, shall furnish to the Trustee
such certificates and opinions as may be required under the TIA. Each such
certificate or opinion shall be given in the form of one or more Officer's
Certificates, if to be given by an Officer, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the TIA and any
other requirements set forth in this Indenture. Notwithstanding the foregoing,
in the case of any such request or application as to which the furnishing of any
Officer's Certificate or Opinion of Counsel is specifically required by any
provision of this Indenture relating to such particular request or application,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 4.05) shall include:
(a) a statement that the individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of such individual, he or she 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
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(d) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
Section 1.07. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers to the effect that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.08. Acts of Noteholders; Record Dates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee, the Company and any other obligor upon the
Notes, if made in the manner provided in this Section 1.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner that the Trustee deems sufficient.
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(c) The ownership of Notes shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind the Holder of every Note
issued upon the transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee, the Company or
any other obligor on the Notes in reliance thereon, whether or not notation of
such action is made upon such Note.
(e) (i) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in Section
1.08(e)(ii). If any record date is set pursuant to this paragraph, the Holders
of Outstanding Notes on such record date (or their duly designated proxies), and
no other Holders, shall be entitled to take the relevant action, whether or not
such Persons remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Notes on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Notes on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder in the manner set forth in Section 1.10.
(ii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to join in the giving or
making of (w) any Notice of Default, (x) any declaration of acceleration
referred to in Section 6.02, (y) any request to institute proceedings referred
to in Section 6.06(b) or (z) any direction referred to in Section 6.05, in each
case with respect to Notes. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Notes on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Notes on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Notes on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the expense of the Company, shall cause notice of such record date,
the proposed action by Holders and the applicable
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Expiration Date to be given to the Company in writing and to each Holder in the
manner set forth in Section 1.10.
(iii) With respect to any record date set pursuant to this Section
1.08, the party hereto that sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Company or the
Trustee, whichever such party is not setting a record date pursuant to this
Section 1.08(e) in writing, and to each Holder in the manner set forth in
Section 1.10, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(iv) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Note may do so with
regard to all or any part of the principal amount of such Note or by one or more
duly appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
Section 1.09. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company or any other obligor upon
the Notes shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at the Corporate Trust
Office (telephone: (212) 815-6286; facsimile: (212) 815-5915), or at any other
address furnished in writing to the Company by the Trustee, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder if in writing and delivered in person or mailed, first-
class postage prepaid, to the Company at One Houston Center, Suite 700, 1221
McKinney, Houston, Texas 77010, Attention: General Counsel (facsimile: (713)
309-2143), with copies to Baker & Botts LLP at 910 Louisiana, Houston, Texas
77002, Attention: Steve Massad, Esq. (facsimile: (713) 229-1522), or at any
other address previously furnished in writing to the Trustee by the Company.
Section 1.10. Notices to Holders; Waivers. Where this Indenture provides
for notice to Holders of any event, such notice shall be deemed to have been
given upon the mailing by first class mail, postage prepaid, of such notices to
Holders at their registered addresses as recorded in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed herein
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
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Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.
Section 1.11. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.12. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its respective successors and assigns,
whether so expressed or not.
Section 1.13. Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.14. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.15. Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. TO THE EXTENT PERMITTED BY LAW, THE TRUSTEE, THE COMPANY,
THE SUBSIDIARY GUARANTORS, ANY OTHER OBLIGORS IN RESPECT OF THE NOTES AND (BY
THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE OR THE NOTES.
Section 1.16. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest and Liquidated Damages, if any, or principal and premium (if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and
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effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity.
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders. No director, officer, employee, incorporator,
shareholder or other holder of Equity Interests of the Company or the Subsidiary
Guarantors, as such, shall have any liability for any obligations of the Company
or the Subsidiary Guarantors under the Notes, the Subsidiary Guarantees, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
Section 1.18. Exhibits and Schedules. All exhibits and schedules attached
hereto are by this reference made a part hereof with the same effect as if
herein set forth in full.
Section 1.19. 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.
ARTICLE 2
NOTE FORMS
Section 2.01. Forms Generally. The Notes and the Trustee's certificate of
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in Exhibit A annexed hereto and in this Article 2. The Notes may
have such appropriate insertions, omissions, substitutions, notations, legends,
endorsements, identifications and other variations as are required or permitted
by law, stock exchange rule or depository rule or usage, agreements to which the
Company is subject, if any, the certificate of incorporation, bylaws or other
similar governing instruments of the Company, or other customary usage, or as
may consistently herewith be determined by the Officers of the Company executing
such Notes, as evidenced by such execution (provided always that any such
notation, legend, endorsement, identification or variation is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication.
Initial Notes and any Additional Notes offered and sold in reliance on Rule
144A under the Securities Act shall be issued initially in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A and
shall contain the legends set forth in Section 2.03(a) and (b) (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as provided in Sections 3.13 and
3.14.
Initial Notes and any Additional Notes issued pursuant to Section 3.05 and
Section 3.13 in exchange for or upon transfer of beneficial interests in the
U.S. Global
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Note shall be in the form of permanent certificated Notes in substantially the
form set forth in Exhibit A containing the Private Placement Legend as set forth
in Section 2.03 (the "U.S. Physical Notes"), as hereinafter provided.
The U.S. Physical Notes, together with any other certificated notes in
registered form, are sometimes collectively referred to as the "Physical
Notes." The U.S. Global Notes, together with any other global notes in
registered form, are sometimes collectively referred to as the "Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 3.13, shall be in the form of one or more
Global Notes.
Section 2.02. Form of Trustee' Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: __________ By: __________________________
Authorized Signatory
If an appointment of an Authenticating Agent is made pursuant to Section
7.15, the Notes may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By _____________________________
As Authenticating Agent
By _____________________________
Authorized Signatory
Dated:
Section 2.03. Restrictive Legends. (a) Except as set forth in Section
3.14(g), unless and until (i) an Initial Note or any Additional Note is sold
pursuant to an effective registration statement, whether pursuant to the
Registration Rights Agreement or otherwise or (ii) an Initial Note or any
Additional Note is exchanged for an Exchange Note in an Exchange Offer pursuant
to an effective Exchange Offer Registration Statement pursuant to the
Registration Rights Agreement, each U.S. Global Note and U.S. Physical Note
shall bear the following legend set forth below (the "Private Placement Legend")
on the face thereof:
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THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As defined in
Rule 144A under the Securities Act) (A "QIB")
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION ACCEPTABLE TO THE COMPANY AND THE
TRUSTEE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
(b) Each Global Note, whether or not an Initial Note or Additional Note,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
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HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.13 AND 3.14 OF THE INDENTURE.
ARTICLE 3
THE NOTES
Section 3.01. Title and Terms. The aggregate principal amount of Notes
that may be authenticated and delivered and Outstanding under this Indenture is
initially limited to $500,000,000, but may be increased, without limit, subject
to compliance with the covenants contained in Article 4 below and the conditions
set forth in Section 3.03, and except as may be limited by applicable law. The
Initial Notes will be issued in an aggregate principal amount of $500,000,000.
All the Original Notes shall vote and consent together on all matters as one
class, and none of the Original Notes will have the right to vote or consent as
a class separate from one another on any matter. Subject to the covenants
contained in Article 4 below, the Company may issue Additional Notes hereunder.
Additional Notes (including any Exchange Notes issued in exchange therefor)
shall vote (or consent) as a class with the other Notes and otherwise be treated
as Notes for all purposes of this Indenture.
The Notes shall be known and designated as the "10 7/8% Senior Subordinated
Notes Due 2009" of the Company. The final Stated Maturity of the Notes shall be
May 1, 2009. Interest on the Outstanding principal amount of Notes will accrue,
subject to Section 3.11, at the rate of 10 7/8% per annum and will be payable
semiannually in arrears on May 1 and November 1 in each year, commencing on
November 1, 1999, to Holders of record at the close of business on the
immediately preceding April 15 and October 15, respectively (each such April 15
and October 15, a "Regular Record Date"). Interest on the Original Notes will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid, from May 17, 1999, and interest
on any Additional Notes (and Exchange Notes issued in exchange therefor) will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid on such Additional Notes, from the
date of issuance of such Additional Notes; provided that if any Note is
surrendered for exchange on or after a record date for an Interest Payment Date
that will occur on or after the date of such exchange, interest on the Note
received in exchange thereof will accrue from the date of such Interest Payment
Date. The Company will pay interest on overdue principal and, to the extent
lawful, interest on overdue installments of interest and Liquidated Damages, if
any, at a rate of 1% per annum in excess of the interest rate referred to above.
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The principal of, and premium, if any, and interest and Liquidated Damages,
if any, on the Notes shall be payable at the Corporate Trust Office or at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (each, a "Place of Payment") in the manner
provided in Section 4.01(b); provided, however, that, under the circumstances
set forth in Section 4.01(b), payment of interest and Liquidated Damages on a
Note may be made by wire transfer of immediately available funds to the account
specified by the Holder of a Global Note or by check mailed to the address of
the Person entitled thereto as such address shall appear in the Register.
Section 3.02. Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 3.03. Execution, Authentication and Delivery and Dating. The Notes
shall be executed on behalf of the Company by an Officer of such Company. The
signature of such Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of an individual who was at
any time a proper Officer of the Company shall bind the Company, notwithstanding
that such individual has ceased to hold such office prior to the authentication
and delivery of such Notes or did not hold such office at the date of such
Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes for original issue in the aggregate principal amount not to exceed
$500,000,000 and (ii) Additional Notes from time to time for original issue in
aggregate principal amounts specified by the Company and (iii) Exchange Notes
from time to time for issue in exchange for a like principal amount of Initial
Notes or Initial Additional Notes, in each case specified in clauses (i) through
(iii) above, upon a written order of the Company in the form of an Officer's
Certificate (an "Authentication Order"), and in the case of clause (ii), upon
receipt by the Trustee of an Opinion of Counsel confirming that the Holders of
the Outstanding Notes will be subject to federal income tax in the same amounts,
in the same manner and at the same times as would have been the case if such
Additional Notes were not issued. Such Officer's Certificates shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes, that the issuance of such Notes (in the case of Additional
Notes) does not contravene any provision of Article 4 of this Indenture, whether
the Notes are to be issued as one or more Global Notes or Physical Notes, the
name or names of the initial Holder or Holders, and such other information as
the Company may include or the Trustee may reasonably request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
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Section 3.04. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and upon receipt of an Authentication Order
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company consider appropriate for temporary Notes. If temporary Notes are issued,
the Company will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Company in a Place of Payment, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and upon receipt of an Authentication Order the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes of the same series and tenor.
Section 3.05. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of Notes and
of transfers of Notes. The Trustee is hereby appointed "Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided.
Upon surrender for transfer of any Note at the office or agency of the
Company in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes or
Initial Additional Notes for Exchange Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC and the
Trustee shall have received an Officer's Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
an exchange offer thereunder has been consummated. The Initial Notes or
Additional Notes to be exchanged for the Exchange Notes shall be canceled by the
Trustee.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
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Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes under this
Section 3.05.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes. If (a) any
mutilated Note is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (b) there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
an Authentication Order the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note
of like tenor and principal amount, bearing a number not contemporaneously
Outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 3.06, 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.
Every new Note issued pursuant to this Section 3.06 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest Rights Preserved. Interest and
Liquidated Damages on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest and Liquidated Damages
specified in Section 3.01.
Any interest and Liquidated Damages on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the
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relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest shall be paid by the Company, as provided in 3.07(a) or
3.07(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes) 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 Note 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 reasonably 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 provided in this Section 3.07(a). Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not 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,
the amount thereof and the Special Record Date and payment date therefor to be
mailed, first class postage prepaid, to each Holder at such Holder's address as
it appears in the 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 so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered on such Special Record Date and shall no longer be payable
pursuant to the following 3.07(b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause (b), such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.07, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest (including
any Liquidated Damages) accrued and unpaid, and to accrue, that were carried by
such other Note.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Section 3.07) interest
and Liquidated Damages, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Subsidiary Guarantors, the Trustee or any agent of the Company, the Subsidiary
Guarantors or the Trustee shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the
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Trustee, be delivered to the Trustee and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly canceled by the Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section 3.09,
except as expressly permitted by this Indenture. All canceled Notes held by the
Trustee shall be disposed of in accordance with the Trustee's customary
procedures.
Section 3.10. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. Payment of Liquidated Damages. (a) Under certain
circumstances the Company will be obligated to pay certain Liquidated Damages to
the Holders of certain Initial Notes, as more particularly set forth in such
Initial Notes.
(b) Under certain circumstances the Company may be obligated to pay
certain Liquidated Damages to the Holders of certain Initial Additional Notes,
as may be more particularly set forth in such Initial Additional Notes.
Section 3.12. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" or "CINS" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use such "CUSIP" or "CINS" numbers in
addition to serial numbers in notices of redemption, repurchase or other notices
to Holders as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such "CUSIP" or "CINS"
numbers either as printed on the Notes or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP" or
"CINS" numbers.
Section 3.13. Book-entry Provisions for Global Notes.
(a) Each Global Note initially shall (i) be registered in the name of the
Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) to the
extent relevant thereto, bear legends as set forth in Section 2.03. None of the
Company or the Subsidiary Guarantors, nor any of their agents shall have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of beneficial ownership interests of, a Global Note, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the
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Company, the Subsidiary Guarantors or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or 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 Note. The registered Holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.14. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) upon request of an Agent
Member (for itself or on behalf of a beneficial holder) by written notice given
to the Trustee by or on behalf of the Depositary in accordance with customary
procedures of the Depositary and (ii) Physical Notes shall be transferred to
beneficial owners in exchange for their beneficial interests in the Global Notes
in the event that (A) the Depositary (1) notifies the Company that it is
unwilling or unable to continue as Depositary for the applicable Global Note and
a successor depositary is not appointed by the Company within 90 days or (2)
the Depositary ceases to be a "Clearing Agency" registered under the Exchange
Act , (B) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Physical Notes under this Indenture or (C) there
shall have occurred and be continuing a Default or Event of Default. In
connection with any transfer or exchange of a portion of the beneficial interest
in any Global Note to beneficial owners for Physical Notes pursuant to paragraph
(b) of this Section 3.13, the Registrar shall record on its books and records
(and make a notation on the Global Note of) the date and a decrease in the
principal amount of such Global Note in an amount equal to the beneficial
interest in the Global Note being transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Physical Notes of
like tenor and principal amount of authorized denominations. In connection with
a transfer of an entire Global Note to beneficial owners pursuant to clause (ii)
of this paragraph (b), the applicable Global Note 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 applicable
Global Note, an equal aggregate principal amount at maturity of Physical Notes
of authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) The Company, the Subsidiary Guarantors, any other obligor upon the
Notes or the Trustee, in the discretion of any of them, may treat as the Act of
a Holder any instrument or writing of any Person that is identified by the
Depositary as the owner of a beneficial interest in the Global Note, provided
that the fact and date of the execution of such instrument or writing is proved
in accordance with Section 1.08(b).
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(e) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.14, bear the Private Placement Legend.
Section 3.14. Transfer Provisions. Unless and until (i) an Initial Note or
any Initial Additional Note is sold pursuant to an effective registration
statement, whether pursuant to the Registration Rights Agreement or otherwise,
or (ii) an Initial Note or any Initial Additional Note is exchanged for an
Exchange Note in the Exchange Offer pursuant to an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) General. The provisions of this Section 3.14 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note.
(b) Transfers to QIBs. With respect to the registration of any proposed
transfer of a Note that is a Restricted Security to a QIB, the Registrar shall
register such transfer if it complies with all other applicable requirements of
this Indenture (including Section 3.05 and Section 3.13) and,
(i) if such transfer is being made by a proposed transferor who
has checked the box provided for on the form of such Note stating, or
has otherwise certified to the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided for on
the form of such Note stating, or has otherwise certified to the Company
and the Registrar in writing, that it is purchasing such Note for its
own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule 144A;
and
(ii) if the proposed transferee is or is acting through an Agent
Member, and the Note to be transferred consists of (A) a Physical Note
that after transfer is to be evidenced by an interest in a Global Note
or (B) a beneficial interest in a Global Note that after the transfer is
to be evidenced by a Physical Note, upon receipt by the Registrar of
written instructions given in accordance with the Depositary's and the
Registrar's procedures,
(I) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical Note or
such beneficial interest in such transferor Global Note to be transferred, and
(II) the Trustee shall (x) cancel the Physical Note so transferred or (y)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be.
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(c) Transfers pursuant to Rule 144 and transfer to Lyondell. With respect
to the registration of any proposed transfer of a Note that is a Restricted
Security (i) pursuant to the exemption from registration under the Securities
Act provided by Rule 144 thereunder or (ii) to the Company, the Register shall
register such transfer if it complies with all other requirements of this
Indenture (including Section 3.05 and Section 3.13) and,
(A) if such transfer is being made by a proposed transferor who
has checked the box provided for on the form of such Note stating, or
has otherwise certified to the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule
144 or that such sale has been made to the Company; and
(B) if the proposed transferee is not the Company and is or is
acting through an Agent Member, and the Note to be transferred consists
of (1) a Physical Note that after transfer is to be evidenced by an
interest in a Global Note or (2) a beneficial interest in a Global Note
that after the transfer is to be evidenced by a Physical Note, upon
receipt by the Registrar of written instructions given in accordance
with the Depositary's and the Registrar's procedures, (I) the Registrar
shall (x) reflect on its books and records (and make a notation on the
relevant Global Note of) the date and an increase in the principal
amount of the transferee Global Note or (y) deliver Physical Notes, in
each case in an amount equal to the principal amount of the Physical
Note or such beneficial interest in such transferor Global Note to be
transferred, and (II) the Trustee shall (x) cancel the Physical Note so
transferred or (y) reflect on its books and records (and make a notation
on the relevant Global Note of) the date and a decrease in the principal
amount of such transferor Global Note, as the case may be; and
(C) if the proposed transferee is the Company, (I) the Registrar
shall deliver Physical Notes in an amount equal to the principal amount
of the Physical Note or such beneficial interest in such transferor
Global Note to be transferred, and (II) the Trustee shall (x) cancel the
Physical Note so transferred or (y) reflect on its books and records
(and make a notation on the relevant Global Note of) the date and a
decrease in the principal amount of such transferor Global Note, as the
case may be.
The Company and the Trustee may require additional
certifications or other information to confirm that any proposed
transfer is being made pursuant to Rule 144 under the Securities Act.
(d) Other Transfers. The Registrar shall effect and register, upon
receipt of a written request from the Company to do so, a transfer not otherwise
permitted by this Section 3.14, such registration to be done in accordance with
the otherwise applicable provisions of this Section 3.14, upon the furnishing by
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Company and the Trustee) to the
effect that, and such other certifications or information as the Company may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
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A Note that is a Restricted Security may not be transferred other than as
provided in this Section 3.14. A beneficial interest in a Global Note that is a
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 3.14.
(e) Limitation on Issuance of Physical Notes. No Physical Note shall be
exchanged for a beneficial interest in any Global Note, except in accordance
with Section 3.13 and this Section 3.14.
(f) Execution, Authentication and Delivery of Physical Notes. In any case
in which the Registrar is required to deliver a Physical Note to a transferee or
transferor, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, such Physical Note.
(g) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend, unless (i) the
requested transfer is after the relevant Resale Restriction Termination Date
with respect to such Notes, (ii) upon written request of the Company after there
is delivered to the Registrar an opinion of counsel (which opinion and counsel
are satisfactory to the Company and the Trustee) to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act, or (iii) such
Notes are sold or exchanged pursuant to an effective registration statement
under the Securities Act.
(h) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.13 or this Section 3.14 (including
all Notes received for transfer pursuant to this Section 3.14). The Company
shall have the right to require the Registrar to deliver to the Company, at the
Company' expense, copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
In connection with any transfer of any Note, the Trustee, the Registrar,
the Company and the Subsidiary Guarantors shall be entitled to receive, shall be
under no duty to inquire into, may conclusively presume the correctness of, and
shall be fully protected in relying upon the certificates, opinions and other
information referred to herein (or in the forms provided herein, attached hereto
or to the Notes, or otherwise) received from any Holder and any transferee of
any Note regarding the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such Note and any other
facts and circumstances related to such transfer.
(i) Certain Additional Terms Applicable to Physical Notes. Any transferee
entitled to receive a Physical Note may request that the principal amount
thereof be
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evidenced by one or more Physical Notes in any authorized denomination or
denominations and the Registrar shall comply with such request if all other
transfer restrictions are satisfied.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Principal, Premium and Interest. (a) The Company
will duly and punctually pay the principal of (and premium, if any) and interest
and Liquidated Damages, if any, on the Notes in accordance with the terms of the
Notes and this Indenture. An installment of principal (and premium, if any) or
interest and Liquidated Damages shall be considered paid on the date it is due
if the Trustee or Paying Agent or Paying Agents hold on that date money
designated for and sufficient to pay the installment.
(b) Payments (including principal, premium, if any, interest and
Liquidated Damages, if any) in respect of the Notes represented by the Global
Notes, the Holder of which has given wire transfer instructions on or prior to
the relevant record date, shall be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Physical Notes, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, at the office or
agency maintained by the Company in The City of New York referred to in Section
4.02 or, at the option of the Company, by mailing a check to each such Holder's
registered address.
Section 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain such 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 hereby designates the Corporate Trust Office as an initial Place of
Payment and as such office of the Company in the Borough of Manhattan, The City
of New York, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands so long as such Corporate Trust
Office remains a Place of Payment.
Section 4.03. Money for Payments to Be Held in Trust. If the Company shall
at any time act as its own Paying Agent, it will, on or before each due date of
the principal of (and premium, if any) or interest and Liquidated Damages, if
any, on, any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest and Liquidated Damages, if any, so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest and
Liquidated Damages, if any,
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on, any Notes, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest and Liquidated Damages, if any, so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest and Liquidated Damages, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
If the Company is not acting as its own Paying Agent, the Company will
cause any Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of (and premium,
if any) or interest and Liquidated Damages, if any, on Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any such payment of principal (and
premium, if any) or interest and Liquidated Damages, if any;
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(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.
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 by Company
Order 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 trusts 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.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest and Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal (and premium, if any) or interest and
Liquidated Damages, if any, has become due and payable shall be paid in the
appropriate proportion to the Company upon a Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
Section 4.04. SEC Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes issued hereunder are outstanding,
the Company will furnish to each Trustee and the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a ''Management's Discussion and Analysis
of Financial Condition and Results of Operations'' and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, the
Company will file a copy of all such information and reports with the SEC for
public availability and make such information available to securities analysts
and prospective investors upon request.
(b) For so long as any Notes remain outstanding, the Company will furnish
to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(c) All obligors on the Notes will comply with Section 314(a) of the TIA.
(d) The Company shall promptly mail copies of all such annual reports,
information, documents and other reports provided to the Trustee pursuant to
clauses (a)
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and (c) hereof to the Holders at their addresses appearing in the Register
maintained by the Registrar.
(e) 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 or
determinable from 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 Officer's Certificates).
Section 4.05. Certificates to Trustee. (a) The Company will deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of the
Company stating that such officer has conducted or supervised a review of the
activities of the Company and its Restricted Subsidiaries and the Company's and
its Restricted Subsidiaries' performance under this Indenture and that, based
upon such review, to the best of such officer's knowledge, the Company has
fulfilled all obligations thereunder or, if there has been a default in the
fulfillment of any such obligation (determined without regard to any period of
grace or requirement of notice provided in this Indenture), specifying each such
default and the nature and status thereof.
(b) The Company will deliver to the Trustee, as soon as possible and in
any event within 30 days after the Company becomes aware of the occurrence of an
Event of Default or a Default, an Officer's Certificate setting forth the
details of such Event of Default or Default, and the action which the Company
proposes to take or has taken with respect thereto.
(c) The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company a written statement by the Company's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii whether, in connection with their audit examination,
any Default has come to their attention and, if such a Default has come to their
attention, specifying the nature and period of the existence thereof.
Section 4.06. Limitation on Indebtedness. (a) On or after the Issue Date:
(i) the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, Guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt);
(ii) the Company will not, and will not permit any of its
Restricted Subsidiaries to, issue any Disqualified Stock (including
Acquired Disqualified Stock);
(iii) and the Company will not permit any of its Restricted
Subsidiaries that are not Subsidiary Guarantors to issue any shares of
Preferred Stock (including Acquired Preferred Stock);
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provided, however, that the Company and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) and the Company and the Subsidiary
Guarantors may issue shares of Disqualified Stock (including Acquired
Disqualified Stock) if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements have
been filed with the SEC pursuant to Section 4.04 immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
Letters of credit and bankers' acceptances shall be deemed to have an aggregate
principal amount of Indebtedness equal to the maximum amount available
thereunder.
(b) The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant to
the Existing Credit Facility (and by its Subsidiaries of Guarantees
thereof) in an aggregate principal amount at any time outstanding not to
exceed an amount equal to $3.87 billion less the aggregate amount of all
mandatory repayments (other than mandatory prepayments triggered solely
by the issuance of Indebtedness or Preferred Stock of a Finance
Subsidiary to refinance the Existing Credit Facility) applied to (x)
repay loans (other than revolving credit loans) outstanding thereunder
or (y) permanently reduce the revolving credit commitments thereunder;
(ii) the incurrence by the Company and the Subsidiary Guarantors
of Indebtedness represented by the Senior Secured Notes issued on the
Issue Date, the Original Notes (but not any Additional Notes) and the
Subsidiary Guarantees thereof;
(iii) the incurrence by the Company and its Restricted
Subsidiaries of Existing Indebtedness (other than Indebtedness of the
type described in clauses (i), (ii) or (v) through (xii) of this
covenant);
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of any Permitted Refinancing in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease
or refund, Indebtedness that was permitted to be incurred under the
Fixed Charge Coverage Ratio test set forth above or clauses (ii) or
(iii) above or (xiii) or (xiv) below or this clause (iv);
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that (i) if
the Company or any Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes or
the Subsidiary Guarantee, as the case may be, and (ii)(A) any subsequent
issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person
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that is not either the Company or a Restricted Subsidiary shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any Restricted Subsidiary
of Hedging Obligations that are incurred for the purpose of (A) fixing
or hedging interest rate or currency risk with respect to any fixed or
floating rate Indebtedness that is permitted by the Indenture to be
outstanding or any receivable or liability the payment of which is
determined by reference to a foreign currency; provided that the
notional principal amount of any such Hedging Obligation does not exceed
the principal amount of the Indebtedness to which such Hedging
Obligation relates or (B) fixing or hedging risk with respect to
fluctuations in the cost of raw materials; provided that such obligation
is entered into for valid business purposes other than speculative
purposes (as determined by the Company's or such Restricted Subsidiary's
principal financial officer in the exercise of his or her good faith
business judgment);
(vii) the issuance by any of the Company's Restricted
Subsidiaries of shares of Preferred Stock to the Company or a Wholly
Owned Restricted Subsidiary; provided that (A) any subsequent issuance
or transfer of Equity Interests that results in such Preferred Stock
being held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary or (B) the transfer or other disposition by the
Company or a Wholly Owned Restricted Subsidiary of any such shares to a
Person other than the Company or a Wholly Owned Restricted Subsidiary
shall be deemed, in each case, to constitute an issuance of such
Preferred Stock by such Subsidiary on such date that is not permitted by
this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by tender, bid, performance,
government contract, surety or appeal bonds, standby letters of credit
and warranty and contractual service obligations of like nature, trade
letters of credit or documentary letters of credit, in each case to the
extent incurred in the ordinary course of business of the Company or
such Restricted Subsidiary and the incurrence by the Company of
Indebtedness represented by letters of credit incurred in connection
with the PBGC Settlement;
(ix) the incurrence by any Restricted Subsidiary of the Company
of Indebtedness or the issuance by any Restricted Subsidiary of
Preferred Stock, the aggregate principal amount or liquidation
preference of which, together with all other Indebtedness and Preferred
Stock of the Company's Restricted Subsidiaries at the time outstanding
and incurred or issued in reliance upon this clause (ix), does not
exceed $50.0 million;
(x) the issuance by any Finance Subsidiary of Preferred Stock
with an aggregate liquidation preference not exceeding the amount of
Indebtedness of the Company held by such Finance Subsidiary; provided
that the Fixed Charge Coverage Ratio for the Company's most recently
ended four full fiscal quarters for which financial statements have been
filed with the SEC pursuant to the
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covenant described below under Section 4.04 immediately preceding the
date on which such Preferred Stock is issued would have been at least
2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom) as if such Preferred Stock
had been issued at the beginning of such four-quarter period;
(xi) the incurrence of Indebtedness by Foreign Subsidiaries in
an aggregate principal amount (or accreted value, as applicable) at any
time outstanding and incurred in reliance upon this clause (xi) not to
exceed $100.0 million;
(xii) the Guarantee by any Restricted Subsidiary of Indebtedness
of the Company or a Restricted Subsidiary that was permitted to be
incurred by another provision of this covenant;
(xiii) Acquired Debt or Acquired Disqualified Stock; provided
that such Indebtedness or Disqualified Stock was not incurred in
connection with or in contemplation of such Person becoming a Restricted
Subsidiary; and provided further that immediately after giving effect to
such incurrence, the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements
have been filed with the SEC pursuant to Section 4.04 immediately
preceding the date of such incurrence would have been at least 2.0 to 1,
determined on a pro forma basis;
(xiv) Indebtedness or Disqualified Stock of a Specified Joint
Venture or a Subsidiary thereof existing at the time such Specified
Joint Venture first becomes a Restricted Subsidiary; provided that such
Indebtedness or Disqualified Stock was not incurred in connection with
or in contemplation of such Specified Joint Venture becoming a
Restricted Subsidiary; and provided further that immediately after
giving effect to such Specified Joint Venture becoming a Restricted
Subsidiary, the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which financial statements
have been filed with the SEC pursuant to Section 4.04 immediately
preceding the date on which such Specified Joint Venture became a
Restricted Subsidiary would have been, determined on a pro forma basis,
(x) at least 2.0 to 1 or (y) equal to or greater than it was immediately
prior to such Specified Joint Venture becoming a Restricted Subsidiary;
(xv) with respect to any Specified Joint Venture that becomes a
Restricted Subsidiary, the incurrence by such Specified Joint Venture of
Indebtedness under any revolving credit facility in an aggregate
principal amount at any time outstanding not to exceed the aggregate
principal amount of committed financing under all revolving credit
facilities of such Specified Joint Venture as in effect on the Issue
Date; and
(xvi) the incurrence by the Company or any Subsidiary Guarantor
of Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding and incurred in reliance on this
clause (xvi) not to exceed $25.0 million.
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(c) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness or Preferred Stock meets the criteria of more
than one of the categories of permitted Indebtedness described in clauses (i)
through (xvi) above or is entitled to be incurred pursuant to Section 4.06(a),
the Company shall, in its sole discretion, classify such item of Indebtedness or
Preferred Stock in any matter that complies with this covenant and such
Indebtedness or Preferred Stock will be treated as having been incurred pursuant
to the clauses or Section 4.06(a), as the case may be, designated by the
Company. The amount of Indebtedness issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
Section 4.07. Limitation on Restricted Payments. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:
(i) declare or pay any dividend or make any distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (other than (x) dividends or distributions payable in
Qualified Equity Interests of the Company and (y) dividends or
distributions payable to the Company or any Restricted Subsidiary of the
Company);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company, any of its Restricted Subsidiaries
or any Affiliate of the Company (other than any such Equity Interests
owned by the Company or any of its Restricted Subsidiaries);
(iii) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness
("Subordinated Debt") of the Company or any Restricted Subsidiary that
is subordinated by its terms to the Notes or the Subsidiary Guarantees
issued under the Indenture (other than Indebtedness owed to the Company
or any Restricted Subsidiary), except, in each case, payment of interest
or principal at Stated Maturity; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments");
unless, at the time of and after giving effect to such Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the fair
market value (as conclusively evidenced by a Board Resolution) of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to such Restricted Payment):
(A) no Default or Event of Default shall have occurred and be continuing
after giving effect thereto; and
(B) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the most recently ended four full fiscal quarters for which
financial
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statements have been filed with the SEC pursuant to Section 4.04 immediately
preceding the date of such Restricted Payment, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.06(a) and
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the Issue Date (excluding Restricted Payments permitted by Section 4.07(b)(ii)
(to the extent paid to the Company or any of its Restricted Subsidiaries or to
the extent such distributions are deducted as a minority interest in calculating
Consolidated Net Income), Section 4.07(b)(iii), Section 4.07(b)(iv), Section
4.07(b)(v), Section 4.07(b)(vii), Section 4.07(b)(x), Section 4.07(b)(xiv) and
Section 4.07(b)(xvi) and 50% of any Restricted Payments permitted by Section
4.07(b)(viii)), is less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing on April 1, 1999, to the end
of the Company's most recently ended fiscal quarter for which
financial statements have been filed with the SEC pursuant to
Section 4.04 at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100%
of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the
Company or any of its Restricted Subsidiaries from the issue or
sale (other than to a Subsidiary or Joint Venture of the
Company) after the Issue Date of Qualified Equity Interests of
the Company or of debt securities of the Company or any of its
Restricted Subsidiaries that have been converted into or
exchanged for such Qualified Equity Interests of the Company,
plus
(iii) to the extent that any Restricted Investment (other than a
Restricted Investment permitted to be made pursuant to Section
4.07(b)(vii) or Section 4.07(b)(viii) below) that was made after
the Issue Date is sold for cash or otherwise liquidated, repaid
or otherwise reduced, including by way of dividend (to the
extent not included in calculating Consolidated Net Income), for
cash, the lesser of (A) the cash return with respect to such
Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment plus
(iv) an amount equal to the sum of (A) the net reduction in
Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or other transfers of assets (to
the extent not included in calculating Consolidated Net Income),
in each case to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries and (B) the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of an Unrestricted Subsidiary at
the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall not
exceed, in the case of any Unrestricted Subsidiary, the amount
of Restricted Investments (other
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than Restricted Investments permitted to be made pursuant to
Section 4.07(b)(vii) or Section 4.07(b)(viii) below) previously
made after the Issue Date by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary.
(b) If, other than with respect to payments made under 4.07(b)(i) and
4.07(b)(xiv) below, no Default or Event of Default shall have occurred and be
continuing after giving effect to such Restricted Payment, the foregoing
provisions will not prohibit the following Restricted Payments:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the Indenture;
(ii) dividends or distributions by any Restricted Subsidiary of
the Company payable (x) to all holders of a class of Capital Stock of
such Restricted Subsidiary on a pro rata basis or on a basis that is
more favorable to the Company; provided that at least 50% of such class
of Capital Stock is held by the Company and/or one or more of its
Restricted Subsidiaries or (y) to all holders of a class of Preferred
Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor
issued after the Issue Date in compliance with Section 4.06;
(iii) the payment of cash dividends on any series of
Disqualified Stock issued after the Issue Date in an aggregate amount
not to exceed the cash received by the Company since the Issue Date upon
issuance of such Disqualified Stock;
(iv) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of the Company, any Restricted Subsidiary or any
Joint Venture (or the acquisition of all the outstanding Equity
Interests of any Person that conducts no operations and has no assets or
liabilities other than the ownership of Equity Interests in a Joint
Venture) in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary or Joint
Venture of the Company) of, Qualified Equity Interests of the Company;
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (C)(ii) of Section 4.07(a);
(v) the defeasance, redemption or repurchase of Subordinated
Debt with the net cash proceeds from an incurrence of Permitted
Refinancing or in exchange for or out of the net cash proceeds from the
substantially concurrent sale (other than to a Subsidiary or Joint
Venture of the Company) of Qualified Equity Interests of the Company;
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (C)(ii) of Section 4.07(a);
(vi) the repurchase, redemption or other acquisition or
retirement for value of (x) any Equity Interests of the Company or any
Subsidiary of the Company held by any member of the Company's (or any of
its Subsidiaries') management pursuant to any management equity
subscription agreement or stock
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option agreement or (y) any Equity Interests of the Company which are or
are intended to be used to satisfy issuances of Equity Interests upon
exercise of employee or director stock options or upon exercise or
satisfaction of other similar instruments outstanding under employee or
director benefit plans of the Company or any Subsidiary of the Company;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $5.0
million in any fiscal year of the Company;
(vii) Restricted Investments in any of the Specified Joint
Ventures (including without limitation, the purchase of Equity Interests
of a Specified Joint Venture directly from another Person or the
purchase of all the outstanding Equity Interests of any Person that
conducts no operations and has no assets or liabilities other than the
ownership of Equity Interests of a Specified Joint Venture) to the
extent that the proceeds thereof are used to purchase or redeem an
interest of another Person in such Specified Joint Venture (other than
the Company, a Restricted Subsidiary or an Affiliate of the Company,
except a Person that is deemed to be an Affiliate solely by virtue of
its ownership of Equity Interests of the Company acquired in exchange
for Equity Interests in such Specified Joint Venture); provided that
after giving pro forma effect thereto as if such Restricted Payment (and
any related incurrence of Indebtedness) had been made at the beginning
of the most recently ended four full fiscal quarter period for which
financial statements have been filed with the SEC pursuant to Section
4.04 immediately preceding the date of such Restricted Payment, the
Company would have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.06(a);
(viii) Restricted Investments in any Joint Venture made during
any fiscal year of the Company or within 45 days after the end of such
fiscal year in amounts that, together with all other Restricted
Investments made in such Joint Venture in respect of such fiscal year in
reliance on this Section 4.07(b)(viii) during such fiscal year or within
45 days after the end of such fiscal year, do not exceed the amount of
dividends or distributions previously paid in respect of such fiscal
year to the Company or any Restricted Subsidiary by such Joint Venture;
(ix) the payment of dividends on the Company's common stock in
an aggregate amount per annum not to exceed the product of
(i) $0.90 and
(ii) the sum, without duplication, of
(w) the number of shares outstanding on the day prior to
the Issue Date plus
(x) the greater of (I) if the Company issues shares of its
common stock on or after the Issue Date in one or more equity
offerings for cash, to the extent that the gross proceeds
therefrom do not exceed $500 million, such number of shares of
common stock or (II) the number of shares issued in the stock
offering being made concurrently with the
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placement of the Initial Notes (including pursuant to the
exercise of the overallotment option by the underwriters of the
stock offering), plus
(y) if the Company issues shares of its common stock after
the Issue Date, to the extent (1) such shares are issued in
exchange for or (2) the net cash proceeds therefrom are used
substantially concurrently to acquire Equity Interests (held by
a Person other than the Company, a Restricted Subsidiary or an
Affiliate of the Company, except a Person that is deemed to be
an Affiliate solely by virtue of its ownership of Equity
Interests of the Company acquired in exchange for Equity
Interests in such Specified Joint Venture) of a Specified Joint
Venture that immediately prior to such issuance was or as a
result of such exchange or acquisition becomes a Restricted
Subsidiary (and such Specified Joint Venture is not subsequently
designated as an Unrestricted Subsidiary), such number of shares
of common stock plus
(z) the sum of (1) 1,000,000 and (2) such number of shares
of common stock of the Company as are issued after the Issue
Date pursuant to the exercise of employee or director stock
options granted prior to the Issue Date or issued after the
Issue Date pursuant to other employee or director benefit plans
of the Company or any of its Restricted Subsidiaries or issuable
pursuant to the exercise of employee or director stock options
granted after the Issue Date; provided that the aggregate number
of shares includable pursuant to this clause (z)(2) with respect
to shares issued or issuable during any fiscal year of the
Company shall not exceed 1,000,000;
provided further that the number of shares referred to in
clauses (x), (y) and (z) shall be adjusted to reflect any stock
split (or reverse stock split) or stock dividend made after the
Issue Date and prior to the date such shares were issued;
(x) distributions or payments of Receivables Fees;
(xi) (A) Investments in any Joint Venture or Unrestricted
Subsidiary organized to construct, own and/or operate a propylene oxide
plant in the European Union in an aggregate amount that, together with
all other Investments made pursuant to this Section 4.07(b)(xi), does
not exceed $100.0 million and (B) the pledge of the Capital Stock of
such Joint Venture or Unrestricted Subsidiary or of a Joint Venture
Subsidiary that has no assets and conducts no operations other than the
holding directly or indirectly of Equity Interests of such Joint Venture
to secure Non-Recourse Debt of such Joint Venture or Unrestricted
Subsidiary;
(xii) (A) (x) the transfer of the TDI Assets to a newly formed
Joint Venture or Unrestricted Subsidiary or (y) the designation of any
Restricted Subsidiary that has no assets or liabilities other than all
or a portion of the TDI Assets as an Unrestricted Subsidiary, in each
case, in connection with the incurrence of Indebtedness by such Joint
Venture or Unrestricted Subsidiary or
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Rhodia or a wholly-owned subsidiary of Rhodia to improve the Rhodia TDI
Plant and (B) the pledge of the Capital Stock of such Joint Venture or
Unrestricted Subsidiary or of a Joint Venture Subsidiary that has no
assets and conducts no operations other than the holding directly or
indirectly of Equity Interests of such Joint Venture to secure Non-
Recourse Debt of such Joint Venture or Unrestricted Subsidiary or Rhodia
or a wholly-owned subsidiary of Rhodia;
(xiii) the repurchase of any Subordinated Debt at a purchase
price not greater than 101% of the principal amount thereof in the event
of (x) a Change of Control pursuant to a provision no more favorable to
the holders thereof than the provisions of Section 4.13 or (y) an Asset
Sale pursuant to a provision no more favorable to the holders thereof
than the provisions of Section 4.09; provided that, in each case, prior
to such repurchase the Company has made a Change of Control Offer or
Asset Sale Offer, as applicable, and repurchased all Notes that were
validly tendered for payment in connection with such Change of Control
Offer or Asset Sale Offer;
(xiv) distributions by any Restricted Subsidiary or Joint
Venture of chemicals to a holder of Capital Stock of such Restricted
Subsidiary or Joint Venture if such distributions are made pursuant to a
provision in a joint venture agreement or other arrangement entered into
in connection with the establishment of such Joint Venture or Restricted
Subsidiary that requires such holder to pay a price for such chemicals
equal to that which would be paid in a comparable transaction negotiated
on an arms-length basis (or pursuant to a provision that imposes a
substantially equivalent requirement);
(xv) any other Restricted Payment which, together with all other
Restricted Payments made pursuant to this Section 4.07(b)(xv) on or
after the date of the Indenture, does not exceed $25 million (after
giving effect to any subsequent reduction in the amount of any
Investments made pursuant to this Section 4.07(b)(xv) as a result of the
repayment or other disposition thereof for cash as set forth in clause
(iii) of the first paragraph above, the amount of such reduction not to
exceed the amount of such Investments previously made pursuant to this
Section 4.07(b)(xv)); and
(xvi) dividends or distributions by any Joint Venture (other
than a Specified Joint Venture) to all holders of a class of Capital
Stock of such Joint Venture permitted by Section 4.07(b)(ii)(x) above;
provided that after giving effect to such dividends or distributions and
any related transactions, the Joint Venture making such dividends or
distributions to such holders is contractually entitled to receive, and
receives within 180 days before or after the date of such dividends or
distributions, directly or indirectly, an equivalent or larger cash
payment from each such holder (other than from a holder that is the
Company or any Restricted Subsidiary) or from an Affiliate of such
holder, which cash payment has not been previously applied pursuant to
this Section 4.07(b)(xvi) to offset any other dividend or distribution
by such Joint Venture to such holder and (y) such dividends or
distributions do not exceed such holders' pro rata share of the Joint
Venture's cash flows from operating activities, minus any non-cash
charge to the extent that it represents an accrual of or reserve for
cash
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expenditures in any future period or amortization of a prepaid cash
expense in any future period.
(c) The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments Section
4.07(a) (except to the extent such Investments were repaid in cash, and, in the
case of a Joint Venture (and any Subsidiary of a Joint Venture) designated as an
Unrestricted Subsidiary on the first day that it is a Subsidiary of the Company,
except to the extent that (1) such Investments were made after the Issue Date or
(2) in the case of a Specified Joint Venture, such Investments were made prior
to the Issue Date). All such outstanding Investments (except as provided in the
parenthetical included in the preceding sentence) will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as conclusively determined by the Board of
Directors). Such designation will only be permitted if any such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. In the case of any
designation by the Company of a Person as an Unrestricted Subsidiary on the
first day that such Person is a Subsidiary of the Company in accordance with the
provisions of the Indenture, such designation shall be deemed to have occurred
for all purposes of the Indenture simultaneously with, and automatically upon,
such Person becoming a Subsidiary.
(d) Not later than the date of making any Restricted Payment, other than
those permitted by Sections 4.07(b)(ii)(x), 4.07(b)(vi), 4.07(b)(x) and
4.07(b)(xiv) above, and not later than the 120th day after making any Restricted
Payment permitted by Section 4.07(b)(vi) above, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.
Section 4.08. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries and Joint Ventures. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
restriction on the ability of any Restricted Subsidiary to:
(i) (A) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (1) on its Capital Stock
or (2) with respect to any other interest or participation in, or
measured by, its profits or (B) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries;
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except for such restrictions existing under or by reason of:
(a) existing agreements as in effect on the Issue Date;
(b) Indebtedness permitted by the Indenture to be incurred containing
restrictions on the ability of Restricted Subsidiaries to consummate
transactions of the types described in clauses (i), (ii) or (iii) above not
materially more restrictive than those contained in the Indenture;
(c) the Indenture and the Senior Secured Notes Indentures;
(d) applicable law;
(e) existing restrictions with respect to a Person acquired by the Company
or any of its Restricted Subsidiaries (except to the extent such restrictions
were put in place in connection with or in contemplation of such acquisition),
which restrictions are not applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property or assets of the Person,
so acquired;
(f) customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business;
(g) construction loans and purchase money obligations (including Capital
Lease Obligations) for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so constructed or acquired;
(h) in the case of clause (iii) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject to such
security agreements or mortgages;
(i) a Permitted Refinancing, provided that the restrictions contained in
the agreements governing such Permitted Refinancing are not materially more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced (as conclusively evidenced by a Board
Resolution);
(j) customary restrictions on a Finance Subsidiary imposed in such Finance
Subsidiary's organizational documents or by the terms of its Preferred Stock;
(k) any restriction with respect to shares of Capital Stock of a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of such shares of Capital Stock or any restriction with respect to
the assets of a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of such assets or all or substantially all the
Capital Stock of such Restricted Subsidiary pending the closing of such sale or
disposition;
(l) in the case of any Restricted Subsidiary that is a Joint Venture,
customary restrictions on such Restricted Subsidiary contained in its joint
venture agreement, which
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restrictions are consistent with the past practice of the Company and its
Restricted Subsidiaries (as conclusively evidenced by a Board Resolution);
(m) existing restrictions with respect to a Specified Joint Venture or the
property or assets thereof or a Subsidiary of a Specified Joint Venture or the
property or assets thereof, in each case, at the time such Specified Joint
Venture first becomes a Restricted Subsidiary (except to the extent such
restrictions were put in place in connection with or in contemplation of such
Specified Joint Venture becoming a Restricted Subsidiary), which restrictions
are not applicable to any Person, or the properties or assets of any Person,
other than such Specified Joint Venture or the property or assets thereof or a
Subsidiary of such Specified Joint Venture or the property or assets thereof;
and
(n) the Existing Credit Facility and related documentation as the same is
in effect on the Issue Date and as amended, modified, extended, renewed,
refunded, refinanced, restated or replaced from time to time; provided that the
Existing Credit Facility and related documentation as so amended, modified,
extended, reviewed, refunded, refinanced, restated or replaced is not materially
more restrictive, taken as a whole, as to the matters enumerated above than the
Existing Credit Facility and related documentation as in effect on the Issue
Date (as conclusively evidenced by a Board Resolution).
For purposes of determining compliance with this covenant, in the event
that a restriction meets the criteria of more than one of the categories of
permitted restrictions described in clauses (a) through (n) above, the Company
shall, in its sole discretion, classify such restriction in any matter that
complies with this covenant and such restriction will be treated as existing
pursuant to the clauses designated by the Company.
(b) The Company will use best efforts (consistent with its contractual
obligations and fiduciary duties to any Joint Venture, in each case, as in
effect on the Issue Date) not to permit any of its Joint Ventures that are not
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction on the ability of such Joint
Venture to:
(i) (A) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (1) on its Capital Stock
or (2) with respect to any other interest or participation in, or
measured by, its profits or (B) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) such Joint Venture's joint venture agreement or its credit facility
(provided that in each case such restrictions are consistent with the past
practice of the Company);
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(b) in the case of any Joint Venture existing on the Issue Date, its
existing agreements as in effect on the date of the Indenture and as amended,
modified, extended, restated or replaced from time to time; provided that no
such amendment, modification, extension, restatement or replacement results in
agreements that are materially more restrictive, taken as a whole, as to the
matters enumerated above than the existing agreements as in effect on the date
of the Indenture (as conclusively evidenced by a Board Resolution);
(c) in the case of LCR, any instrument governing its Indebtedness; and
(d) the restrictions described in clauses (d), (e), (f), (g), (h), (j), (k)
and (n) of Section 4.08(a) (assuming that references in clauses (h) and (k) to a
Restricted Subsidiary were references to a Joint Venture).
Section 4.09. Limitation on Sales of Assets. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, consummate an Asset
Sale unless:
(i) the Company and/or the Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value (as conclusively evidenced by a Board
Resolution set forth in an Officers' Certificate delivered to the
Trustees) of the assets or Equity Interests issued or sold or otherwise
disposed of; and
(ii) at least 80% of the consideration therefor received by the
Company and/or such Restricted Subsidiary is in the form of
(A) cash or Cash Equivalents or
(B) a controlling interest or a joint venture interest
(to the extent otherwise permitted by the Indenture) in a
business engaged in a Permitted Business or long-term property
or assets that are used or useful in a Permitted Business;
provided that the amount of (x) any liabilities (as shown on the Company's
or such Restricted Subsidiary's most recent balance sheet) of the Company
or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any
guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability and (y) any securities,
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are promptly converted by the Company
or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option:
(i) to permanently repay Senior Indebtedness (and to
correspondingly reduce commitments with respect thereto in the case of
revolving borrowings) of
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the Company or a Subsidiary Guarantor or Indebtedness (and to
correspondingly reduce commitments with respect thereto in the case of
revolving borrowings) of any Restricted Subsidiary that is not a
Subsidiary Guarantor; or
(ii) to acquire a controlling interest or a joint venture
interest (to the extent otherwise permitted by the Indentures) in
another business or, the making of a capital expenditure or the
acquisition of other long-term assets, in each case, in a Permitted
Business (or enter into a binding commitment for any such expenditure or
acquisition); provided that such binding commitment shall be treated as
a permitted application of Net Proceeds from the date of such commitment
until and only until the earlier of (x) the date on which such
expenditure or acquisition is consummated and (y) the 180th day
following the expiration of the aforementioned 360 day period. If the
expenditure or acquisition contemplated by such binding commitment is
not consummated on or before such 180th day and the Company shall not
have applied such Net Proceeds pursuant to clause (i) above on or before
such 180th day, such commitment shall be deemed not to have been a
permitted application of Net Proceeds at any time.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Existing Credit Facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
the Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this Section 4.09(b) will be
deemed to constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $25 million, the
Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes and, if the
Company is required to do so under the terms of any other Indebtedness ranking
pari passu with such Notes, such other Indebtedness, on a pro rata basis with
the Notes, that may be purchased out of the Excess Proceeds, at an offer price
in cash in an amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase, in accordance with the procedures set forth herein
Prior to complying with the provisions of this Section 4.09, the Company
will either repay all outstanding Senior Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Senior
Indebtedness, to the extent necessary, to permit the repurchase of Notes
required by this covenant.
To the extent that the aggregate amount of Notes (and any other pari passu
Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, the Company may, subject to the
other terms of the Indenture, use any remaining Excess Proceeds for general
corporate purposes.
If the aggregate principal amount of Notes surrendered by Holders thereof
in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.
Upon completion of the offer to purchase made under the Indenture, the
amount of Excess Proceeds shall be reset at zero.
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(d) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with any Asset
Sale Offer.
Section 4.10. Limitation on Affiliate Transactions. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on an arms-length basis and (ii) the Company delivers
to the Trustee (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $10 million, a Board Resolution set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $25 million, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an investment banking firm of national standing; provided that:
(i) transactions or payments pursuant to any employment arrangements or
employee, officer or director benefit plans or arrangements entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) any Restricted Payment permitted by Section 4.07 of the type
described in clause (i) or (ii) of the first paragraph thereof;
(iv) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Restricted Subsidiaries;
(v) transactions entered into on an arms-length basis in the ordinary
course of business between the Company or any of its Restricted Subsidiaries and
any Joint Venture;
(vi) sales (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable and the
provision of billing, collection and other services in connection therewith, in
each case, to an Accounts Receivable Subsidiary in connection with any
Receivables Facility; and
(vii) transactions pursuant to any contract or agreement in effect on the
date of the Indenture as the same may be amended, modified or replaced from time
to time so long as any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the Company and its
Restricted Subsidiaries than the contract or agreement as in effect on the date
of the Indenture (as conclusively evidenced by a Board
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Resolution); in each case, shall not be deemed to be Affiliate Transactions and
therefore not subject to the requirements of clauses (i) and (ii) of the initial
sentence above.
Section 4.11. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (except Permitted Liens) to secure
Indebtedness or other obligations that are pari passu with or subordinated by
their terms in right of payment to the Notes or the Subsidiary Guarantees on any
asset now owned or hereafter acquired, or any income or profits therefrom,
unless all payments due under the Indenture and the Notes or the Subsidiary
Guarantees are secured on an equal and ratable basis with the obligations so
secured (or, if such obligations are subordinated by their terms to the Notes or
the Subsidiary Guarantees, prior to the obligations so secured) until such time
as such obligations are no longer so secured.
Section 4.12. Limitation on Senior Subordinated Indebtedness. The Company
and the Subsidiary Guarantors will not incur any Indebtedness that pursuant to
its terms is subordinate or junior in right of payment to any Senior
Indebtedness and senior in any respect in right of payment to the Notes or the
Subsidiary Guarantees; provided that the foregoing limitation shall not apply to
distinctions between categories of Senior Indebtedness of the Company or a
Subsidiary Guarantor that exist by reason of any Liens or Guarantees arising or
created in respect of some but not all such Senior Indebtedness.
Section 4.13. Repurchase of Notes upon a Change in Control. (a) Upon the
occurrence of a Change of Control, each Holder will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company will mail, or at the Company's
request the Trustee will mail, a notice to each Holder offering to repurchase
the Notes held by such Holder pursuant to the procedures specified in such
notice.
(b) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
and not withdrawn pursuant to the Change of Control Offer, (2) deposit with the
applicable Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered, and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company.
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The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such Note will be in a principal amount
of $1,000 or an integral multiple thereof.
(d) Prior to complying with the provisions of this covenant, but in any
event within 90 days following a Change of Control, the Company will either
repay all outstanding Senior Indebtedness or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Indebtedness, to the
extent necessary, to permit the repurchase of Notes required by this Section
4.13.
(e) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer at
the same or a higher purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.14. Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Leaseback Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if: (a) the Company
or such Restricted Subsidiary, as the case may be, could have (i) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such Sale
and Leaseback Transaction pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.06(a) (whether or not such covenant has ceased to be
otherwise in effect pursuant to Section 4.17) and (ii) incurred a Lien to secure
such Indebtedness pursuant to Section 4.11 without securing the Notes; and (b)
the gross cash proceeds of such Sale and Leaseback Transaction are at least
equal to the fair market value (as conclusively determined by the Board of
Directors) of the property that is the subject of such Sale and Leaseback
Transaction.
Section 4.15. Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, except to such extent as would not be material
to the Company and its Subsidiaries taken as a whole.
Section 4.16. Limitation on Accounts Receivable Facilities. The Company
may, and any of its Restricted Subsidiaries may, sell (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) at any time and from time to time, accounts receivable to any
Accounts Receivable Subsidiary; provided that the aggregate consideration
received in each such sale is at least equal to the aggregate fair market value
of the receivables sold.
Section 4.17. Limited Applicability of Covenants when Notes are rated
Investment-Grade. Notwithstanding the foregoing, the Company's and its
Restricted Subsidiaries' obligations to comply with the provisions of Sections
4.06, 4.07, 4.08, 4.09, 4.10, 4.15, 4.16 and 4.21 will terminate and cease to
have any further effect from and after the first date when the Notes are rated
Investment Grade.
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Section 4.18. Existence. Subject to Articles 4 and 5 of this Indenture,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each such Subsidiary and the rights (whether
pursuant to charter, partnership certificate, agreement, statute or otherwise),
material licenses and franchises of the Company and each such Subsidiary;
provided that the Company shall not be required by this Section 4.18 to preserve
any such right, license or franchise, or the existence of any Restricted
Subsidiary, if the Company shall determine that the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole.
Section 4.19. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (a) all material taxes, assessments and governmental charges levied
or imposed upon (i) the Company or any such Subsidiary, (ii) the income or
profits of any such Subsidiary which is a corporation or (iii) the property of
the Company or any such Subsidiary and (b) all material lawful claims for labor
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such Subsidiary; provided that the Company shall
not be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP.
Section 4.20. Maintenance of Properties and Insurance. The Company will
cause all material assets necessary in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
will cause to be made all necessary repairs, renewals, and replacements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided that nothing in this Section 4.20 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
assets or disposing or abandoning of any of them, if such discontinuance,
disposal or abandonment is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.
The Company will maintain, and will cause each of its Restricted
Subsidiaries to maintain (either in the Company's name or in such Subsidiary's
own name) insurance on all their respective properties consistent with the
insurance maintained on the Issue Date or otherwise in at least such amounts
(with no materially greater risk retention) and against at least such risks as
are usually maintained, retained or insured against in the same general area by
companies of established repute owning similar properties in such area and
engaged in the same or a similar business, in either case, to the extent
available to the Company and its Restricted Subsidiaries on commercially
reasonable terms.
Section 4.21. Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other
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Indebtedness of the Company or any of its Restricted Subsidiaries (except
Indebtedness of such Restricted Subsidiary or a Restricted Subsidiary of such
Restricted Subsidiary) unless (i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture in the form of Exhibit B hereto
providing for the Guarantee of the payment of the Notes by such Restricted
Subsidiary and shall deliver an Opinion of Counsel to the Trustee pursuant to
paragraph (c) below; provided that this paragraph shall not be applicable to (x)
any Guarantee of any Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary, (y) Guarantees
of Indebtedness of a Restricted Subsidiary that is a Foreign Subsidiary by a
Restricted Subsidiary that is a Foreign Subsidiary or (z) the granting of Liens
by a Joint Venture Subsidiary to secure Indebtedness under the Existing Credit
Facility and the Senior Secured Notes. If the Notes are (A) subordinated by
their terms to the Guaranteed Indebtedness, then the Subsidiary Guarantee shall
be subordinated to the guarantee of such Guaranteed Indebtedness, (B) pari passu
with the Guaranteed Indebtedness, then the Subsidiary Guarantee shall be pari
passu with, or senior to, the guarantee of such Guaranteed Indebtedness or (C)
senior to the Guaranteed Indebtedness, then the Subsidiary Guarantee shall be
senior to the guarantee of such Guaranteed Indebtedness at least to the extent
that the Notes are senior to such Guaranteed Indebtedness.
(b) Notwithstanding the foregoing, each Subsidiary Guarantee by a
Restricted Subsidiary shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all the Company's and each Restricted Subsidiary's
Capital Stock in such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) as provided in Section 5.03(b), (ii) the
release or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee (or, in the case of the Subsidiary Guarantees of Lyondell
Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd. issued on the
Issue Date, the release or discharge of its Guarantee of Indebtedness under the
Existing Credit Facility), except a discharge or release by or as a result of
payment under such Guarantee, and (iii) the designation of such Restricted
Subsidiary as an Unrestricted Subsidiary in accordance with the terms of the
Indenture.
(c) The Opinion of Counsel described above shall be to the effect that
such supplemental indenture has been duly authorized, executed and delivered by
such Subsidiary and constitutes a valid and binding obligation of such
Subsidiary, enforceable against such Subsidiary in accordance with its terms
(subject to customary exceptions).
Section 4.22. Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend such term or provision in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
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ARTICLE 5
CONSOLIDATION, MERGER OR SALE OF ASSETS
Section 5.01. Consolidation, Merger or Sale of Assets by the Company. (a)
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all its assets in one or more related
transactions, to another corporation, Person or entity unless:
(i) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the corporation formed by or surviving any such
consolidation or merger (if other than the Company) or the corporation
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the Obligations of the
Company under the Notes and the Indenture pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Company or the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (A) will have a Consolidated Net Worth
immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the
transaction and (B) except with respect to a consolidation or merger of
the Company with or into a Person that has no outstanding Indebtedness,
will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.06(a). The foregoing shall not prohibit the
merger or consolidation of a Wholly Owned Restricted Subsidiary with the
Company; provided that, in connection with any such merger or
consolidation, no consideration (other than common stock in the
surviving Person or the Company) shall be issued or distributed to the
stockholders of the Company.
(b) The Company will not lease all or substantially all its assets to
another Person.
Section 5.02. Successor Company Substituted. (a) Except as provided in
Section 5.02(b), upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all the assets
of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such
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consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation,
merger, sale, assignment, transfer, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation), and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and the predecessor Company shall be
released from all its obligations hereunder and under the Notes.
(b) The sale, assignment, transfer, lease, conveyance or other disposition
by the Company of all or substantially all its property or assets taken as a
whole to one or more of the Company's Subsidiaries shall not relieve the Company
from its obligations under the Indenture and the Notes.
Section 5.03. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor. (a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor unless:
(i) subject to the provisions of Section 5.03(b) below, the
Person formed by or surviving any such consolidation or merger (if other
than the Company or such Subsidiary Guarantor) assumes all the
obligations of such Subsidiary Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee,
under the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iii) the Company would, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, (A)
have a Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) except with respect to a consolidation
or merger with a Person that has no outstanding Indebtedness, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in 4.06(a).
All the Subsidiary Guarantees issued pursuant to clause (i) above shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all such Subsidiary Guarantees had been issued
at the date of the execution hereof.
(b) (i) The requirements of clauses (i) and (iii) of Section 5.03(a) will
not apply in the case of a consolidation with or merger with or into the Company
and the requirements of clause (iii) of Section 5.03(a) will not apply in the
case of a consolidation with or merger with or into another Subsidiary
Guarantor.
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(ii) In the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all the Capital Stock of any Subsidiary Guarantor
to any Person that is not an Affiliate of the Company permitted by the
applicable provisions of the Indenture, such Subsidiary Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture.
Section 5.04. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 7.01 and 7.03, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition referred to in Section 5.01 or
5.03 complies with the applicable provisions of this Indenture.
ARTICLE 6
REMEDIES
Section 6.01. Events of Default. Each of the following constitutes an
"Event of Default":
(a) a default in the payment of interest or any Liquidated Damages on the
Notes when due, which has continued for 30 days, whether or not such payment is
prohibited by the provisions of Article 14;
(b) a default in the payment when due of principal of or premium on, any
Note when due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise, whether or not such payment is
prohibited by the provisions of Article 14;
(c) the failure by the Company to comply with its obligations under
Article 5 above and under Section 4.09 and under Section 4.13;
(d) the Company or any Subsidiary Guarantor defaults in the performance of
or breaches any other covenant or agreement in this Indenture or under the Notes
(other than (a), (b) or (c) above) and such default or breach continues for a
period of 60 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) any default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Significant
Subsidiaries (or any Indebtedness for money borrowed Guaranteed by the Company
or any of its Significant Subsidiaries if the Company or a Significant
Subsidiary does not perform its payment obligations under such Guarantee within
any grace period provided for in the documentation governing such Guarantee)
and, whether such Indebtedness or Guarantee exists on the date of the indenture
or is thereafter created, which default (a) constitutes a Payment Default or (b)
results in the acceleration of such Indebtedness prior to its Stated Maturity,
and in each case, the principal amount of any such Indebtedness, together with
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the principal amount of any other such Indebtedness under which there has been a
Payment Default or that has been so accelerated, aggregates $50 million or more;
(f) failure by the Company or any of its Significant Subsidiaries to pay a
final judgment or final judgments aggregating in excess of $50 million, which
judgment or judgments are not paid, discharged or stayed for a period of 60
days;
(g) a court having jurisdiction in the premises enters a decree or order
for (i) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all the property and
assets of the Company or any Significant Subsidiary or (ii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days;
(h) the Company or any Significant Subsidiary (i) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all the property and assets of the Company or any
Significant Subsidiary or (ii effects any general assignment for the benefit of
creditors; or
(i) except as permitted by the Indenture, any Subsidiary Guarantee issued
hereunder shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under the Subsidiary
Guarantees issued thereunder.
Section 6.02. Acceleration. (a) If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or any Subsidiary Guarantor) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then Outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders (the "Acceleration
Notice")), may, and the Trustee at the request of such Holders shall, declare
the principal of, premium, if any, and accrued but unpaid interest and
Liquidated Damages, if any, on all the Notes to be due and payable. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest and Liquidated Damages, if any, shall be immediately due and payable.
If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs
with respect to the Company or any Subsidiary Guarantor, the principal of,
premium, if any, accrued interest and Liquidated Damages, if any, on the Notes
then Outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
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(b) If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of Designated
Senior Indebtedness or the Representative of such holders 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 or interest and Liquidated Damages on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes 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.
Section 6.04. Waiver of Past Defaults. The Holders of at least a majority
in principal amount of the outstanding Notes, by written notice to the Company
and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences under the Notes, if (i) all
existing Events of Default, other than the nonpayment of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction. 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. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes may 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. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders.
Section 6.06. Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Notes unless:
(a) the Holder gives the Trustee written notice of a continuing Event of
Default;
(b) the Holders of at least 25% in aggregate principal amount of
Outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60 days after
receipt thereof and the offer of security or indemnity; and
(e) during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes do not give the Trustee a
direction inconsistent with the request.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(a) or (b) 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 or any other obligor for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover amounts due the Trustee under Section 7.08,
including 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 as may be necessary
or advisable in order 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 any other obligor upon the Notes), its
creditors or its property 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 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 7.08. 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 7.08 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 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 Notes 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, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.08, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest and Liquidated Damages,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10 upon five Business Days prior notice to
the Company.
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 and expenses, 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 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by
Holders of more than 10% in aggregate principal amount of the then Outstanding
Notes.
Section 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case the Company, any other obligor upon the Notes, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.14. 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 or other similar
law wherever enacted, now or at any time
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hereafter in force, that would prohibit or forgive the Company from paying all
or any portion of the principal of (or premium, if any), interest or Liquidated
Damages, if any, on the Notes contemplated herein or in the Notes or that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenant 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.
ARTICLE 7
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(i) 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
(ii) 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, 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 examine the
certificates and opinions 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).
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) 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 (i) this paragraph does not
limit the effect of Section 7.01(a); (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) 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 6.06.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
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(e) 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 Sections 7.01
and 7.03.
Section 7.02. Notice of Defaults. (a) Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Register, notice of such Default hereunder
actually known to the Trustee unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium (if any) or interest and Liquidated Damages, if
any, on, any Note, the Trustee may withhold such notice if and so long as the
board of directors, the executive committee or a trust committee of Responsible
Officers of the Trustee determines that the withholding of such notice is not
opposed to the interests of the Holders.
(b) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any event or of any Default (except default in the
payment of monies to the Trustee which are required to be paid to the Trustee on
or before a specified date or within a specified time after receipt by the
Trustee of a notice or a certificate which was in fact received), unless the
Trustee shall receive from the Company or a Holder a notice stating that the
same has occurred and is continuing, and specifying the same, and in the absence
of such notice the Trustee may conclusively assume that the same does not exist,
except as aforesaid.
Section 7.03. Certain Rights of Trustees. Subject to the provisions of
Section 7.01:
(i) 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, direction, consent, order, bond, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order thereof, and any
resolution of any Person's board of directors (or any committee thereof) shall
be sufficiently evidenced if certified by an Officer of such Person as having
been duly adopted and being in full force and effect on the date of such
certificate;
(iii) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon the Officer's Certificates of the Company;
(iv) the Trustee may consult with counsel of its selection 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;
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(v) in case an Event of Default occurs and is continuing, the Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to it against any loss, liability or expense
which might be incurred by it in compliance with such request or direction;
(vi) 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, direction, consent, order, bond, note, other
evidence of indebtedness or other paper or document;
(vii) 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
(viii) the rights, privileges, protections, 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 7.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on Form T-
1 supplied to the Company in connection with the registration of any Notes
issued hereunder will be true and accurate subject to the qualifications set
forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes or the
proceeds thereof.
Section 7.05. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company' use of the proceeds from the Notes, it shall not be
responsible for any statement in the offering memorandum for the Notes or in the
Indenture or the Notes (other than its certificate of authentication), the acts
of a prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.
Section 7.06. May Hold Notes. The Trustee, any Authenticating Agent, any
Paying Agent, any Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
Section 7.09 and Section 7.14, may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Registrar or such other agent.
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Section 7.07. Money Held in Trust. Money held by the Trustee in trust
hereunder 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 money
received by it hereunder except as otherwise agreed in writing with the Company.
Section 7.08. Compensation and Reimbursement. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to hold
it harmless against, any loss, damage, claims, liability or expense (including
taxes, other than taxes based on the income of the Trustee) incurred without
negligence or bad faith on its part, 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,
a Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Company' payment obligations pursuant to this Section 7.08 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(g) or 6.01(h), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.09. Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, within 90 days the Trustee
shall either eliminate such conflicting interest, apply to the SEC for
permission to continue as Trustee with such conflicting interest, or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
TIA and this Indenture. To the extent permitted by such Act, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Original Notes and Additional Notes, or a trustee
under any other indenture between the Company and the Trustee.
Section 7.10. Corporate Trustee Required; Eligibility. (a) There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $100,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 7.10
and to the extent permitted by the TIA, the combined capital and surplus of such
Person 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 Trustee
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shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 7.11. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.12.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 7.12 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 7.12 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If at any time:
(i) the Trustee shall fail to comply with Section 7.09 after written
request therefor by the Company or by any Holder who has been a bona fide Holder
for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 7.10 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(iii) 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, (A) the Company may remove the Trustee, or (B) subject
to Section 6.11, any Holder who has been a bona fide Holder for at least six
months may, on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.
(d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
shall promptly appoint a successor Trustee and shall comply with the applicable
requirements of Section 7.12. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of
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such appointment in accordance with the applicable requirements of Section 7.12,
become the successor Trustee and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner required by
Section 7.12, then, subject to Section 6.11, any Holder who has been a bona fide
Holder for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.10. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
Section 7.12. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee, 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) 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, powers and trusts referred to above.
(c) 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 7.
Section 7.13. Merger, Conversion, Consolidation or Succession to Business.
(a) Any corporation 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 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 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 7.14. Preferential Collection of Claims Against the Company. (a)
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Notes), the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against the Company (or any such
other obligor).
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Section 7.15. Appointment of Authenticating Agent. The Trustee may appoint
an Authenticating Agent acceptable to the Company to authenticate the Notes. Any
such appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer, a copy of which instrument shall be promptly furnished to
the Company. Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication (or execution of a certificate of
authentication) by the Trustee includes authentication (or execution of a
certificate of authentication) by such Authenticating Agent. An Authenticating
Agent has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
ARTICLE 8
HOLDERS' LIST AND REPORTS BY TRUSTEE AND THE COMPANY
Section 8.01. The Company to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing. (a) The Company will furnish or cause to be
furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date, and
(ii) 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, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Section 8.01.
(b) The Company will promptly notify the Trustee when any Notes are listed
on any stock exchange and of any delisting thereof.
Section 8.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in Section 8.01 and the names and addresses
of Holders received by the Trustee in its capacity as Registrar; provided,
however, that if and so long as the Trustee shall be the Registrar, the Register
shall satisfy the requirements relating to such list. None of the Company, the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 8.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
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(c) Every Holder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the TIA.
Section 8.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the TIA at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the TIA, the Trustee shall,
within 60 days after each May 15, following the date of this Indenture deliver
to Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a). A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which any Notes are listed, with the SEC and with the
Company.
ARTICLE 9
AMENDMENT, SUPPLEMENT OR WAIVER
Section 9.01. Without Consent of the Holders. (a) Without the consent of
any Holder, the Company and the Trustee may enter into one or more indentures
supplemental hereto, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to provide for the assumption by a successor of the obligations of the
Company under this Indenture,
(iii) to provide for uncertificated Notes in addition to or in place of
certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code,
(iv) to add Subsidiary Guarantees with respect to the Notes, to grant a
Lien under this Indenture to the Trustee as security for the Notes on any
property which the Company or any Restricted Subsidiary may desire or be
required to grant pursuant to Section 4.11, to confirm and evidence the release,
termination or discharge of any Subsidiary Guarantee or any such Lien with
respect to or securing the Notes when such release, termination or discharge is
permitted under this Indenture,
(v) to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power conferred upon the Company,
(vi) to provide for or confirm the issuance of Additional Notes in
accordance with the terms of the Indenture,
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(vii) to make any change that does not adversely affect the rights of any
Holder under the Notes or this Indenture, or
(viii) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA or otherwise.
Section 9.02. With Consent of Holders. (a) Subject to Section 6.07, the
Company, the Trustee and (if applicable) any Subsidiary Guarantor may amend or
supplement this Indenture or the Notes with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes, and any past Default or compliance with any provisions may also be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes.
(b) Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not (with respect to any Notes held by a non-
consenting Holder):
(i) change the Stated Maturity of the principal of, or any installment of
interest on, any Note,
(ii) reduce the principal amount of or premium, if any, or interest or
Liquidated Damages, if any, on any Note,
(iii) reduce any amount payable on redemption of the Notes or upon the
occurrence of an Event of Default or reduce the Change of Control Payment or the
amount to be paid in connection with an Asset Sale Offer,
(iv) change the place or currency of payment of principal of or premium, if
any, or interest or Liquidated Damages, if any, on any Note,
(v) impair the right to institute suit for the enforcement of any payment
on or after the Stated Maturity (or, in the case of a redemption, on or after
the Redemption Date) of any Note,
(vi) reduce the above-stated percentage of outstanding Notes the consent of
whose Holders is necessary to modify or amend the Indenture,
(vii) waive a default in the payment of principal of or premium, if any, or
interest or Liquidated Damages, if any, on the Notes (except as set forth in
Section 6.04),
(viii) reduce the percentage or aggregate principal amount of outstanding
Notes the consent of whose Holders is necessary for waiver of compliance with
provisions of the Indenture or for waiver of Defaults,
(ix) modify or change any provision of the Indenture affecting the ranking
of the Notes or the Subsidiary Guarantees in a manner adverse to the Holders of
the Notes, or
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(x) release any Subsidiary Guarantor from any of its obligations under its
Subsidiary Guarantee or the Indenture other than in accordance with the
provisions of the Indenture, or amend or modify any provision relating to such
release;
provided that no modification or change may be made to any provision of this
Indenture adversely affecting the rights of any holder of Senior Indebtedness
then outstanding unless the holders of such Senior Indebtedness (or their
Representative) consent to such modification or change.
(c) 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.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, 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 supplemental indenture or the effectiveness of any such amendment,
supplement or waiver.
Section 9.03. Execution of Amendments, Supplements or Waivers. The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment, supplement or waiver 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, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by the
Company and that such amendment, supplement or waiver is a valid and binding
agreement of the Company, enforceable against it in accordance with its terms
(subject to customary conditions).
Section 9.04. Revocation and Effect of Consents. (a) 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 that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 9.04, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Company received by the Trustee or the Company, as the case may be, before the
date on which the Trustee receives an Officer's Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 1.08.
(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (viii) of
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Section 9.02(b). In that case, the amendment, supplement or waiver shall bind
each Holder of a Note who has consented to it and every subsequent Holder of
such Note or any Note that evidences all or any part of the same debt as the
consenting Holder's Note.
Section 9.05. Conformity with TIA. (a) Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 9.06. Notation on or Exchange of Notes. (a) If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Company and in accordance with the specific written direction of the
Company) request the Holder to deliver its Note to the Trustee. The Trustee
shall (if required by the Company and in accordance with the specific written
direction of the Company) place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment, supplement or waiver.
ARTICLE 10
REDEMPTION OF NOTES
Section 10.01. Right of Redemption. (a) Except as set forth in this Section
10.01, the Notes will not be redeemable at the option of the Company prior to
May 1, 2004. Thereafter, the Notes will be redeemable, at the option of the
Company, in whole or in part, at any time or from time to time on and prior to
maturity. Such redemption may be made upon notice mailed by first-class mail to
each Holder's registered address in accordance with Section 10.05. The Notes
will be so redeemable at the following Redemption Prices (expressed as a
percentage of principal amount on the relevant Redemption Date), plus accrued
and unpaid interest and Liquidated Damages, if any, to the relevant Redemption
Date, if redeemed during the 12-month period commencing on May 1 of the years
set forth below:
REDEMPTION
YEAR PRICE
---- -----
2004..................... 105.438%
2005..................... 103.625%
2006..................... 101.812%
2007 and thereafter...... 100.000%
(b) Notwithstanding the foregoing, on or prior to May 1, 2002, the Company
may redeem in the aggregate up to 35% of the aggregate principal amount of the
Notes from time to time originally issued with the net cash proceeds of one or
more Public Equity Offerings, at a redemption price (expressed as a percentage
of principal amount on
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the redemption date) of 110.875% plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date; provided that (i) at least 65% of the
aggregate principal amount of the Notes from time to time originally issued
under the Indenture must remain outstanding and be held, directly or indirectly,
by Persons other than the Company and its Affiliates, immediately after each
such redemption and (ii) such redemption shall occur within 90 days of the
closing of any such Public Equity Offering.
Section 10.02. Applicability of Article. Redemption or purchase of Notes as
permitted by Section 10.01 shall be made in accordance with this Article 10.
Section 10.03. Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Company of the Notes, the Company shall, at
least 30 days prior to the Redemption Date initially fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed.
Section 10.04. Selection by Trustee of Notes to Be Redeemed. In the case of
any partial redemption, selection of the Notes for redemption will be made not
more than 60 days prior to the Redemption Date by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the applicable Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part.
(a) The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. On and
after the Redemption Date, interest and Liquidated Damages will cease to accrue
on Notes or portions thereof called for redemption.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion of
the principal of such Note that has been or is to be redeemed.
Section 10.05. Notice of Redemption. (a) Notice of redemption or purchase
as provided in Section 10.01 shall be deemed to have been given upon the mailing
by first class mail, postage prepaid, of such notice to each Holder of Notes to
be redeemed, at its registered address as recorded in the Register, not later
than 30 nor more than 60 days prior to the Redemption Date.
Any such notice shall state:
(i) the expected Redemption Date,
(ii) the Redemption Price,
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(iii) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal
amounts) of the particular Notes to be redeemed,
(iv) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note to be redeemed, and that, unless the Company default
in making such redemption payment or any Paying Agent is prohibited from making
such payment pursuant to the terms of this Indenture, interest and Liquidated
Damages thereon shall cease to accrue from and after said date,
(v) the place or places where such Notes are to be surrendered for payment
of the Redemption Price and the name and address of the Paying Agent or Paying
Agents,
(vi) the CUSIP and other security identification numbers, if any, subject
to Section 3.12 hereof, and
(vii) the section of this Indenture pursuant to which the Notes are to be
redeemed.
Notices of redemption may not be conditional.
(b) Notice of such redemption or purchase of Notes to be so redeemed or
purchased at the election of the Company shall be given by the Company or, at
the written request of the Company delivered at least five Business Days prior
to the date proposed for the mailing of such notice, by the Trustee in the name
and at the expense of the Company; provided that such notice to the Trustee may
be revoked by the Company by written notice delivered to the Trustee prior to
the date proposed for the mailing of the notice of such redemption to the
Holders.
(c) The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note.
Section 10.06. Deposit of Redemption Price. (a) On or prior to 10:00 a.m.,
New York City time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, the Company shall segregate and hold in trust as provided in Section
4.03) an amount of money sufficient to pay the Redemption Price of, and any
accrued and unpaid interest and Liquidated Damages, if any, on, all the Notes or
portions thereof which are to be redeemed on that date.
Section 10.07. Notes Payable on Redemption Date. (a) Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless Company shall default in
the payment of the Redemption
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Price or any Paying Agent is prohibited from paying the Redemption Price
pursuant to the terms of this Indenture) such Notes shall cease to bear interest
and Liquidated Damages. Upon surrender of such Notes for redemption in
accordance with such notice, such Notes shall be paid by the Company at the
Redemption Price. Installments of interest and Liquidated Damages, if any, whose
Interest Payment Date is on or prior to the Redemption Date shall be payable to
the Holders of such Notes registered as such on the relevant Regular Record
Dates according to their terms and the provisions of Section 3.07.
(b) On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and any accrued and unpaid interest and Liquidated Damages
on Notes called for redemption shall have been made available in accordance with
Section 10.06, the Notes (or the portions thereof) called for redemption will
cease to accrue interest and Liquidated Damages and the only right of the
Holders of such Notes (or portions thereof) will be to receive payment of the
Redemption Price of, and subject to the last sentence of Section 10.07(a), any
accrued and unpaid interest and Liquidated Damages, if any, on such Notes (or
portions thereof) to the Redemption Date. If any Note (or portion thereof)
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
and Liquidated Damages from the Redemption Date at the rate borne by the Note
(or portion thereof).
Section 10.08. Notes Redeemed in Part. Any Note that is to be redeemed only
in part shall be surrendered at a Place of Payment (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, 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 Note so
surrendered.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharges of Indenture. (a) This Indenture
shall cease to be of further effect (except as to any surviving rights of
transfer or exchange of Notes herein provided for), and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(i) either
(A) all Notes theretofore authenticated and delivered (other than (y)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 3.06, and (z) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or
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discharged from such trust, as provided in Section 4.03) have been delivered to
the Trustee canceled or for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee canceled or
for cancellation
(x) have become due and payable, or
(y) will become due and payable at their Stated Maturity within one year,
or
(z) are to be called for redemption within one year under arrangements
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,
(ii) the Company has irrevocably deposited or caused to be deposited with
the Trustee an amount in United States dollars, U.S. Government Obligations, or
a combination thereof, sufficient to pay and discharge the entire Indebtedness
on such Notes not theretofore delivered to the Trustee canceled or for
cancellation, for principal (and premium, if any) and interest and Liquidated
Damages to the date of such deposit (in the case of Notes that have become due
and payable), or to the Stated Maturity or Redemption Date, as the case may be;
(iii) the Company has paid or caused to be paid all other sums then payable
hereunder by the Company; and
(iv) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel each to the effect that all conditions precedent provided
for in this Section 11.01 relating to the satisfaction and discharge of this
Indenture have been complied with; provided that any such counsel may rely on
any Officer's Certificate as to matters of fact (including as to compliance with
the foregoing clauses (i), (ii) and (iii)).
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.08 and, if money shall
have been deposited with the Trustee pursuant to clause (ii) of Section
11.01(a), the obligations of the Trustee under Section 11.02, shall survive.
Section 11.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 4.03, all money deposited with the Trustee pursuant to
Section 11.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest and Liquidated Damages on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
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ARTICLE 12
DEFEASANCE AND COVENANT DEFEASANCE
Section 12.01. Option of the Company to Effect Defeasance or Covenant
Defeasance. The Company may at its option by a Board Resolution, at any time,
elect to have either Section 12.02 or Section 12.03 applied to the Outstanding
Notes upon compliance with the conditions set forth below in this Article 12.
Section 12.02. Legal Defeasance and Discharge. Upon the exercise by the
Company under Section 12.01 of the option applicable to this Section 12.02, the
Company shall be deemed to have been discharged from any and all Obligations
with respect to all Outstanding Notes (and any Subsidiary Guarantor will be
discharged from any and all Obligations in respect of its Subsidiary Guarantee)
on the date which is the 123rd day after the deposit referred to in Section
12.04(a); provided that all of the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 12.05 hereof and the
other Sections of this Indenture referred to in clauses (i) and (ii) of this
Section 12.02, and to have satisfied all its other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of Outstanding Notes to receive
solely from the trust fund described in Section 12.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages on such Notes when such payments are
due, (ii) the obligations of the Company with respect to such Notes under
Sections 1.06, 2.03, 3.03, 3.04, 3.05, 3.06, 3.13, 3.14, 4.01, 4.02, 4.03 and
12.05 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.08 hereof, and the obligations of the Company in connection therewith
and with this Article 12. Subject to compliance with this Article 12, the
Company may exercise its option under this Section 12.02 notwithstanding the
prior exercise of its option under Section 12.03 hereof with respect to the
Notes.
Section 12.03. Covenant Defeasance. Upon the exercise by the Company under
Section 12.01 of the option applicable to this Section 12.03, the Company shall
be released from its obligations under the covenants contained in Sections 4.06
through Section 4.17, Section 4.21 and clause (iv) of Section 5.01(a) hereof
with respect to the Outstanding Notes and no Default under Section 6.01(e) and
(f) shall thereafter constitute a Default or Event of Default on the date which
is the 123rd day after the deposit referred to in Section 12.04(a); provided
that all of the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not Outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed Outstanding for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the Outstanding
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by
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reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01(c) or (d), but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
Section 12.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 12.02 or Section
12.03 to the Outstanding Notes:
(a) the Company has deposited with the Trustee, in trust, money and/or
U.S. Government Obligations that through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount 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 (i) the principal of, premium, if any, and accrued interest and
Liquidated Damages, if any, on the Notes when such payments are due in
accordance with the terms of this Indenture and the Notes or (ii) in the case of
Legal Defeasance, accrued interest and Liquidated Damages, if any, on the Notes
through a scheduled redemption date and the principal of, and premium on the
Notes on such redemption date; provided that, at the time of deposit, the
Company irrevocably authorize the Trustee to issue a timely notice of redemption
and to take such other steps reasonably requested by the Trustee to ensure that
such redemption will be effectuated;
(b) in the case of an election under Section 12.02, the Company has
delivered to the Trustee (i) either (x) an Opinion of Counsel to the effect that
Holders will not recognize income, gain or loss for Federal income tax purposes
as a result of the exercise by the Company of its option under this Article 12
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, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the Internal Revenue
Service to the same effect unless there has been a change in applicable Federal
income tax law after the date of this Indenture such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the Internal
Revenue Service to the same effect as the aforementioned Opinion of Counsel and
(ii) an Opinion of Counsel to the effect that, as a result of the creation of
the defeasance trust, the Company will not be required to register under the
Investment Company Act of 1940 and after the passage of 123 days following the
deposit, the trust fund will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law or any comparable provision of applicable law;
(c) in the case of an election under Section 12.03, the delivery by the
Company to the Trustee of (i) an Opinion of Counsel to the effect that, among
other things, the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance 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 and defeasance had
not occurred and (ii) an Opinion of Counsel to the effect that, as a result of
the creation of the defeasance trust, the Company will not be required to
register under the Investment Company Act of 1940 and after the passage of 123
days
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following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law or any comparable provision of applicable law;
(d) immediately after giving effect to such deposit on a pro forma basis,
no Event of Default, or event that after the giving of notice or lapse of time
or both would become an Event of Default, shall have occurred and be continuing
on the date of such deposit or during the period ending on the 123rd day after
the date of such deposit, and such deposit shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound;
(e) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge;
(f) the Company shall have delivered to the Trustee Officer's Certificates
stating that the deposit made by the Company pursuant to its election under
Sections 12.02 or 12.03 was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company with the intent
of defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) the Company shall have delivered to the Trustee Officer's Certificates
and an Opinion of Counsel, each stating that all conditions precedent provided
for relating to either the Legal Defeasance under Section 12.02 or the Covenant
Defeasance under Section 12.03 (as the case may be) have been complied with as
contemplated by this Section 12.04.
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 12.06, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 12.04 in respect of the Outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal of, premium, if any, and interest and Liquidated
Damages, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 12.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article 12 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 12.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants
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expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 12.04(a) hereof), are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 12.06. Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest and Liquidated Damages on any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest and Liquidated Damages has become due and payable shall be paid
to the Company on its written request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 12.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 12.02
or 12.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 12.02 or 12.03 until such time as the Trustee or Paying Agent is
permitted to apply all such amounts in accordance with Section 12.02 or 12.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest and Liquidated Damages on
any Note following the reinstatement of its Obligations, the Company shall be
subrogated to the rights of the Holder of such Note to receive such payment from
the amounts held by the Trustee or Paying Agent.
ARTICLE 13
SUBSIDIARY GUARANTEES
Section 13.01. The Guarantees. (a) Subject to the provisions of this
Article 13, each Subsidiary Guarantor hereby irrevocably and unconditionally
guarantees, jointly and severally, on an unsecured senior subordinated basis,
the full and punctual payment (whether at Stated Maturity, upon acceleration,
optional redemption, upon repurchase following a Change of Control Offer or an
Asset Sale Offer or otherwise) of the principal of and premium, if any, and
interest and Liquidated Damages, if any, on, and all other amounts payable
under, each Note provided for under this Indenture, and the full and punctual
payment of all other amounts payable by the Company under this Indenture. Upon
failure by the Company to pay punctually any such amount, each Subsidiary
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Guarantor shall forthwith on demand pay the amount not so paid at the place and
in the manner specified in this Indenture.
Section 13.02. Guarantee Unconditional. The obligations of the Subsidiary
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall, to the fullest extent permitted by law,
not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Company under this Indenture or any Note, by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this Indenture or
any Note; provided that any such modification which increases the obligations of
each Subsidiary Guarantor hereunder shall not be effective as to such Subsidiary
Guarantor without its consent;
(c) any change in the corporate existence, structure or ownership of the
Company, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Company or its assets or any resulting release or
discharge of any obligation of the Company contained in this Indenture or any
Note;
(d) the existence of any claim, set-off or other rights which the
Subsidiary Guarantors may have at any time against the Company, the Trustee or
any other Person, whether in connection with this Indenture or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(e) any invalidity or unenforceability relating to or against the Company
for any reason of this Indenture or any Note, or any provision of applicable law
or regulation purporting to prohibit the payment by the Company of the principal
of or interest and Liquidated Damages on any Note or any other amount payable by
the Company under this Indenture; or
(f) any other act or omission to act or delay of any kind by the Company,
the Trustee or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of or defense to such Subsidiary Guarantor's obligations hereunder.
Section 13.03. Discharge; Reinstatement. The Subsidiary Guarantors'
obligations hereunder shall remain in full force and effect until the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
and all other amounts payable by the Company under this Indenture shall have
been paid in full. If at any time any payment of the principal of, premium, if
any, or interest and Liquidated Damages, if any, on any Note or any other amount
payable by the Company under this Indenture is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Subsidiary Guarantors' obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
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Section 13.04. Waiver by the Subsidiary Guarantors. The Subsidiary
Guarantors irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against the Company or any other Person.
Section 13.05. Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Company under this Article 13, the Subsidiary
Guarantor making such payment shall be subrogated to the rights of the payee
against the Company with respect to such obligation; provided that such
Subsidiary Guarantor shall not enforce either (i) any right to receive payment
by way of subrogation against the Company or against any direct or indirect
security for such obligation, or any other right to be reimbursed, indemnified
or exonerated by or for the account of the Company in respect thereof or (ii)
any right to receive payment, in the nature of contribution or for any other
reason, from any other Subsidiary Guarantor with respect to such payment, in
each case so long as any amount payable by the Company hereunder or under the
Notes remains unpaid.
Section 13.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Company under this Indenture or the Notes
is stayed upon the insolvency, bankruptcy or reorganization of the Company, all
such amounts otherwise subject to acceleration under the terms of this Indenture
shall nonetheless be payable by the Subsidiary Guarantors hereunder forthwith on
demand by the Trustee or the Holders.
Section 13.07. Subordination. Each Subsidiary Guarantor's Obligations under
its Subsidiary Guarantee shall be junior and subordinated in right of payment to
any Senior Indebtedness of such Subsidiary Guarantor in the same manner and to
the same extent as the Notes are subordinated to Senior Indebtedness of the
Company pursuant to Article 14.
Section 13.08. Limits of Guarantees. Notwithstanding anything to the
contrary in this Article 13, each Subsidiary Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance provisions of the United
States Bankruptcy Code or any comparable provision of state law. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee and this Article 13 shall be limited to the maximum
amount that would not render such Subsidiary Guarantor's obligations subject to
avoidance under applicable fraudulent conveyance provisions of the United States
Bankruptcy Code or any comparable provision of state law.
Section 13.09. Execution and Delivery of Note Guarantee. To evidence its
Subsidiary Guarantee set forth in Section 13.01, each Subsidiary Guarantor
hereby agrees that this Indenture (or a supplemental indenture in the form of
Exhibit B hereto) shall be executed on behalf of such Subsidiary Guarantor by
one of its Officers.
The signature of an Officer of a Subsidiary Guarantor on the Indenture
shall bind such Subsidiary Guarantor, notwithstanding that such individual has
ceased to hold such
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office prior to the authentication and delivery of any Note or did not hold such
office at the date of such Note.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
ARTICLE 14
SUBORDINATION
Section 14.01. Agreement to Subordinate. The Company and the Subsidiary
Guarantors agree, and each Holder by accepting a Note agrees, any provision of
this Indenture or the Note to the contrary notwithstanding, that all obligations
owed under and in respect of the Notes and the Subsidiary Guarantees are
subordinated in right of payment, to the extent and in the manner provided in
this Article 14, to the prior payment in full of all Senior Indebtedness of the
Company and the Subsidiary Guarantors, and that the subordination of the Notes
and the Subsidiary Guarantees pursuant to this Article 14 is for the benefit of
all holders of all Senior Indebtedness of the Company and Subsidiary Guarantors
whether outstanding on the Issue Date or incurred thereafter.
Section 14.02. Liquidation; Dissolution; Bankruptcy. Upon any distribution
to creditors of the Company or any Subsidiary Guarantor in a liquidation or
dissolution of the Company or such Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or any Subsidiary Gurantor or its property, an assignment for the
benefit of creditors or any marshalling of the Company's or a Subsidiary
Guarantor's assets and liabilities, the holders of Senior Indebtedness will be
entitled to receive payment in full in cash or cash equivalents of all
Obligations due in respect of such Senior Indebtedness (including interest after
the commencement of any such proceeding at the rate specified in the applicable
Senior Indebtedness) before the Holders of the Notes will be entitled to receive
any payment with respect to the Subordinated Note Obligations, and until all
Obligations with respect to Senior Indebtedness are paid in full in cash or cash
equivalents, any distribution to which the Holders of the Notes would be
entitled shall be made to the holders of Senior Indebtedness (except that
Holders of Senior Subordinated Notes may receive and retain Permitted Junior
Securities and payments made from the trust described in Section 12.04(a)).
Section 14.03. Default on Designated Senior Indebtedness. (a) The
Companyand the Subsidiary Guarantors also may not make any payment upon or in
respect of the Subordinated Note Obligations (except in Permitted Junior
Securities or from the trust described in Section 12.04(a)) if (i) a default in
the payment of the principal of, or premium, if any, or interest on, or
commitment fees relating to, Designated Senior Indebtedness occurs and is
continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness that
permits holders of the Designated Senior Indebtedness as to which such default
relates to accelerate its maturity and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from the Company or the holders of any
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Designated Senior Indebtedness. Payments on the Notes may and shall be resumed
(including the payment of any amounts previously blocked by such Payment
Blockage Notice) (x) in the case of a payment default, upon the date on which
such default is cured or waived and (y) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Indebtedness has been accelerated.
No new period of payment blockage may be commenced unless and until 360 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default shall have
been waived or cured for a period of not less than 90 days.
To the extent any payment of Senior Indebtedness (whether by or on behalf
of the Company or the Subsidiary Guarantors, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
if such payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred. To the
extent the obligation to repay any Senior Indebtedness is declared to be
fraudulent, invalid, or otherwise set aside under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then the obligation so
declared fraudulent, invalid or otherwise set aside (and all other amounts that
would come due with respect thereto had such obligation not been so affected)
shall be deemed to be reinstated and outstanding as Senior Indebtedness for all
purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(b) Notwithstanding anything to the contrary in Section 14.02 or this
Section 14.03, Holders may continue to receive payments from any trust
established pursuant to Section 12.04 prior to occurrence of an event
prohibiting payment of or on the Notes.
Section 14.04. When Distributions Must Be Paid Over. If the Company or any
Subsidiary Guarantor shall make any payment to the Trustee on account of the
principal of, or premium, if any, or interest and Liquidated Damages, if any,
on, the Notes, or the Holders shall receive from any source any payment on
account of the principal of, premium, if any, or interest and Liquidated
Damages, if any, on, the Notes or any obligation in respect of the Notes, at a
time when such payment is prohibited by this Article 14, the Trustee or such
Holders shall hold such payment in trust for the benefit of, and shall pay over
and deliver to, the holders of the Senior Indebtedness of the Company or such
Subsidiary Guarantor (pro rata as to each of such holders on the basis of the
respective amounts of such Senior Indebtedness held by them) or their
Representative, as their respective interests may appear, for application to the
payment of all outstanding Senior Indebtedness of such Company or Subsidiary
Guarantor until all such Senior Indebtedness has been paid in full, after giving
effect to all other payments or distributions to, or provisions made for, the
holders of Senior Indebtedness of such Company or Subsidiary Guarantor.
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With respect to the holders of Senior Indebtedness of the Company and
Subsidiary Guarantors, the Trustee undertakes to perform only such obligations
on its part as are specifically set forth in this Article 14, and no implied
covenants or obligations with respect to any holders of the Senior Indebtedness
of the Company and the Subsidiary Guarantors shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of the Senior Indebtedness of the Company and the Subsidiary
Guarantors, and shall not be liable to any holders of such Senior Indebtedness
if the Trustee shall pay over or distribute to, or on behalf of, Holders, the
Company, Subsidiary Guarantors or any other Person, money or assets to which any
holders of such Senior Indebtedness are entitled pursuant to this Article 14,
except if such payment is made at a time when a Responsible Officer has actual
knowledge that the terms of this Article 14 prohibit such payment.
Section 14.05. Notice. Neither the Trustee nor the Paying Agent shall at
any time be charged with the knowledge of the existence of any facts that would
prohibit the making of any payment to or by the Trustee or Paying Agent under
this Article 14 unless and until the Trustee or Paying Agent shall have received
written notice thereof from the Company, a Subsidiary Guarantor or one or more
holders of the Senior Indebtedness of the Company or Subsidiary Guarantor or a
representative of any holders of such Senior Indebtedness; and, prior to the
receipt of any such written notice, the Trustee or Paying Agent shall be
entitled to assume conclusively that no such facts exist; provided that if a
Responsible Officer of the Trustee shall not have received the notice provided
for in this Section 14.05 at least one Business Day prior to the date such
payment is due pursuant to the terms hereof, then, notwithstanding anything
herein to the contrary, the Trustee shall have full power and authority to make
such payment and shall not be affected by any notice to the contrary which may
be received by it within one Business Day prior to such date (it being
understood that nothing contained in this Section 14.05 shall limit the rights
of the holders of the Senior Indebtedness of the Company and the Subsidiary
Guarantors to recover any payment pursuant to Section 14.04). The Trustee shall
be entitled to rely on the delivery to it of written notice by a Person
representing itself to be a holder of the Senior Indebtedness of the Company or
a Subsidiary Guarantor (or a Representative thereof) to establish that such
notice has been given. 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 of the Company or any Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of such 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, and if such evidence is not furnished, the Trustee may defer any
payment which it may be required to make for the benefit of such person pursuant
to the terms of this Indenture pending judicial determination as to the rights
of such person to receive such payment.
The Company and the Subsidiary Guarantors shall promptly notify the Trustee
and the Paying Agent in writing of any facts they know that would cause a
payment of principal of, premium, if any, or interest and Liquidated Damages, if
any, on, the Notes or any other obligation in respect of the Notes to violate
this Article 14, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Indebtedness of
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the Company and the Subsidiary Guarantors provided in this Article 14 or the
rights of holders of such Senior Indebtedness under this Article 14.
Section 14.06. Subrogation. After all Senior Indebtedness of the Company
and the Subsidiary Guarantors has been paid in full and until the Notes are paid
in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness to
the extent that distributions otherwise payable to the Holders have been applied
to the payment of such Senior Indebtedness. A distribution made under this
Article 14 to holders of the Senior Indebtedness of the Company and the
Subsidiary Guarantors that otherwise would have been made to Holders is not, as
between the Company or the relevant Subsidiary Guarantor and the Holders, a
payment by the Company or such relevant Subsidiary Guarantor on its Senior
Indebtedness.
Section 14.07. Relative Rights. This Article 14 defines the relative rights
of Holders and holders of the Senior Indebtedness of the Company and the
Subsidiary Guarantors. Nothing in this Indenture shall: (1) impair, as between
the Company and the Subsidiary Guarantors and Holders, the obligations of the
Company and the Subsidiary Guarantors, which are absolute and unconditional, to
pay principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes in accordance with their terms; (2) affect the relative rights of
Holders and the creditors of the relevant Company or Subsidiary Guarantor other
than their rights in relation to holders of the Senior Indebtedness of the
relevant Company or Subsidiary Guarantor; or (3) prevent the Trustee or any
Holder from exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders of the Senior Indebtedness to receive
distributions and payments otherwise payable to Holders.
The failure to make a payment on account of principal of or interest and
Liquidated Damages, if any, on the Notes by reason of any provision of this
Article 14 shall not be construed as preventing the occurrence of an Event of
Default under Section 6.01.
Section 14.08. The Company, Subsidiary Guarantors and Holders May Not
Impair Subordination. (a) No right of any holder of the Senior Indebtedness of
the Company or any Subsidiary Guarantor to enforce the subordination as provided
in this Article 14 shall at any time or in any way be prejudiced or impaired by
any act or failure to act by the Company or the relevant Subsidiary Guarantor or
by any noncompliance by the Company or the relevant Subsidiary Guarantor with
the terms, provisions and covenants of this Indenture or the Notes or any other
agreement regardless of any knowledge thereof with which any such holder may
have or be otherwise charged.
(b) Without in any way limiting Section 14.08(a), the holders of any
Senior Indebtedness of the Company or a Subsidiary Guarantor may, at any time
and from time to time to the extent not otherwise prohibited by this Indenture,
without the consent of or notice to any Holders, without incurring any
liabilities to any Holder and without impairing or releasing the subordination
and other benefits provided in this Indenture or the Holders' obligations to the
holders of such Senior Indebtedness, even if any Holder's right of reimbursement
or subrogation or other right or remedy is affected, impaired or
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extinguished thereby, do any one or more of the following: (i) amend, renew,
exchange, extend, modify, increase or supplement in any manner such Senior
Indebtedness or any instrument evidencing or guaranteeing or securing such
Senior Indebtedness or any agreement under which such Senior Indebtedness is
outstanding (including, but not limited to, changing the manner, place or terms
of payment or changing or extending the time of payment of, or renewing,
exchanging, amending, increasing or altering, (A) the terms of such Senior
Indebtedness, (B) any security for, or any Guarantee of, such Senior
Indebtedness, (C) any liability of any obligor on such Senior Indebtedness
(including any guarantor) or any liability incurred in respect of such Senior
Indebtedness); (ii) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing such Senior Indebtedness or any liability of any
obligor thereon, to such holder, or any liability incurred in respect thereof;
(ii) settle or compromise any such Senior Indebtedness or any other liability of
any obligor of such Senior Indebtedness to such holder or any security therefor
or any liability incurred in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including, without limitation,
payment of any of the Senior Indebtedness of the Company and Subsidiary
Guarantors) in any manner or order; and (iv) fail to take or to record or
otherwise perfect, for any reason or for no reason, any lien or security
interest securing such Senior Indebtedness by whomsoever granted, exercise or
delay in or refrain from exercising any right or remedy against any obligor or
any guarantor or any other Person, elect any remedy and otherwise deal freely
with any obligor and any security for such Senior Indebtedness or any liability
of any obligor to the holders of such Senior Indebtedness or any liability
incurred in respect of such Senior Indebtedness.
(c) Each Holder by accepting a Note agrees not to compromise, release,
forgive or otherwise discharge the obligations with respect to such Holder's
Note unless holders of a majority of the outstanding amount of each class of
Senior Indebtedness of the Company and Subsidiary Guarantors consent to such
compromise, release, forgiveness or discharge.
Section 14.09. Distribution or Notice to Representative. Whenever a
distribution is to be made, or a notice given, to holders of Senior Indebtedness
of the Company or a Subsidiary Guarantor, the distribution may be made and the
notice given to their Representative, if any. If any payment or distribution of
the assets of the Company or a Subsidiary Guarantor is required to be made to
holders of any of the Senior Indebtedness of the Company or such Subsidiary
Guarantor pursuant to this Article 14, the Trustee and the Holders shall be
entitled to rely upon any order or decree of any court of competent
jurisdiction, or upon any certificate of a representative of such Senior
Indebtedness or a custodian, in ascertaining the holders of such Senior
Indebtedness entitled to participate in any such payment or distribution, the
amount to be paid or distributed to holders of such Senior Indebtedness and all
other facts pertinent to such payment or distribution or to this Article 14.
Section 14.10. Rights of Trustee and Paying Agent. The Trustee or Paying
Agent may continue to make payments on the Notes unless prior to any payment
date it has received written notice of facts that would cause a payment of
principal of, or premium, if any, or interest and Liquidated Damages, if any,
on, the Notes to violate this Article 14. Only the Company, Subsidiary
Guarantors, a Representative of Senior
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Indebtedness of the Company or a Subsidiary Guarantor, or a holder of Senior
Indebtedness of the Company or a Subsidiary Guarantor that has no Representative
may give such notice.
To the extent permitted by the TIA, the Trustee in its individual or any
other capacity may hold Indebtedness of the Company and Subsidiary Guarantors
(including Senior Indebtedness) with the same rights it would have if it were
not Trustee. Any agent of the Trustee may do the same with like rights.
Nothing in this Article 14 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.08.
Section 14.11. Authorization to Effect Subordination. Each Holder by its
acceptance thereof authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 14, and appoints the Trustee as such Holder's attorney-
in-fact for any and all such purposes (including, without limitation, the timely
filing of a claim for the unpaid balance of the Note that such Holder holds in
the form required in any insolvency or liquidation proceeding and causing such
claim to be approved).
If a proper claim or proof of debt in the form required in such proceeding
is not filed by or on behalf of all Holders prior to 30 days before the
expiration of the time to file such claims or proofs, then the holders or a
Representative of any Senior Indebtedness of the Company or any Subsidiary
Guarantor is hereby authorized, and shall have the right (without any duty), to
file an appropriate claim for and on behalf of the Holders.
Section 14.12. Payment. A payment on account of or with respect to any Note
shall include, without limitation, principal, premium, interest or Liquidated
Damages with respect to or in connection with any optional redemption or
purchase provisions, any direct or indirect payment payable by reason of any
other Indebtedness or obligation being subordinated to the Notes, and any direct
or indirect payment or recovery on any claim as a Holder relating to or arising
out of this Indenture or any Note, or the issuance of any Note, or the
transactions contemplated by this Indenture or referred to herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
LYONDELL CHEMICAL COMPANY
By: __________________________________
Name:
Title:
LYONDELL CHEMICAL WORLDWIDE, INC., as a Subsidiary Guarantor
By: __________________________________
Name:
Title:
LYONDELL CHEMICAL NEDERLAND, LTD., as a Subsidiary Guarantor
By: __________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: __________________________________
Name:
Title:
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EXHIBIT A
[FORM OF NOTE]
LYONDELL CHEMICAL COMPANY.
10 7/8% Senior Subordinated Note due 2009
No.________ CUSIP No. __________
$ __________
LYONDELL CHEMICAL COMPANY, a Delaware corporation (the "Company", which
term includes any successor Persons under the Indenture hereinafter referred
to), for value received promises to pay to ___________, or its registered
assigns, the principal sum of __________________________________ Dollars
($___________) [or such other amount as indicated on the Schedule of Exchange of
Physical Securities attached hereto]/1/, on May 1, 2009.
Interest Rate: 10 7/8% per annum.
Interest Payment Dates: May 1 and November 1of each year
commencing November 1, 1999.
Regular Record Dates: April 15 and November 15 of each year.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
- -------------------------
/1/ To be included in any Global Note
A-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.
LYONDELL CHEMICAL COMPANY
By:_________________________________
Name:
Title:
A-2
<PAGE>
(Form of Trustee's Certificate of Authentication)
This is one of the 10 7/8% Senior Subordinated Notes due 2009 referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: ______________ By:_______________________________
Authorized Signatory
A-3
<PAGE>
[REVERSE SIDE OF NOTE]
LYONDELL CHEMICAL COMPANY
10 7/8 Senior Subordinated Note due 2009
(1) Principal and Interest; Subordination. The Company agrees to pay the
principal of this Note on May 1, 2009.
The Company agrees to pay interest on the principal amount of this Note on
each Interest Payment Date, as set forth below, at the rate of 10 7/8% per
annum.
Interest will be payable semi-annually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the Regular Record
Date immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing November 1, 1999.
[The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated May 17, 1999, among the Company, the Subsidiary
Guarantors party thereto and the Initial Purchasers named therein (the
"Registration Rights Agreement"). In the event that (i) the Company or the
Subsidiary Guarantors fail to file an Exchange Offer Registration Statement with
the SEC on or prior to the 90th day after the Issue Date, (ii) if the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 210th day after the Issue Date, (iii) if the Exchange Offer is not
consummated on or before the 30th business day after the Exchange Offer
Registration Statement is declared effective, (iv) the Company and the
Subsidiary Guarantors are obligated to file the Shelf Registration Statement and
fail to file the Shelf Registration Statement with the SEC on or prior to the
30th day after such filing obligation arises, (v) the Company and the Subsidiary
Guarantors are obligated to file a Shelf Registration Statement and the Shelf
Registration Statement is not declared effective on or prior to the 60th day
after the obligation to file a Shelf Registration Statement arises, or (vi) if
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is declared effective but thereafter ceases to be effective
or useable in connection with resales of the Notes during the periods specified
in the Registration Rights Agreement, for such time of non-effectiveness or non-
usability (each, a "Registration Default"), the Company and the Subsidiary
Guarantors agree to pay to the Holder of this Note, if affected thereby,
liquidated damages ("Liquidated Damages") in an amount equal to $0.05 per week
per $1,000 in principal amount of this Note for each week or portion thereof
that the Registration Default continues for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of the
Liquidated Damages shall increase by an additional $0.05 per week per $1,000 in
principal amount of Notes with respect to each subsequent 90 day period until
all Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.50 per week per $1,000 in principal amount of Notes. The Company
and the Subsidiary Guarantors shall not be required to pay Liquidated Damages
for more than one
A-4
<PAGE>
Registration Default at any given time. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.]./2/
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]/1/ or, if no interest has been paid, from May 17, 1999; provided that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Regular Record Date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest and Liquidated Damages, to the
extent lawful, at a rate per annum equal to 1% per annum in excess of the rate
of interest applicable to the Notes.
The indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Trustee its attorney-in-fact for such purpose.
(2) Method of Payment. The Company will pay interest (except defaulted
interest) on the principal amount of the Notes on each May 1 and November 1 to
the Persons who are Holders (as reflected in the Register at the close of
business on the April 15 and October 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is canceled on registration of
transfer or registration of exchange after such Regular Record Date; provided
that, with respect to the payment of principal, the Company will make payment to
the Holder that surrenders this Note to any Paying Agent on or after May 1,
2009.
The Company will pay principal, premium, if any, and interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments
(including principal, premium, if any, and interest and Liquidated Damages, if
any) in respect of the Notes represented by the Global Notes, the Holders of
which have given wire transfer instructions on or prior to the relevant record
date, shall be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Physical Notes,
the Company will make all payments of principal, premium, if any, and interest
and Liquidated Damages, if any, at the office or agency maintained by the
Company for such purposes in The City of New York or, at the Company's option,
by mailing a check to each such Holder's registered address. If a payment date
is a date other than a Business Day, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
________________________
/2/ Include only for Initial Note.
A-5
<PAGE>
(3) Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar upon
written notice thereto. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-registrar.
(4) Indenture; Limitations. The Company issued the Notes under an
Indenture dated as of May 17, 1999 (the "Indenture"), among the Company, the
Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee").
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(the "TIA"). The Notes are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.
The Notes are unsecured senior subordinated obligations of the Company. The
Indenture limits the initial aggregate principal amount of the Notes to
$500,000,000 but permits the issuance of Additional Notes in an unlimited amount
subject to compliance with the covenants contained in the Indenture and except
as may be limited by applicable law.
(5) Optional Redemption. The Notes may be redeemed at the option of the
Company, in whole or in part, at any time and from time to time, on or after May
1, 2004, at the following Redemption Prices (expressed in percentages of
principal amount on the relevant Redemption Date), plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date, if redeemed
during the 12-month period commencing May 1 of each of the years set forth
below:
YEAR REDEMPTION PRICE
2004......................... 105.438%
2005......................... 103.625%
2006......................... 101.812%
2007 and thereafter.......... 100.0000%
Notwithstanding the foregoing, at any time prior to May 1, 2002, the Company
may redeem up to 35% of the original principal amount of the Notes, with the
proceeds of one or more Public Equity Offerings, at the redemption price
(expressed in percentages of principal amount on the relevant Redemption Date)
of 110.875% plus accrued and unpaid interest and Liquidated Damages, if any, to
the Redemption Date; provided, however, that (i) at least 65% of the aggregate
principal amount of the Notes from time to time originally issued under the
Indenture remains Outstanding and is held, directly or indirectly, by Persons
other than the Company and its Affiliates and (ii) such redemption shall occur
within 90 days of the applicable Public Equity Offering.
A-6
<PAGE>
If less than all the Notes are to be redeemed at any time, selection of Notes
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided that no
Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest and
Liquidated Damages, if any, cease to accrue on Notes or portions of them called
for redemption.
(6) Repurchase upon a Change in Control and Sale of Assets. Upon the
occurrence of (a) a Change in Control, each Holder shall have the right to
require that the Company repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase and (b) an Asset Sale, the Company may be obligated to make an offer to
purchase on a pro rata basis from the Holders the Notes with the Excess Proceeds
of such Asset Sales at a purchase price equal to 100% of the principal amount of
such Notes plus accrued interest and Liquidated Damages, if any, to the date of
purchase.
(7) Denominations; Transfer; Exchange. The Notes are in fully registered
form without coupons, in denominations of $1,000 and any integral multiples of
$1,000. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture.
(8) Persons Deemed Owners. A Holder may be treated as the owner of a Note
for all purposes.
(9) Unclaimed Money. If money for the payment of principal, premium, if any,
or interest and Liquidated Damages, if any, remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the Company at its
written request. After that, Holders entitled to the money must look to the
Company for payment, unless an abandoned property law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
(10) Discharge Prior to Redemption or Maturity. If the Company irrevocably
deposits, or causes to be deposited, with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of and premium, if
any, and accrued interest and Liquidated Damages on the Notes (a) to redemption
or maturity, the Company will be discharged from the Indenture and the Notes,
except in certain
A-7
<PAGE>
circumstances for certain sections thereof, and (b) to redemption or maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
Outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend the Indenture or the Notes to the extent
set forth in the Indenture.
(12) Restrictive Covenants. The Indenture contains certain covenants,
including, without limitation, covenants with respect to the following matters:
(i) Indebtedness; (ii) Restricted Payments; (iii) distributions from Restricted
Subsidiaries and Joint Ventures; (iv) sales of assets; (v) transactions with
Affiliates; (vi) Liens; (vii) Senior Subordinated Indebtedness; (viii)
repurchase of Notes upon a Change in Control; (ix) Sale and Leaseback
Transactions; (x) Subsidiary Guarantees; and (xi) consolidation, merger and sale
of assets. Within 120 days after the end of each fiscal year, the Company must
report to the Trustee on compliance with such limitations.
(13) Successor Persons. When a successor person or other entity (other than a
Subsidiary of the Company) assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor person will be released from those
obligations.
(14) Remedies for Events of Default. If an Event of Default (other than an
Event of Default specified in Section 6.01(g) or (h) of the Indenture that
occurs with respect to the Company or a Subsidiary Guarantor) occurs and is
continuing under this Indenture, then in every such case the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Notes,
by written notice to the Company (and to the Trustee if such notice is given by
the Holders), may, and the Trustee at the written request of such Holders shall,
declare the principal of, premium, if any, and accrued interest and Liquidated
Damages, if any, on all of the Outstanding Notes to be immediately due and
payable. Upon a declaration of acceleration, such principal of, premium, if
any, and accrued interest and Liquidated Damages, if any, shall be immediately
due and payable. If an Event of Default specified in Section 6.01(g) or (h) of
the Indenture occurs with respect to the Company or a Subsidiary Guarantor, the
principal of, premium, if any, and accrued interest and Liquidated Damages, if
any, on the Outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of at least a majority in aggregate principal amount of the
Outstanding Notes by written notice to the Company and to the Trustee, may waive
all past defaults and rescind and annul a declaration of acceleration and its
consequences if (1) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (2) the recission would not conflict with any
judgment or decree of a court of competent jurisdiction.
Holders may not enforce the Indenture, the Notes or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee may require security or
indemnity
A-8
<PAGE>
satisfactory to it before it enforces the Indenture, the Notes or the Subsidiary
Guarantees. The Holders of at least a majority in aggregate principal amount of
the Notes then Outstanding may direct the Trustee in the exercise of any trust
or power in accordance with the terms of the Indenture.
(15) Subsidiary Guarantees. Each Subsidiary Guarantor irrevocably and
unconditionally guarantees jointly and severally, on an unsecured senior
subordinated basis, the full and punctual payment (whether at Stated Maturity,
upon acceleration, optional redemption, upon repurchase following a Change of
Control Offer or an Asset Sale Offer or otherwise) of the principal of, premium,
if any, and interest and Liquidated Damages, if any, on, and all other amounts
payable under, this Note provided for under this Indenture, and the full and
punctual payment of all other amounts payable by the Company under the
Indenture; provided that, notwithstanding anything to the contrary herein, the
aggregate amount of the Obligations guaranteed under the Indenture by any
Subsidiary Guarantor shall be limited in amount to the maximum amount that would
not render such Subsidiary Guarantor's obligations subject to avoidance under
the applicable fraudulent conveyance provisions of the United States Bankruptcy
Code or any comparable provision of any applicable state law.
Each Subsidiary Guarantor's obligations under its Subsidiary Guarantee shall
be subordinated in right of payment to all Senior Indebtedness of such
Subsidiary Guarantor to the extent and in the manner provided in the Indenture.
Each Holder of this Note, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee its
attorney-in-fact for such purpose.
(16) Additional Subsidiary Guarantees. If any of the Company's Restricted
Subsidiaries shall Guarantee or secure the payment of any other Indebtedness of
the Company or any of its Restricted Subsidiaries, then, subject to certain
exceptions specified in the Indenture, such Restricted Subsidiary shall become a
Subsidiary Guarantor by executing a supplemental indenture.
(17) Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may make loans to, accept deposits from, perform services for, and otherwise
deal with, the Company and its Affiliates as if it were not the Trustee.
(18) Authentication. This Note shall not be valid until the Trustee signs the
certificate of authentication on this Note.
(19) Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A
(= Uniform Gifts to Minors Act).
(20) Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to any principles
A-9
<PAGE>
of conflict of laws to the extent that the application of the law of another
jurisdiction is required thereby.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to the Company, One
Houston Center, Suite 700, 1221 McKinney, Houston, Texas 77010; Attention:
General Counsel.
A-10
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No.
____________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
____________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
____________________________________________________________
attorney to transfer such Note on the books of the Company with full power
of substitution in the premises.
A-11
<PAGE>
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES BEARING A PRIVATE PLACEMENT LEGEND]
In connection with any transfer of this Note occurring prior to
______________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
Check One
(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder. [ ]
(b) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144
thereunder. [ ]
(c) this Note is being transferred to the Company. [ ]
or
(d) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of transfer
set forth in this Note and the Indenture. [ ]
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Sections 3.13 and 3.14 of the Indenture
shall have been satisfied.
Date:____________________
____________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee: _______________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-12
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________
______________________________________
To be executed by an executive officer
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.09 or Section 4.13 of the Indenture, check the box: [ ]
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.09 or Section 4.13 of the Indenture, state the amount (in original
principal amount) below:
$_____________________.
Date:_________________
Your Signature:__________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-14
<PAGE>
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges of a part of this Global Note for Physical Notes or a
part of another Global Note have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Principal amount of
this Global Note
Amount of decrease Amount of increase following such Signature of
in principal amount in principal amount decrease (or authorized officer of
Date of Exchange of this Global Note of this Global Note increase) Trustee
</TABLE>
A-15
<PAGE>
EXHIBIT B
SUPPLEMENTAL INDENTURE
dated as of __________, ____
among
LYONDELL CHEMICAL COMPANY,
as Company
[SUBSIDIARY GUARANTORS]
and
THE BANK OF NEW YORK,
as Trustee
----------------
10 7/8% Senior Subordinated Notes due 2009
<PAGE>
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into as
of __________, ____, among LYONDELL CHEMICAL COMPANY., a Delaware corporation
(the "Company") [insert each Subsidiary Guarantor executing this Supplemental
Indenture and its jurisdiction of incorporation] (each an "Undersigned") and THE
BANK OF NEW YORK, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company, the Subsidiary Guarantors party thereto and the Trustee
entered into the Indenture, dated as of May 17, 1999 (the "Indenture"), relating
to the Company's 10 7/8% Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Company agreed, subject to certain
exceptions, pursuant to Section 4.21 of the Indenture to cause any Restricted
Subsidiary that has guaranteed or secured Indebtedness of the Company or any of
its Restricted Subsidiaries to provide Subsidiary Guarantees.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and intending to be legally bound, the parties hereto hereby agree as
follows:
Section 1. Capitalized terms used herein and not otherwise defined herein are
used as defined in the Indenture.
Section 2. Each Undersigned, by its execution of this Supplemental Indenture,
agrees to be a Subsidiary Guarantor under the Indenture and to be bound by the
terms of the Indenture applicable to Subsidiary Guarantors, including, but not
limited to, Article 13 thereof.
Section 3. This Supplemental Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York.
Section 4. This Supplemental Indenture may be signed in various counterparts
which together shall constitute one and the same instrument.
Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and said Indenture and this Supplemental Indenture shall henceforth be
read together.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto duly
authorized, as of the day and year first above written.
LYONDELL CHEMICAL COMPANY
B-2
<PAGE>
By: ___________________________________
Name:
Title:
[SUBSIDIARY GUARANTORS]
THE BANK OF NEW YORK,
as Trustee
By: ___________________________________
Name:
Title:
B-3
<PAGE>
CROSS-REFERENCE TARGET LIST
===========================
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(THIS LIST IS FOR THE USE OF THE WORDPROCESSOR ONLY, IS NOT A PART OF THIS
DOCUMENT AND MAY BE DISCARDED.)
<TABLE>
<CAPTION>
ARTICLE/SECTION TARGET NAME
===========================
<S> <C>
1.................. definitions.prov
1.01............... definitions
1.02............... definitions.other
1.03............... construction.rules
1.04............... reference.tia
1.05............... conflict.tia
1.06............... compliance
1.07............... form.docs
1.08............... acts
1.08(b)............ fact and date
1.08(e)............ may set any date
1.09............... notices.trustee
1.10............... notices.holders
1.11............... toc
1.12............... successors.assigns
1.13............... separability.clause
1.14............... benefits.indenture
1.15............... governing.law
1.16............... legal.holidays
1.17............... personal.liability
1.18............... exhibits.schedules
1.19............... counterparts
2.................. note.forms
2.01............... forms.generally
2.03............... restrictive.legends
2.03(a)............ ppl
3.................. notes
3.01............... title terms
3.02............... denominations
3.03............... delivery.dating
3.04............... temporary.notes
3.05............... transfer.exchange
3.06............... stolen.notes
3.07............... rights.preserved
3.08............... deemed.owners
3.09............... cancellation
3.10............... computation.interest
3.12............... cusip.numbers
3.13............... book.entry
3.14............... transfer.provisions
4.................. covenants
4.01............... premium
4.01(b)............ notes.wire
4.02............... office.agency
4.03............... money.payments
4.04............... SEC.reports
4.04(a)............ reports.so.long
4.05............... certificates to trustee
4.06............... limitation
4.06(a)............ limitation.indebt
4.07............... restricted.payments
4.07(a)............ restricted.basket
4.08............... restricted.subsidiaries
4.09............... subsidiary.stock
4.09(b)............ asset.reinvest
4.10............... trans.affiliates
4.10(a)............ Company will not
4.11............... limitation.liens
4.12............... note.guarantors
4.13............... change.control
4.15............... line.business
4.16............... accts.rec
4.17............... sunset
4.21............... guarantee
5.................. consol.merger.art
5.01............... consol.merger.sec
5.01(a)............ consol.merger.a
5.02............... Company.substituted
5.03............... cons.mer
ARTICLE/SECTION TARGET NAME
===========================
5.03(a)............ no.mat.sub.ob
5.03(b)............ guar.exceptions
6.................. remedies
6.01............... events.default
6.01(c)............ noncomp.is
6.01(e)............ events.default.e
6.01(g)............ court.having.juris
6.01(h)............ co.or.sig.subs
6.02............... accel
6.04............... waiver of past defaults
6.05............... control.majority
6.06............... limitation.on.suits
6.06(b)............ writ.req
6.07............... rights.rec.pay
6.10............... priorities
6.11............... undert
6.12............... restoration
6.13............... cumulative
6.14............... waiver.stay
7.................. trustee
7.01............... certain.duties
7.02............... notice.defaults
7.03............... rights.trustees
7.04............... recitals
7.06............... hold.notes
7.07............... held.trust
7.08............... reimbursement
7.09............... conflicting.interests
7.10............... trustee.required
7.11............... removal
7.12............... appointment
7.13............... merger
7.14............... claims
7.15............... authenticating.agent
8.01............... addresses.holders
8.02............... preservation.info
8.03............... reports.trustee
9.................. amend.supp
9.01............... without.consent
9.02............... with.consent
9.03............... execution
9.04............... revocation
9.05............... conformity.tia
9.06............... notation
10................. redemption
10.01.............. right.redemption
10.01(a)........... redeemable.notes
10.02.............. applicability
10.04.............. selection by trustee
10.05.............. notice.redemption
10.06.............. deposit.redemption
10.07.............. note.payable
10.07(a)........... note.redem
10.08.............. notes.redeemed
11................. satisfaction
11.01.............. satisfaction.discharges
11.02.............. trust.money
12................. defeasance
12.01.............. comp.option.defeasance
12.02.............. defeasance;discharge
12.03.............. cov.def
12.04.............. con.leg.cov.def
12.04(a)........... cond.to.legal.def.deposit
12.05.............. depo.mon.gov.sec
12.06.............. repay.to.com
ARTICLE/SECTION TARGET NAME
===========================
12.07.............. reinstatement
13................. sub.guar
13.01.............. guars
14................. subordination
14.02.............. liq.dis.bank
14.03.............. default.senior.indebt
14.04.............. distrib.paid.over
14.05.............. notice
14.08(a)........... no.rgt.holder.sen.indebt
ARTICLE/SECTION TARGET NAME
===========================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== =========================== =========================== ===========================
<S> <C> <C> <C>
</TABLE>
B-2
<PAGE>
EXHIBIT 5.1
<TABLE>
<CAPTION>
<S> <C> <C>
BAKER & BOTTS
AUSTIN L.L.P.
BAKU ONE SHELL PLAZA
DALLAS 910 LOUISIANA
LONDON HOUSTON, TEXAS 77002-4995 TELEPHONE: (713) 229-1234
MOSCOW FACSIMILE: (713) 229-1522
NEW YORK
WASHINGTON
</TABLE>
016119.0238 June 29, 1999
Lyondell Chemical Company
Lyondell Chemical Worldwide, Inc.
Lyondell Chemical Nederland, Ltd.
One Houston Center
1221 McKinney, Suite 700
Houston, Texas 77010
Gentlemen:
As set forth in the Registration Statement on Form S-4 (the
"Registration Statement") to be filed by Lyondell Chemical Company, a Delaware
corporation ("Lyondell"), Lyondell Chemical Worldwide, Inc., a Delaware
corporation ("LCW"), and Lyondell Chemical Nederland, Ltd., a Delaware
corporation ("LCNL") (together, the "Co-registrants"), with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the registration under the Act of $900 million
aggregate principal amount of 9 5/8% Senior Secured Notes, Series A, Due 2007,
$1 billion aggregate principal amount of 9 7/8% Senior Secured Notes, Series B,
Due 2007 and $500 million aggregate principal amount of 10 7/8% Senior
Subordinated Notes Due 2009 (collectively, the "New Notes") to be offered by
Lyondell in exchange (the "Exchange Offers") for like principal amounts of its
issued and outstanding unregistered 9 5/8% Senior Secured Notes, Series A, Due
2007, 9 7/8% Senior Secured Notes, Series B, Due 2007 and 10 7/8% Senior
Subordinated Notes Due 2009 (collectively, the "Outstanding Notes") and the
issuance of the related guarantees of the New Notes by LCW and LCNL (the
"Guarantees"), we are passing upon certain legal matters in connection with the
New Notes and the Guarantees for Lyondell, LCW and LCNL. The New Notes are to be
issued under indentures dated as of May 17, 1999 (the "Indentures") among
Lyondell, the Subsidiary Guarantors party thereto and The Bank of New York, as
trustee. At your request, this opinion is being furnished to you for filing as
Exhibit 5.1 to the Registration Statement.
In our capacity as counsel to Lyondell, LCW and LCNL in connection
with the matters referred to above, we have examined the Certificate of
Incorporation and Bylaws of Lyondell, LCW and LCNL, each as amended to date, and
originals, or copies certified or otherwise identified, of corporate records of
Lyondell, LCW and LCNL, including minute books of Lyondell, LCW and LCNL as
furnished to us by Lyondell, LCW and LCNL, certificates of public officials and
of representatives of Lyondell, LCW and LCNL, statutes and other instruments and
documents as a basis for the opinions hereinafter expressed. In giving such
opinions, we have relied upon certificates of officers of Lyondell, LCW and LCNL
with respect to the accuracy of the material
<PAGE>
Lyondell Chemical Company
Lyondell Chemical Worldwide, Inc.
Lyondell Chemical Netherland, Ltd. -2- June 28, 1999
factual matters contained in such certificates. We have assumed that all
signatures on documents examined by us are genuine, all documents submitted to
us are authentic and all documents submitted as certified or photostatic copies
conform to the originals thereof.
Based on our examination as aforesaid, we are of the opinion that,
when each series of New Notes has been duly executed, authenticated and
delivered in accordance with the provisions of the applicable Indenture and
issued in exchange for the corresponding series of Outstanding Notes pursuant
to, and in accordance with the terms of, the applicable Exchange Offer as
contemplated in the Registration Statement, (i) the New Notes will constitute
legal, valid and binding obligations of Lyondell, LCW and LCNL enforceable
against Lyondell, LCW and LCNL in accordance with their terms, except to the
extent that the enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (ii) the Guarantees will be entitled to the benefits of
the applicable Indenture and will constitute legal, valid and binding
obligations of LCW and LCNL enforceable against LCW and LCNL in accordance with
their terms, except to the extent that the enforceability thereof may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other laws relating to or affecting creditors' rights generally and by
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
We hereby consent to the filing of this opinion of counsel as Exhibit
5 to the Registration Statement and to the reference to our Firm under the
heading "Legal Matters" in the prospectus forming a part of the Registration
Statement. In giving this consent, we do not hereby 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 thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
SAM/ER
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Lyondell Chemical Company (formerly Lyondell
Petrochemical Company) of our report dated February 26, 1999 relating to the
consolidated financial statements 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 and our report dated February 26, 1999 relating to the
consolidated financial statements of Lyondell Chemical Company appearing in
Lyondell Chemical Company's Current Report on Form 8-K dated June 29, 1999. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
June 28, 1999
1
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Lyondell Chemical Company, Lyondell Chemical Worldwide, Inc. and Lyondell
Chemical Nederland, Ltd. on Form S-4 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 this Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
June 25, 1999
<PAGE>
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
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 no.)
LYONDELL CHEMICAL WORLDWIDE, INC.
(Exact name of obligor as specified in its charter)
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
LYONDELL CHEMICAL NEDERLAND, LTD.
(Exact name of obligor as specified in its charter)
Delaware 51-0110124
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1221 McKinney Street, Suite 700
Houston, Texas 77010
(Address of principal executive offices) (Zip code)
______________________
9-5/8% Senior Secured Notes, Series A, due 2007
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Name Address
<S> <C>
- --------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of June, 1999.
THE BANK OF NEW YORK
By: /s/MICHELE L. RUSSO
---------------------------------------
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries.
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and
coin........................................... $ 4,508,742
Interest-bearing balances....................... 4,425,071
Securities:
Held-to-maturity securities..................... 836,304
Available-for-sale securities................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell...................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income.....................39,349,679
LESS: Allowance for loan and
lease losses..................603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income,
allowance, and reserve......................... 38,730,748
Trading Assets................................... 1,571,372
Premises and fixed assets (including capitalized
leases)......................................... 685,674
Other real estate owned.......................... 10,331
Investments in unconsolidated subsidiaries and
associated companies............................ 182,449
Customers' liability to this bank on acceptances
outstanding..................................... 1,184,822
Intangible assets................................ 1,129,636
Other assets..................................... 2,632,309
-----------
Total assets..................................... $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices............................. $25,731,036
Noninterest-bearing...................10,252,589
Interest-bearing......................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs......................... 18,756,302
Noninterest-bearing......................111,386
Interest-bearing......................18,644,916
Federal funds purchased and Securities sold
under agreements to repurchase.................. 3,276,362
Demand notes issued to the U.S.Treasury.......... 230,671
Trading liabilities.............................. 1,554,493
Other borrowed money:
With remaining maturity of one year or less..... 1,154,502
With remaining maturity of more than one year
through three years............................ 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding.................................... 1,185,364
Subordinated notes and debentures................ 1,308,000
Other liabilities................................ 2,743,590
-----------
Total liabilities................................ 55,971,865
===========
EQUITY CAPITAL
Common stock..................................... 1,135,284
Surplus.......................................... 764,443
Undivided profits and capital reserves........... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities................... 44,106
Cumulative foreign currency translation
adjustments..................................... (34,817)
-----------
Total equity capital............................. 5,716,713
-----------
Total liabilities and equity capital............. $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell |
<PAGE>
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
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 no.)
LYONDELL CHEMICAL WORLDWIDE, INC.
(Exact name of obligor as specified in its charter)
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
LYONDELL CHEMICAL NEDERLAND, LTD.
(Exact name of obligor as specified in its charter)
Delaware 51-0110124
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1221 McKinney Street, Suite 700
Houston, Texas 77010
(Address of principal executive offices) (Zip code)
______________________
9-7/8% Senior Secured Notes, Series B, due 2007
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of June, 1999.
THE BANK OF NEW YORK
By: /s/ MICHELE L. RUSSO
-----------------------------------------
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries.
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and
coin........................................... $ 4,508,742
Interest-bearing balances....................... 4,425,071
Securities:
Held-to-maturity securities..................... 836,304
Available-for-sale securities................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell...................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income.....................39,349,679
LESS: Allowance for loan and
lease losses..................603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income,
allowance, and reserve......................... 38,730,748
Trading Assets................................... 1,571,372
Premises and fixed assets (including capitalized
leases)......................................... 685,674
Other real estate owned.......................... 10,331
Investments in unconsolidated subsidiaries and
associated companies............................ 182,449
Customers' liability to this bank on acceptances
outstanding..................................... 1,184,822
Intangible assets................................ 1,129,636
Other assets..................................... 2,632,309
-----------
Total assets..................................... $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices............................. $25,731,036
Noninterest-bearing...................10,252,589
Interest-bearing......................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs......................... 18,756,302
Noninterest-bearing......................111,386
Interest-bearing......................18,644,916
Federal funds purchased and Securities sold
under agreements to repurchase.................. 3,276,362
Demand notes issued to the U.S.Treasury.......... 230,671
Trading liabilities.............................. 1,554,493
Other borrowed money:
With remaining maturity of one year or less..... 1,154,502
With remaining maturity of more than one year
through three years............................ 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding.................................... 1,185,364
Subordinated notes and debentures................ 1,308,000
Other liabilities................................ 2,743,590
-----------
Total liabilities................................ 55,971,865
===========
EQUITY CAPITAL
Common stock..................................... 1,135,284
Surplus.......................................... 764,443
Undivided profits and capital reserves........... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities................... 44,106
Cumulative foreign currency translation
adjustments..................................... (34,817)
-----------
Total equity capital............................. 5,716,713
-----------
Total liabilities and equity capital............. $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell |
<PAGE>
EXHIBIT 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
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 no.)
LYONDELL CHEMICAL WORLDWIDE, INC.
(Exact name of obligor as specified in its charter)
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
LYONDELL CHEMICAL NEDERLAND, LTD.
(Exact name of obligor as specified in its charter)
Delaware 51-0110124
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1221 McKinney Street, Suite 700
Houston, Texas 77010
(Address of principal executive offices) (Zip code)
______________________
10-7/8% Senior Subordinated Notes due 2009
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 21st day of June, 1999.
THE BANK OF NEW YORK
By: /s/ MICHELE L. RUSSO
-----------------------------------------
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries.
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and
coin........................................... $ 4,508,742
Interest-bearing balances....................... 4,425,071
Securities:
Held-to-maturity securities..................... 836,304
Available-for-sale securities................... 4,047,851
Federal funds sold and Securities purchased
under agreements to resell...................... 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income.....................39,349,679
LESS: Allowance for loan and
lease losses..................603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income,
allowance, and reserve......................... 38,730,748
Trading Assets................................... 1,571,372
Premises and fixed assets (including capitalized
leases)......................................... 685,674
Other real estate owned.......................... 10,331
Investments in unconsolidated subsidiaries and
associated companies............................ 182,449
Customers' liability to this bank on acceptances
outstanding..................................... 1,184,822
Intangible assets................................ 1,129,636
Other assets..................................... 2,632,309
-----------
Total assets..................................... $61,688,578
===========
LIABILITIES
Deposits:
In domestic offices............................. $25,731,036
Noninterest-bearing...................10,252,589
Interest-bearing......................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs......................... 18,756,302
Noninterest-bearing......................111,386
Interest-bearing......................18,644,916
Federal funds purchased and Securities sold
under agreements to repurchase.................. 3,276,362
Demand notes issued to the U.S.Treasury.......... 230,671
Trading liabilities.............................. 1,554,493
Other borrowed money:
With remaining maturity of one year or less..... 1,154,502
With remaining maturity of more than one year
through three years............................ 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding.................................... 1,185,364
Subordinated notes and debentures................ 1,308,000
Other liabilities................................ 2,743,590
-----------
Total liabilities................................ 55,971,865
===========
EQUITY CAPITAL
Common stock..................................... 1,135,284
Surplus.......................................... 764,443
Undivided profits and capital reserves........... 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities................... 44,106
Cumulative foreign currency translation
adjustments..................................... (34,817)
-----------
Total equity capital............................. 5,716,713
-----------
Total liabilities and equity capital............. $61,688,578
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell |
<PAGE>
EXHIBIT 99.1
LYONDELL CHEMICAL COMPANY
LETTER TO
THE DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
9-5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007 IN
EXCHANGE FOR REGISTERED
9-5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
____________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES
TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
To Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the offer
by Lyondell Chemical Company (the "Issuer"), Lyondell Chemical Worldwide, Inc.
and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary Guarantors") to
exchange (the "Exchange Offer") 9-5/8% Senior Secured Notes, Series A, Due 2007
(the "New Notes"), the issuance of which has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of the issued and outstanding unregistered 9-5/8% Senior Secured Notes,
Series A, Due 2007 (the "Outstanding Notes"), upon the terms and subject to the
conditions set forth in the prospectus dated _______________, 1999 (the
"Prospectus") and the related Letter of Transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated ____________, 1999
2. Letter of Transmittal (together with accompanying Substitute Form
W-9 Guidelines)
3. Notice of Guaranteed Delivery
4. Letter of instructions that may be sent to your clients for whose
account you hold Outstanding Notes in your name or in the name of
your nominee, with space provided for obtaining such client's
instructions with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire at 5:00 p.m., New York City time, on ____________,
1999, unless extended.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange or upon the consummation
of any other Exchange Offer.
Pursuant to the Letter of Transmittal, each holder of Outstanding Notes
will represent to the Issuer that (i) any New Notes received are being acquired
in the ordinary course of business of the person receiving such New Notes, (ii)
<PAGE>
such person does not have an arrangement or understanding with any person to
participate in the distribution of the Outstanding Notes or the New Notes within
the meaning of the Securities Act and (iii) such person is not an "affiliate,"
as defined in Rule 405 under the Securities Act, of the Issuer or any Subsidiary
Guarantor or, if it is such an affiliate, it will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable. In addition, each holder of Outstanding Notes will represent to the
Issuer that (i) if such person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes and (ii) if such
person is a broker-dealer that will receive New Notes for its own account in
exchange for Outstanding Notes that were acquired as a result of market-making
activities or other trading activities, it will deliver a Prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a Prospectus, it will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The enclosed letter to clients contains an authorization by the beneficial
owners of the Outstanding Notes for you to make the foregoing representations.
The Issuer will not pay any fee or commission to any broker or dealer or to
any other person (other than the Exchange Agent) in connection with the
solicitation of tenders of Outstanding Notes pursuant to the Exchange Offer. The
Issuer will pay or cause to be paid any transfer taxes payable on the transfer
of Outstanding Notes to it, except as otherwise provided in Instruction 7 of the
enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from us.
Very truly yours,
The Bank of New York
2
<PAGE>
EXHIBIT 99.2
LYONDELL CHEMICAL COMPANY
LETTER TO
THE DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
IN EXCHANGE FOR REGISTERED
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ___________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED IN THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
To Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the offer
by Lyondell Chemical Company (the "Issuer"), Lyondell Chemical Worldwide, Inc.
and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary Guarantors") to
exchange (the "Exchange Offer") 9 7/8% Senior Secured Notes, Series B, Due 2007
(the "New Notes"), the issuance of which has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of the issued and outstanding unregistered 9 7/8% Senior Secured Notes,
Series B, Due 2007 (the "Outstanding Notes"), upon the terms and subject to the
conditions set forth in the prospectus dated _______________, 1999 (the
"Prospectus") and the related Letter of Transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated ____________, 1999
2. Letter of Transmittal (together with accompanying Substitute Form
W-9 Guidelines)
3. Notice of Guaranteed Delivery
4. Letter of instructions that may be sent to your clients for whose
account you hold Outstanding Notes in your name or in the name of your
nominee, with space provided for obtaining such client's instructions with
regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire at 5:00 p.m., New York City time, on ____________,
1999, unless extended.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange or upon the consummation
of any other Exchange Offer.
Pursuant to the Letter of Transmittal, each holder of Outstanding Notes
will represent to the Issuer that (i) any New Notes received are being acquired
in the ordinary course of business of the person receiving such New Notes, (ii)
<PAGE>
such person does not have an arrangement or understanding with any person to
participate in the distribution of the Outstanding Notes or the New Notes within
the meaning of the Securities Act and (iii) such person is not an "affiliate,"
as defined in Rule 405 under the Securities Act, of the Issuer or any Subsidiary
Guarantor or, if it is such an affiliate, it will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable. In addition, each holder of Outstanding Notes will represent to the
Issuer that (i) if such person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes and (ii) if such
person is a broker-dealer that will receive New Notes for its own account in
exchange for Outstanding Notes that were acquired as a result of market-making
activities or other trading activities, it will deliver a Prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a Prospectus, it will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The enclosed letter to clients contains an authorization by the beneficial
owners of the Outstanding Notes for you to make the foregoing representations.
The Issuer will not pay any fee or commission to any broker or dealer or to
any other person (other than the Exchange Agent) in connection with the
solicitation of tenders of Outstanding Notes pursuant to the Exchange Offer. The
Issuer will pay or cause to be paid any transfer taxes payable on the transfer
of Outstanding Notes to it, except as otherwise provided in Instruction 7 of the
enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from us.
Very truly yours,
The Bank of New York
2
<PAGE>
EXHIBIT 99.3
LYONDELL CHEMICAL COMPANY
LETTER TO
THE DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
IN EXCHANGE FOR REGISTERED
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED IN THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
To Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the offer
by Lyondell Chemical Company (the "Issuer"), Lyondell Chemical Worldwide, Inc.
and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary Guarantors") to
exchange (the "Exchange Offer") 10 7/8% Senior Subordinated Notes Due 2009 (the
"New Notes"), the issuance of which has been registered under the Securities Act
of 1933, as amended (the "Securities Act"), for a like principal amount of the
issued and outstanding unregistered 10 7/8% Senior Subordinated Notes Due 2009
(the "Outstanding Notes"), upon the terms and subject to the conditions set
forth in the prospectus dated _______________, 1999 (the "Prospectus") and the
related Letter of Transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated ____________, 1999
2. Letter of Transmittal (together with accompanying Substitute Form
W-9 Guidelines)
3. Notice of Guaranteed Delivery
4. Letter of instructions that may be sent to your clients for whose
account you hold Outstanding Notes in your name or in the name of your
nominee, with space provided for obtaining such client's instructions with
regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire at 5:00 p.m., New York City time, on ____________,
1999, unless extended.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange or upon the consummation
of any other Exchange Offer.
Pursuant to the Letter of Transmittal, each holder of Outstanding Notes
will represent to the Issuer that (i) any New Notes received are being acquired
in the ordinary course of business of the person receiving such New Notes, (ii)
<PAGE>
such person does not have an arrangement or understanding with any person to
participate in the distribution of the Outstanding Notes or the New Notes within
the meaning of the Securities Act and (iii) such person is not an "affiliate,"
as defined in Rule 405 under the Securities Act, of the Issuer or any Subsidiary
Guarantor or, if it is such an affiliate, it will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable. In addition, each holder of Outstanding Notes will represent to the
Issuer that (i) if such person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes and (ii) if such
person is a broker-dealer that will receive New Notes for its own account in
exchange for Outstanding Notes that were acquired as a result of market-making
activities or other trading activities, it will deliver a Prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a Prospectus, it will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The enclosed letter to clients contains an authorization by the beneficial
owners of the Outstanding Notes for you to make the foregoing representations.
The Issuer will not pay any fee or commission to any broker or dealer or to
any other person (other than the Exchange Agent) in connection with the
solicitation of tenders of Outstanding Notes pursuant to the Exchange Offer. The
Issuer will pay or cause to be paid any transfer taxes payable on the transfer
of Outstanding Notes to it, except as otherwise provided in Instruction 7 of the
enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from us.
Very truly yours,
The Bank of New York
2
<PAGE>
EXHIBIT 99.4
LYONDELL CHEMICAL COMPANY
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007
IN EXCHANGE FOR REGISTERED
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ___________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED IN THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
TO OUR CLIENTS:
We are enclosing with this letter a prospectus dated , 1999 (the
"Prospectus") of Lyondell Chemical Company (the "Issuer"), Lyondell Chemical
Worldwide, Inc. and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary
Guarantors") and the related Letter of Transmittal. These two documents
together constitute the Issuer's offer to exchange (the "Exchange Offer")
9 5/8% Senior Secured Notes, Series A, Due 2007 (the "New Notes"), the issuance
of which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 9 5/8% Senior Secured Notes, Series A, Due 2007 (the "Outstanding
Notes").
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange or upon the consummation
of any other Exchange Offer.
We are the holder of record of Outstanding Notes held by us for your own
account. A tender of your Outstanding Notes held by us can be made only by us
as the record holder according to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Outstanding Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Outstanding Notes held by us for your account under the terms and conditions of
the Exchange Offer. We also request that you confirm that we may, on your
behalf, make the representations contained in the Letter of Transmittal.
Under the Letter of Transmittal, each holder of Outstanding Notes will
represent to the Issuer that:
(i) any New Notes received are being acquired in the ordinary course
of business of the person receiving such New Notes;
(ii) such person does not have an arrangement or understanding with
any person to participate in the distribution of the Outstanding Notes or
the New Notes within the meaning of the Securities Act; and
<PAGE>
(iii) such person is not an "affiliate," as defined in Rule 405 under
the Securities Act, of the Issuer or any Subsidiary Guarantor or, if it is
an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
In addition, each holder of Outstanding Notes will represent to the Issuer
that:
(i) if that person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes; and
(ii) if that person is a broker-dealer who will receive New Notes for its
own account in exchange for Outstanding Notes that were acquired as a
result of market-making activities or other trading activities, it will
deliver a Prospectus in connection with any resale of those New Notes;
however, by so acknowledging and by delivering a Prospectus, it will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Very truly yours,
2
<PAGE>
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE.
INSTRUCTION TO
DTC TRANSFER PARTICIPANT
To Participant of The Depository Trust Company:
The undersigned hereby acknowledges receipt and review of the prospectus
dated , 1999 (the "Prospectus") of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and the related Letter of Transmittal.
These two documents together constitute the Issuer's offer to exchange (the
"Exchange Offer") 9 5/8% Senior Secured Notes, Series A, Due 2007 (the "New
Notes"), the issuance of which has been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like principal amount of issued
and outstanding unregistered 9 5/8% Senior Secured Notes, Series A, Due 2007
(the "Outstanding Notes").
This will instruct you, the registered holder and DTC participant, as to
the action to be taken by you relating to the Exchange Offer for the Outstanding
Notes held by you for the account of the undersigned.
The aggregate principal amount of the Outstanding Notes of each series held
by you for the account of the undersigned is (fill in amount):
Title of Series Principal Amount
- ------------------------------------------------------
9 5/8% Senior Secured Notes,
Series A, Due 2007
- ------------------------------------------------------
WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS YOU
(CHECK APPROPRIATE BOX):
[ ] TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OUTSTANDING NOTES HELD BY YOU FOR THE
ACCOUNT OF THE UNDERSIGNED:
Title of Series Principal Amount Tendered
- ---------------------------------------------------------------
9 5/8% Senior Secured Notes,
Series A, Due 2007
- ---------------------------------------------------------------
[ ] NOT TO TENDER ANY OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO DTC PARTICIPANT
WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR
THE ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Outstanding Notes held by
you for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including, but not limited to, the representations that:
3
<PAGE>
(i) any New Notes received are being acquired in the ordinary course of
business of the undersigned;
(ii) the undersigned does not have an arrangement or understanding with any
person to participate in the distribution of the Outstanding Notes or
the New Notes within the meaning of the Securities Act;
(iii) the undersigned is not an "affiliate," as defined in Rule 405 under the
Securities Act, of the Issuer or any Subsidiary Guarantor or, if it is
an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
(iv) if the undersigned is not a broker-dealer, it is not engaged in, and
does not intend to participate in, a distribution of New Notes; and
(v) if the undersigned is a broker-dealer that will receive New Notes for
its own account in exchange for Outstanding Notes that were acquired as
a result of market-making activities or other trading activities, it
will deliver a Prospectus in connection with any resale of those New
Notes; however, by so acknowledging and by delivering a Prospectus, the
undersigned will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
SIGN HERE
Name of beneficial owner(s): __________________________________________________
Signature(s): _________________________________________________________________
Name(s) (please print): _______________________________________________________
Address: ______________________________________________________________________
Telephone Number: _____________________________________________________________
Taxpayer Identification or Social Security Number: ____________________________
Date: _________________________________________________________________________
4
<PAGE>
EXHIBIT 99.5
LYONDELL CHEMICAL COMPANY
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
IN EXCHANGE FOR REGISTERED
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED IN THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
To Our Clients:
We are enclosing with this letter a prospectus dated , 1999 (the
"Prospectus") of Lyondell Chemical Company (the "Issuer"), Lyondell Chemical
Worldwide, Inc. and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary
guarantors") and the related letter of transmittal. These two documents
together constitute the Issuer's offer to exchange (the "Exchange Offer") 9 7/8%
Senior Secured Notes, Series B, Due 2007 (the "New Notes"), the issuance of
which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 9 7/8% Senior Secured Notes, Series B, Due 2007 (the "Outstanding
Notes").
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Outstanding Notes being tendered for exchange or upon the consummation
of any other Exchange Offer.
We are the holder of record of Outstanding Notes held by us for your own
account. A tender of your Outstanding Notes held by us can be made only by us
as the record holder according to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Outstanding Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Outstanding Notes held by us for your account under the terms and conditions of
the exchange offer. We also request that you confirm that we may, on your
behalf, make the representations contained in the Letter of Transmittal.
Under the Letter of Transmittal, each holder of Outstanding Notes will
represent to the Issuer that:
(i) any New Notes received are being acquired in the ordinary course of
business of the person receiving such New Notes;
(ii) such person does not have an arrangement or understanding with any
person to participate in the distribution of the Outstanding Notes or the
New Notes within the meaning of the Securities Act; and
<PAGE>
(iii) such person is not an "affiliate," as defined in Rule 405 under
the Securities Act, of the Issuer or any Subsidiary Guarantor or, if it is
an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
In addition, each holder of Outstanding Notes will represent to the Issuer
that:
(i) if that person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes; and
(ii) if that person is a broker-dealer who will receive New Notes for
its own account in exchange for Outstanding Notes that were acquired as a
result of market-making activities or other trading activities, it will
deliver a Prospectus in connection with any resale of those New Notes;
however, by so acknowledging and by delivering a Prospectus, it will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Very truly yours,
2
<PAGE>
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE.
INSTRUCTION TO
DTC TRANSFER PARTICIPANT
To Participant of The Depository Trust Company:
The undersigned hereby acknowledges receipt and review of the prospectus
dated , 1999 (the "Prospectus") of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and the related Letter of Transmittal.
These two documents together constitute the Issuer's offer to exchange (the
"Exchange Offer") 9 7/8% Senior Secured Notes, Series B, Due 2007 (the "New
Notes"), the issuance of which has been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like principal amount of issued
and outstanding unregistered 9 7/8% Senior Secured Notes, Series B, Due 2007
(the "Outstanding Notes").
This will instruct you, the registered holder and DTC participant, as to
the action to be taken by you relating to the Exchange Offer for the Outstanding
Notes held by you for the account of the undersigned.
The aggregate principal amount of the Outstanding Notes held by you for the
account of the undersigned is (fill in amount):
Title of Series Principal Amount
- ------------------------------------------------------
9 78% Senior Secured Notes,
Series B, Due 2007
- ------------------------------------------------------
WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS YOU
(CHECK APPROPRIATE BOX):
[ ] TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OUTSTANDING NOTES HELD BY YOU FOR THE
ACCOUNT OF THE UNDERSIGNED:
Title of Series Principal Amount Tendered
- ---------------------------------------------------------------
9 7/8% Senior Secured Notes,
Series B, Due 2007
- ---------------------------------------------------------------
[ ] NOT TO TENDER ANY OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO DTC PARTICIPANT
WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR
THE ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Outstanding Notes held by
you for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including, but not limited to, the representations that:
3
<PAGE>
(i) any New Notes received are being acquired in the ordinary course of
business of the undersigned;
(ii) the undersigned does not have an arrangement or understanding with
any person to participate in the distribution of the Outstanding Notes or
the New Notes within the meaning of the Securities Act;
(iii) the undersigned is not an "affiliate," as defined in Rule 405
under the Securities Act, of the Issuer or any Subsidiary Guarantor or, if
it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
(iv) if the undersigned is not a broker-dealer, it is not engaged in,
and does not intend to participate in, a distribution of New Notes; and
(v) if the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes that were acquired as
a result of market-making activities or other trading activities, it will
deliver a Prospectus in connection with any resale of those New Notes;
however, by so acknowledging and by delivering a Prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
SIGN HERE
Name of beneficial owner(s): ___________________________________________________
Signature(s): __________________________________________________________________
Name(s) (please print): ________________________________________________________
Address: _______________________________________________________________________
Telephone Number: ______________________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
Date: __________________________________________________________________________
4
<PAGE>
EXHIBIT 99.6
LYONDELL CHEMICAL COMPANY
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
IN EXCHANGE FOR REGISTERED
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ___________,
1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED IN THE
EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
To Our Clients:
We are enclosing with this letter a prospectus dated , 1999 (the
"Prospectus") of Lyondell Chemical Company (the "Issuer"), Lyondell Chemical
Worldwide, Inc. and Lyondell Chemical Nederland, Ltd. (together, the "Subsidiary
Guarantors") and the related Letter of Transmittal. These two documents
together constitute the Issuer's offer to exchange (the "Exchange Offer")
10 7/8% Senior Subordinated Notes Due 2009 (the "New Notes"), the issuance of
which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 10 7/8% Senior Subordinated Notes Due 2009 (the "Outstanding
Notes").
The Exchange Offer for Outstanding Notes is not conditioned upon any
minimum aggregate principal amount of Outstanding Notes being tendered for
exchange or upon the consummation of any other Exchange Offer.
We are the holder of record of Outstanding Notes held by us for your own
account. A tender of your Outstanding Notes held by us can be made only by us
as the record holder according to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Outstanding Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Outstanding Notes held by us for your account under the terms and conditions of
the Exchange Offer. We also request that you confirm that we may, on your
behalf, make the representations contained in the Letter of Transmittal.
Under the Letter of Transmittal, each holder of Outstanding Notes will
represent to the Issuer that:
(i) any New Notes received are being acquired in the ordinary course of
business of the person receiving such New Notes;
(ii) such person does not have an arrangement or understanding with any
person to participate in the distribution of the Outstanding Notes or the
New Notes within the meaning of the Securities Act; and
<PAGE>
(iii) such person is not an "affiliate," as defined in Rule 405 under
the Securities Act, of the Issuer or any Subsidiary Guarantor or, if it is
an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
In addition, each holder of Outstanding Notes will represent to the Issuer
that:
(i) if that person is not a broker-dealer, it is not engaged in, and
does not intend to engage in, a distribution of New Notes; and
(ii) if that person is a broker-dealer who will receive New Notes for
its own account in exchange for Outstanding Notes that were acquired as a
result of market-making activities or other trading activities, it will
deliver a Prospectus in connection with any resale of those New Notes;
however, by so acknowledging and by delivering a Prospectus, it will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Very truly yours,
2
<PAGE>
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE.
INSTRUCTION TO
DTC TRANSFER PARTICIPANT
To Participant of The Depository Trust Company:
The undersigned hereby acknowledges receipt and review of the prospectus
dated , 1999 (the "Prospectus") of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and the related Letter of Transmittal.
These two documents together constitute the Issuer's offer to exchange (the
"Exchange Offer") 10 7/8% Senior Subordinated Notes Due 2009 (the "New Notes"),
the issuance of which has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of issued and
outstanding unregistered 10 7/8% Senior Secured Notes Due 2009 (the "Outstanding
Notes").
This will instruct you, the registered holder and DTC participant, as to
the action to be taken by you relating to the Exchange Offer for the Outstanding
Notes held by you for the account of the undersigned.
The aggregate principal amount of the Outstanding Notes of each series held
by you for the account of the undersigned is (fill in amount):
Title of Series Principal Amount
- ----------------------------------------------------
10 7/8% Senior Subordinated
Notes Due 2009
- ----------------------------------------------------
WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS YOU
(CHECK APPROPRIATE BOX):
[ ] TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OUTSTANDING NOTES HELD BY YOU FOR THE
ACCOUNT OF THE UNDERSIGNED:
Title of Series Principal Amount Tendered
- -------------------------------------------------------------
10 7/8% Senior Subordinated
Notes Due 2009
- -------------------------------------------------------------
[ ] NOT TO TENDER ANY OUTSTANDING NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO DTC PARTICIPANT
WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OUTSTANDING NOTES HELD BY YOU FOR
THE ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Outstanding Notes held by
you for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including, but not limited to, the representations that:
3
<PAGE>
(i) any New Notes received are being acquired in the ordinary course of
business of the undersigned;
(ii) the undersigned does not have an arrangement or understanding with
any person to participate in the distribution of the Outstanding Notes or
the New Notes within the meaning of the Securities Act;
(iii) the undersigned is not an "affiliate," as defined in Rule 405
under the Securities Act, of the Issuer or any Subsidiary Guarantor or, if
it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable;
(iv) if the undersigned is not a broker-dealer, it is not engaged in,
and does not intend to participate in, a distribution of New Notes; and
(v) if the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes that were acquired as
a result of market-making activities or other trading activities, it will
deliver a Prospectus in connection with any resale of those New Notes;
however, by so acknowledging and by delivering a Prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
SIGN HERE
Name of beneficial owner(s): ___________________________________________________
Signature(s): __________________________________________________________________
Name(s) (please print): ________________________________________________________
Address: _______________________________________________________________________
Telephone Number: ______________________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
Date: __________________________________________________________________________
4
<PAGE>
EXHIBIT 99.7
LYONDELL CHEMICAL COMPANY
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007 IN
EXCHANGE FOR REGISTERED
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007
This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and to tender outstanding unregistered
9 5/8% Senior Secured Notes, Series A, Due 2007 (the "Outstanding Notes") to The
Bank of New York, as exchange agent (the "Exchange Agent") pursuant to the
guaranteed delivery procedures described in "The Exchange Offers--Guaranteed
Delivery Procedures" of the prospectus dated _________, 1999 (the "Prospectus")
and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes
to tender Outstanding Notes pursuant to such guaranteed delivery procedures must
ensure that the Exchange Agent receives this Notice of Guaranteed Delivery,
properly completed and duly executed, prior to the Expiration Date (as defined
below) of the Exchange Offer. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
______________________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE").
OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE
OFFER.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
By Courier: By Mail (registered or By Hand:
certified mail recommended):
<S> <C> <C>
THE BANK OF NEW YORK THE BANK OF NEW YORK 101 BARCLAY ST.
101 BARCLAY ST. 101 BARCLAY ST., FLOOR 7E CORPORATE TRUST SERVICES WINDOW
CORPORATE TRUST SERVICES WINDOW NEW YORK, NY 10286 GROUND LEVEL
GROUND LEVEL ATTN: REORG. DEPT. NEW YORK, NY 10286
NEW YORK, NY 10286 ATTN: REORG. DEPT.
ATTN: REORG. DEPT.
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 815-4699
ATTN: ___________________________
CONFIRM BY TELEPHONE:
(212) 815-2742
1
<PAGE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS NOTICE OF
GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF GUARANTEED
DELIVERY IS COMPLETED.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE IN THE BOX PROVIDED ON
THE LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, in accordance with the
Issuer's offer, upon the terms and subject to the conditions set forth in the
Prospectus and the related Letter of Transmittal, receipt of which is hereby
acknowledged, the principal amount of Outstanding Notes set forth below pursuant
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offers--Guaranteed Delivery Procedures" and in Instruction
2 of the Letter of Transmittal.
The undersigned hereby tenders the Outstanding Notes listed below:
<TABLE>
<CAPTION>
Title of Certificate Number(s) (if known) Aggregate Aggregate Principal
Series of Outstanding Notes Principal Amount Tendered
or Account Number at the Amount Represented
Book-entry Facility
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lyondell
Chemical
Company
9 5/8% Senior
Secured
Notes, Series
A, Due 2007
- --------------------------------------------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- ------------------------------------------------ ------------------------------------------------
- ------------------------------------------------ -------------------------------------------------
Name(s) of Registered Holder(s) Signatures of Registered Holder(s) or Authorized
Signatory
- -----------------------------------------------
- -----------------------------------------------
Address
Dated , 1999
- ----------------------------------------------- -------------------------------------
Area Code and Telephone Number(s)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as the name(s) of such person(s)
appear(s) on certificates for Outstanding Notes or on a security position
listing as the owner of Outstanding Notes, or by person(s) authorized to become
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
2
<PAGE>
Please print name(s) and address(es)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, hereby
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof or agent's message in lieu thereof), together with the
Outstanding Notes tendered hereby in proper form for transfer (or confirmation
of the book-entry transfer of such Outstanding Notes into the Exchange Agent's
account at the DTC described in the Prospectus under the caption "The Exchange
Offers--Book-entry Transfer" and in the Letter of Transmittal) and any other
required documents, all by 5:00 p.m., New York City time, within five New York
Stock Exchange trading days following the Expiration Date for such series.
Name of Firm:
--------------------------- ------------------------------------
(Authorized Signature)
Address: Name:
-------------------------------- -------------------------------
(Include Zip Code) Title:
------------------------------
(Please Type or Print)
Area Code and Telephone Number:
Date: , 1999
- ---------------------------------------- ------------------------
DO NOT SEND OUTSTANDING NOTES WITH THIS FORM. ACTUAL SURRENDER OF
OUTSTANDING NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS.
3
<PAGE>
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery (or facsimile
hereof or an agent's message and Notice of Guaranteed Delivery in lieu hereof)
and any other documents required by this Notice of Guaranteed Delivery with
respect to the Outstanding Notes must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date of the Exchange Offer. THE
METHOD OF DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY AND ANY OTHER REQUIRED
DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail,
holders may wish to consider using an overnight or hand delivery service. In
all cases, sufficient time should be allowed to ensure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery (or facsimile hereof) is signed by the registered holder(s)
of the Outstanding Notes referred to herein, the signature(s) must correspond
exactly with the name(s) written on the face of the Outstanding Notes without
alteration, enlargement or any change whatsoever. If this Notice of Guaranteed
Delivery (or facsimile hereof) is signed by a participant of the DTC whose name
appears on a security position listing as the owner of the Outstanding Notes,
the signature must correspond with the name shown on the security position
listing as the owner of the Outstanding Notes.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
person other than the registered holder(s) of any Outstanding Notes listed or a
participant of the DTC, this Notice of Guaranteed Delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Outstanding Notes or signed as the name(s) of the participant
shown on the DTC's security position listing.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and submit with the Letter of
Transmittal evidence satisfactory to the Exchange Agent of such person's
authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus and this
Notice of Guaranteed Delivery may be directed to the Exchange Agent at the
address set forth on the cover page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
4
<PAGE>
EXHIBIT 99.8
LYONDELL CHEMICAL COMPANY
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
IN EXCHANGE FOR REGISTERED
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and to tender outstanding unregistered
9 7/8% Senior Secured Notes, Series B, Due 2007 (the "Outstanding Notes") to The
Bank of New York, as exchange agent (the "Exchange Agent") pursuant to the
guaranteed delivery procedures described in "The Exchange Offers--Guaranteed
Delivery Procedures" of the prospectus dated _________, 1999 (the "Prospectus")
and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes
to tender Outstanding Notes pursuant to such guaranteed delivery procedures must
ensure that the Exchange Agent receives this Notice of Guaranteed Delivery,
properly completed and duly executed, prior to the Expiration Date (as defined
below) of the Exchange Offer. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
______________________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE").
OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE
OFFER.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
By Courier: By Mail (registered or By Hand:
certified mail recommended):
<S> <C> <C>
THE BANK OF NEW YORK THE BANK OF NEW YORK 101 BARCLAY ST.
101 BARCLAY ST. 101 BARCLAY ST., FLOOR 7E CORPORATE TRUST SERVICES WINDOW
CORPORATE TRUST SERVICES WINDOW NEW YORK, NY 10286 GROUND LEVEL
GROUND LEVEL ATTN: REORG. DEPT. NEW YORK, NY 10286
NEW YORK, NY 10286 ATTN: REORG. DEPT.
ATTN: REORG. DEPT.
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 815-4699
ATTN: ___________________________
CONFIRM BY TELEPHONE:
(212) 815-2742
<PAGE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS NOTICE OF
GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF GUARANTEED
DELIVERY IS COMPLETED.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE IN THE BOX PROVIDED ON
THE LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, in accordance with the
Issuer's offer, upon the terms and subject to the conditions set forth in the
Prospectus and the related Letter of Transmittal, receipt of which is hereby
acknowledged, the principal amount of Outstanding Notes set forth below pursuant
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offers--Guaranteed Delivery Procedures" and in Instruction
2 of the Letter of Transmittal.
The undersigned hereby tenders the Outstanding Notes listed below:
<TABLE>
<CAPTION>
Title of Series Certificate Number(s) (if known) Aggregate Aggregate Principal
of Outstanding Notes Principal Amount Tendered
or Account Number at the Amount Represented
Book-entry Facility
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lyondell
Chemical
Company 9 7/8%
Senior Secured
Notes, Series B,
Due 2007
- -----------------------------------------------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- ----------------------------------------------------- ------------------------------------------------
Name(s) of Registered Holder(s) Signatures of Registered Holder(s) or
Authorized Signatory
- -----------------------------------------------------
- -----------------------------------------------------
Address
Dated , 1999
- ----------------------------------------------------- ------------------------------------
Area Code and Telephone Number(s)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as the name(s) of such person(s)
appear(s) on certificates for Outstanding Notes or on a security position
listing as the owner of Outstanding Notes, or by person(s) authorized to become
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
2
<PAGE>
Please print name(s) and address(es)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, hereby
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof or agent's message in lieu thereof), together with the
Outstanding Notes tendered hereby in proper form for transfer (or confirmation
of the book-entry transfer of such Outstanding Notes into the Exchange Agent's
account at the DTC described in the Prospectus under the caption "The Exchange
Offers--Book-entry Transfer" and in the Letter of Transmittal) and any other
required documents, all by 5:00 p.m., New York City time, within five New York
Stock Exchange trading days following the Expiration Date for such series.
Name of Firm:
------------------------- -------------------------------------
(Authorized Signature)
Address: Name:
------------------------------ --------------------------------
(Include Zip Code) Title:
------------------------------
(Please Type or Print)
Area Code and Telephone Number:
- -------------------------------------- Date: , 1999
-------------------------
DO NOT SEND OUTSTANDING NOTES WITH THIS FORM. ACTUAL SURRENDER OF
OUTSTANDING NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS.
3
<PAGE>
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery (or facsimile
hereof or an agent's message and Notice of Guaranteed Delivery in lieu hereof)
and any other documents required by this Notice of Guaranteed Delivery with
respect to the Outstanding Notes must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date of the Exchange Offer. THE
METHOD OF DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY AND ANY OTHER REQUIRED
DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail,
holders may wish to consider using an overnight or hand delivery service. In
all cases, sufficient time should be allowed to ensure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery (or facsimile hereof) is signed by the registered holder(s)
of the Outstanding Notes referred to herein, the signature(s) must correspond
exactly with the name(s) written on the face of the Outstanding Notes without
alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed
Delivery (or facsimile hereof) is signed by a participant of the DTC whose name
appears on a security position listing as the owner of the Outstanding Notes,
the signature must correspond with the name shown on the security position
listing as the owner of the Outstanding Notes.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
person other than the registered holder(s) of any Outstanding Notes listed or a
participant of the DTC, this Notice of Guaranteed Delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Outstanding Notes or signed as the name(s) of the participant
shown on the DTC's security position listing.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and submit with the Letter of
Transmittal evidence satisfactory to the Exchange Agent of such person's
authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus and this
Notice of Guaranteed Delivery may be directed to the Exchange Agent at the
address set forth on the cover page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
4
<PAGE>
EXHIBIT 99.9
LYONDELL CHEMICAL COMPANY
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
IN EXCHANGE FOR REGISTERED
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer of Lyondell Chemical Company (the "Issuer"),
Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland, Ltd.
(together, the "Subsidiary Guarantors") and to tender outstanding unregistered
10 7/8% Senior Subordinated Notes Due 2009 (the "Outstanding Notes") to The Bank
of New York, as exchange agent (the "Exchange Agent") pursuant to the guaranteed
delivery procedures described in "The Exchange Offers--Guaranteed Delivery
Procedures" of the prospectus dated __________, 1999 (the "Prospectus") and in
Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Outstanding Notes pursuant to such guaranteed delivery procedures must
ensure that the Exchange Agent receives this Notice of Guaranteed Delivery,
properly completed and duly executed, prior to the Expiration Date (as defined
below) of the Exchange Offer. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
______________________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE").
OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE
OFFER.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
By Courier: By Mail (registered or By Hand:
certified mail recommended):
<S> <C> <C>
THE BANK OF NEW YORK THE BANK OF NEW YORK 101 BARCLAY ST.
101 BARCLAY ST. 101 BARCLAY ST., FLOOR 7E CORPORATE TRUST SERVICES WINDOW
CORPORATE TRUST SERVICES WINDOW NEW YORK, NY 10286 GROUND LEVEL
GROUND LEVEL ATTN: REORG. DEPT. NEW YORK, NY 10286
NEW YORK, NY 10286 ATTN: REORG. DEPT.
ATTN: REORG. DEPT.
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(212) 815-4699
ATTN: ___________________________
CONFIRM BY TELEPHONE:
(212) 815-2742
<PAGE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS NOTICE OF
GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF GUARANTEED
DELIVERY IS COMPLETED.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE IN THE BOX PROVIDED ON
THE LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, in accordance with the
Issuer's offer, upon the terms and subject to the conditions set forth in the
Prospectus and the related Letter of Transmittal, receipt of which is hereby
acknowledged, the principal amount of Outstanding Notes set forth below pursuant
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offers--Guaranteed Delivery Procedures" and in Instruction
2 of the Letter of Transmittal.
The undersigned hereby tenders the Outstanding Notes listed below:
<TABLE>
<CAPTION>
Title of Series Certificate Number(s) (if known) Aggregate Aggregate Principal
of Outstanding Notes Principal Amount Tendered
or Account Number at the Amount Represented
Book-entry Facility
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lyondell
Chemical
Company
10 7/8% Senior
Subordinated
Due 2009
- ---------------------------------------------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
- ---------------------------------------------------- ------------------------------------------------
Name(s) of Registered Holder(s) Signatures of Registered Holder(s) or
Authorized Signatory
- ----------------------------------------------------
- ----------------------------------------------------
Address
Dated , 1999
- ---------------------------------------------------- ---------------------------------------
Area Code and Telephone Number(s)
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as the name(s) of such person(s)
appear(s) on certificates for Outstanding Notes or on a security position
listing as the owner of Outstanding Notes, or by person(s) authorized to become
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
2
<PAGE>
Please print name(s) and address(es)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, hereby
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof or agent's message in lieu thereof), together with the
Outstanding Notes tendered hereby in proper form for transfer (or confirmation
of the book-entry transfer of such Outstanding Notes into the Exchange Agent's
account at the DTC described in the Prospectus under the caption "The Exchange
Offers--Book-entry Transfer" and in the Letter of Transmittal) and any other
required documents, all by 5:00 p.m., New York City time, within five New York
Stock Exchange trading days following the Expiration Date for such series.
Name of Firm:
--------------------------- -------------------------------------
(Authorized Signature)
Address: Name:
-------------------------------- --------------------------------
(Include Zip Code) Title:
-------------------------------
(Please Type or Print)
Area Code and Telephone Number:
Date: , 1999
- ---------------------------------------- --------------------------
DO NOT SEND OUTSTANDING NOTES WITH THIS FORM. ACTUAL SURRENDER OF
OUTSTANDING NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS.
3
<PAGE>
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery (or facsimile
hereof or an agent's message and Notice of Guaranteed Delivery in lieu hereof)
and any other documents required by this Notice of Guaranteed Delivery with
respect to the Outstanding Notes must be received by the Exchange Agent at its
address set forth herein prior to the Expiration Date of the Exchange Offer. THE
METHOD OF DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY AND ANY OTHER REQUIRED
DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail,
holders may wish to consider using an overnight or hand delivery service. In
all cases, sufficient time should be allowed to ensure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery (or facsimile hereof) is signed by the registered holder(s)
of the Outstanding Notes referred to herein, the signature(s) must correspond
exactly with the name(s) written on the face of the Outstanding Notes without
alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed
Delivery (or facsimile hereof) is signed by a participant of the DTC whose name
appears on a security position listing as the owner of the Outstanding Notes,
the signature must correspond with the name shown on the security position
listing as the owner of the Outstanding Notes.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
person other than the registered holder(s) of any Outstanding Notes listed or a
participant of the DTC, this Notice of Guaranteed Delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Outstanding Notes or signed as the name(s) of the participant
shown on the DTC's security position listing.
If this Notice of Guaranteed Delivery (or facsimile hereof) is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and submit with the Letter of
Transmittal evidence satisfactory to the Exchange Agent of such person's
authority to so act.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus and this
Notice of Guaranteed Delivery may be directed to the Exchange Agent at the
address set forth on the cover page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
4
<PAGE>
EXHIBIT 99.10
LYONDELL CHEMICAL COMPANY
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007 IN
EXCHANGE FOR REGISTERED
9 5/8% SENIOR SECURED NOTES,
SERIES A, DUE 2007
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
____________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES
TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed and submitted to the Exchange Agent:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
By Courier: By Mail (registered or By Hand:
certified mail recommended):
<S> <C> <C>
The Bank of New York The Bank of New York 101 Barclay St.
101 Barclay St. 101 Barclay St., Floor 7E Corporate Trust Services Window
Corporate Trust Services Window New York, NY 10286 Ground Level
Ground Level Attn: Reorg. Dept. New York, NY 10286
New York, NY 10286 Attn: Reorg. Dept.
Attn: Reorg. Dept.
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
212-815-4699
Attn: ________________________
Confirm by telephone:
(212) 815-2742
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SHOWN ABOVE OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
(212) 815-2742.
<PAGE>
The undersigned hereby acknowledges receipt and review of the prospectus
dated ____________, 1999 (the "Prospectus") of Lyondell Chemical Company (the
"Issuer"), Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland,
Ltd. (each a "Subsidiary Guarantor") and this Letter of Transmittal which
together constitute the Issuer's offer to exchange (the "Exchange Offer")
9 5/8% Senior Secured Notes, Series A, Due 2007 (the "New Notes"), the issuance
of which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 9 5/8% Senior Secured Notes, Series A, Due 2007 (the "Outstanding
Notes"). Capitalized terms used but not defined herein have the respective
meanings given to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer for the Outstanding Notes is
open, at its discretion, in which event the term "Expiration Date" shall mean
the latest date to which such Exchange Offer is extended. The Issuer reserves
the right to extend such period independently of any other Exchange Offer. The
Issuer shall notify The Bank of New York (the "Exchange Agent") of any extension
by oral or written notice and shall make a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
Registered Holders of Exchange Notes on the relevant record date for the
first interest payment date following the consummation of an Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid on the Outstanding Notes or, if no interest has been paid, from ________,
1999. Outstanding Notes accepted for exchange will cease to accrue interest from
and after the date of consummation of an Exchange Offer. Holders whose
Outstanding Notes are accepted for exchange will not receive any payment in
respect of accrued interest on such Outstanding Notes otherwise payable on any
interest payment date the record date for which occurs on or after consummation
of an Exchange Offer.
This Letter of Transmittal is to be used by a holder of Outstanding Notes
(i) if certificates of Outstanding Notes are to be forwarded herewith or (ii) if
delivery of Outstanding Notes is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"DTC") pursuant to the procedures set forth in the Prospectus under the caption
"The Exchange Offers--Book-entry Transfer" and an "agent's message" is not
delivered as described in the Prospectus under the caption "The Exchange
Offers--Procedures for Tendering--Tendering Through DTC's Automated Tender Offer
Program." Tenders by book-entry transfer may also be made by delivering an
agent's message in lieu of this Letter of Transmittal. Holders of Outstanding
Notes whose Outstanding Notes are not immediately available, or who are unable
to deliver their Outstanding Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent on or prior to the Expiration
Date for the Exchange Offer, or who are unable to complete the procedure for
book-entry transfer on a timely basis, must tender their Outstanding Notes
according to the guaranteed delivery procedures set forth in the prospectus
under the caption "The Exchange Offers--Guaranteed Delivery Procedures." See
Instruction 2 of this Letter of Transmittal. DELIVERY OF DOCUMENTS TO THE BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to an Exchange Offer for Outstanding Notes
means any person in whose name such Outstanding Notes are registered on the
books of Lyondell Chemical Company, any person who holds such Outstanding Notes
and has obtained a properly completed bond power from the registered holder or
any participant in the DTC system whose name appears on a security position
listing as the holder of such Outstanding Notes and who desires to deliver the
Outstanding Notes by book-entry transfer at DTC. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to such Exchange Offer. Holders who
wish to tender their Outstanding Notes must complete this Letter of Transmittal
in its entirety (unless such Outstanding Notes are to be tendered by book-entry
transfer and an agent's message is delivered in lieu hereof).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF
TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE
DIRECTED TO THE EXCHANGE AGENT AT THE TELEPHONE NUMBER LISTED ABOVE.
2
<PAGE>
List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space below is inadequate, list the title, registered numbers
and principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
<TABLE>
<CAPTION>
DESCRIPTION OF OUTSTANDING NOTES TENDERED
- ----------------------------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Exactly as
Name(s) Outstanding Note(s) Tendered
Appear(s) on Outstanding Notes
(Please Fill In, If Blank)
- ----------------------------------------------------------------------------------------------------
Title of Registered Aggregate Principal Principal
Series Number(s)* Amount Amount
Represented Tendered**
by Note(s)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lyondell
Chemical
Company
9 5/8% Senior
Secured
Notes,
Series A,
Due 2007
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Total
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Outstanding Notes will
be deemed to have tendered the entire aggregate principal amount represented
by such Outstanding Notes. All tenders must be in integral multiples of
$1,000.
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH.
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering
Institution:
--------------------------------------------------------------------
Book-entry Facility Account
Number(s):
----------------------------------------------------------------------
Transaction Code
Number(s):
----------------------------------------------------------------------
3
<PAGE>
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED) (FOR
USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s)
of Outstanding Notes:
-----------------------------------------------------------
Date of Execution of Notice of
Guaranteed Delivery:
------------------------------------------------------------
Window Ticket Number
(if available):
-----------------------------------------------------------------
Name of Eligible Institution that
Guaranteed Delivery:
-----------------------------------------------------------
DTC Account Number(s) (if delivered
by book-entry transfer):
--------------------------------------------------------
Transaction Code Number (if delivered
by book-entry transfer):
--------------------------------------------------------
Name of Tendering Institution (if
delivered by book-entry transfer):
----------------------------------------------
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY
CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY).
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH
TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to participate in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes, it represents that the
New Notes are acquired as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes; however, by so acknowledging and by
delivering a Prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
4
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
Subject to the terms and conditions of the applicable Exchange Offer, the
undersigned hereby tenders to the Issuer for exchange the principal amount of
Outstanding Notes indicated above. Subject to and effective upon the acceptance
for exchange of the principal amount of Outstanding Notes tendered in accordance
with this Letter of Transmittal, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Issuer all right, title and interest in
and to the Outstanding Notes tendered for exchange hereby, including all rights
to accrued and unpaid interest thereon as of the Expiration Date. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent the
true and lawful agent and attorney-in-fact for the undersigned (with full
knowledge that said Exchange Agent also acts as the agent for the Issuer in
connection with the Exchange Offer) with respect to the tendered Outstanding
Notes with full power of substitution to (i) deliver such Outstanding Notes, or
transfer ownership of such Outstanding Notes on the account books maintained by
the DTC, to the Issuer and deliver all accompanying evidences of transfer and
authenticity, and (ii) present such Outstanding Notes for transfer on the books
of the Issuer and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Outstanding Notes, all in accordance with the terms
of the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Notes tendered hereby and to acquire the New Notes issuable upon the
exchange of such tendered Outstanding Notes, and that the Issuer will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Issuer as contemplated herein.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available April 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Shearman & Sterling
(available July 2, 1993) and similar no-action letters (the "Prior No-Action
Letters"), that the New Notes issued in exchange for Outstanding Notes pursuant
to the Exchange Offer may be offered for resale or resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Issuer or any Subsidiary Guarantor within the meaning of Rule
405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holders' business and that
such holders are not engaging in, do not intend to participate in and have no
arrangement or understanding with any person to participate in a distribution of
such New Notes. The SEC has not, however, considered an Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to an Exchange Offer as
in other circumstances.
The undersigned hereby further represents to the Issuer that (i) the New
Notes to be received are being acquired in the ordinary course of business of
the person receiving such New Notes, whether or not the undersigned, (ii)
neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of the
Outstanding Notes or the New Notes within the meaning of the Securities Act and
(iii) neither the holder nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of the Issuer or any Subsidiary Guarantor
or, if it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable. If the
undersigned is not a broker-dealer, the undersigned represents that it is not
engaged in, and does not intend to participate in, a distribution of New Notes.
If the undersigned is a broker-dealer that will receive New Notes for its own
account in exchange for Outstanding Notes, it represents that the New Notes are
being acquired by it as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes. By so acknowledging and by delivering a
Prospectus, however, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
5
<PAGE>
The undersigned acknowledges that if the undersigned is tendering
Outstanding Notes in the Exchange Offer with the intention of participating in
any manner in a distribution of the New Notes (i) the undersigned cannot rely on
the position of the staff of the SEC set forth in the Prior No-Action Letters
and, in the absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
the resale transaction of the New Notes, in which case the registration
statement must contain the selling security holder information required by Item
507 or Item 508, as applicable, of Regulation S-K of the SEC, and (ii) failure
to comply with such requirements in such instance could result in the
undersigned incurring liability for which the undersigned is not indemnified by
the Issuer.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Notes tendered hereby, including the transfer of such Outstanding Notes on the
account books maintained by the DTC.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Notes when, as and if the
Issuer gives oral or written notice thereof to the Exchange Agent. Any tendered
Outstanding Notes that are not accepted for exchange pursuant to the Exchange
Offer for any reason will be returned, without expense, to the undersigned at
the address shown below or at a different address as may be indicated herein
under "Special Delivery Instructions" as promptly as practicable after the
Expiration Date for such Exchange Offer.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives. This tender
may be withdrawn only in accordance with the procedures set forth in the section
of the Prospectus entitled "The Exchange Offers--Withdrawal of Tenders."
The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Notes pursuant to the procedures described under the
caption "The Exchange Offers--Procedures for Tendering" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer. The undersigned further agrees that acceptance of any tendered
Outstanding Notes by the Issuer and the issuance of New Notes in exchange
therefor shall constitute performance in full by the Issuer of their obligations
under the registration rights agreement and that the Issuer shall have no
further obligations or liabilities thereunder for the registration of the
Outstanding Notes or the New Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offers-- Conditions to the Exchange
Offers." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Issuer), the Issuer may not be
required to exchange any of the Outstanding Notes tendered hereby. In such
event, the Outstanding Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the New Notes issued in exchange for the Outstanding Notes accepted for
exchange and return any Outstanding Notes not tendered or not exchanged, in the
name(s) of the undersigned (or, in the case of a book-entry delivery of
Outstanding Notes, please credit the account indicated above maintained at the
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail or deliver the New Notes issued in exchange for the
Outstanding Notes accepted for exchange and any Outstanding Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the undersigned
at the address shown below the undersigned's signature(s). In the event that
both "Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the New Notes issued in exchange for the Outstanding
Notes accepted for exchange in the name(s) of, and return any Outstanding Notes
not tendered or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Issuer has no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Outstanding
Notes from the name of the registered holder(s) thereof if the Issuer does not
accept for exchange any of the Outstanding Notes so tendered for exchange.
6
<PAGE>
<TABLE>
<S> <C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Outstanding Notes in a To be completed ONLY if Outstanding Notes in a
principal amount not tendered, or New Notes issued in principal amount not tendered, or New Notes issued, in
exchange for Outstanding Notes accepted for exchange for Outstanding Notes accepted for exchange,
exchange, are to be issued in the name of someone are to be mailed or delivered to someone other than the
other than the undersigned, or (ii) if Outstanding Notes undersigned, or to the undersigned at an address other
tendered by book-entry transfer which are not than that shown below the undersigned's signature.
exchanged are to be returned by credit to an account Mail or deliver New Notes and/or Old Notes to:
maintained at the DTC other than the DTC Account
Number set forth above. Issue New Notes and/or
Outstanding Notes to:
Name: Name:
------------------------------------------------------- --------------------------------------------------
Address: Address:
---------------------------------------------------- -----------------------------------------------
(Include Zip Code) (Include Zip Code)
- ------------------------------------------------------------ --------------------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
(Please Type or Print) (Please Type or Print)
</TABLE>
[_] Credit unexchanged Outstanding Notes delivered by book-entry transfer to
the DTC account number set forth below:
DTC Account Number:
- --------------------------------------------------------------------------------
7
<PAGE>
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(Signature(s) of Registered Holder(s) of Outstanding Notes)
Dated ___________, 1999
(The above lines must be signed by the registered holder(s) of Outstanding Notes
as your name(s) appear(s) on the Outstanding Notes or on a security position
listing, or by person(s) authorized to become registered holder(s) by a properly
completed bond power from the registered holder(s), a copy of which must be
transmitted with this Letter of Transmittal. If Outstanding Notes to which this
Letter of Transmittal relate are held of record by two or more joint holders,
then all such holders must sign this Letter of Transmittal. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (i) set forth his or her full title below and (ii) unless
waived by the Issuer, submit evidence satisfactory to the Issuer of such
person's authority so to act. See Instruction 5 regarding the completion of
this Letter of Transmittal, printed below.)
Name(s):
------------------------------------------------------------------------
(Please Type or Print)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------------
8
<PAGE>
MEDALLION SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Certain signatures must be guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an
Eligible Institution:
-----------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Address, Including Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: , 1999
--------------------------------------------------------------------
9
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES OR
AGENT'S MESSAGE AND BOOK-ENTRY CONFIRMATIONS. All physically delivered
Outstanding Notes or any confirmation of a book-entry transfer to the Exchange
Agent's account at the DTC of Outstanding Notes tendered by book-entry transfer
(a "Book-entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof (or an agent's message in
lieu hereof), and any other documents required by this Letter of Transmittal
must be received by the Exchange Agent at its address set forth herein on or
prior to 5:00 p.m., New York City time, on the Expiration Date for the Exchange
Offer, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Outstanding Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
THE METHOD OF DELIVERY OF THE TENDERED OUTSTANDING NOTES, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE
EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER
USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE ISSUER.
All questions as to the validity, form, eligibility (including time of
receipt) or acceptance of tendered Outstanding Notes and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which would, in the opinion of counsel for the
Issuer, be unlawful. The Issuer also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Outstanding Notes. The
Issuer's interpretation of the terms and conditions of an Exchange Offer
(including the instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Outstanding Notes must be cured within such time as
the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any
other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Outstanding Notes, nor shall any of
them incur any liability for failure to give such notification. Tenders of
Outstanding Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Outstanding Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders of Outstanding Notes, unless otherwise provided
in this Letter of Transmittal, as soon as practicable following the Expiration
Date. See "The Exchange Offers" section of the Prospectus.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their
Outstanding Notes and (a) whose Outstanding Notes are not immediately available,
or (b) who cannot deliver their Outstanding Notes, this Letter of Transmittal or
any other documents required hereby to the Exchange Agent prior to the
applicable Expiration Date or (c) who are unable to comply with the applicable
procedures under the DTC's Automated Tender Offer Program on a timely basis,
must tender their Outstanding Notes according to the guaranteed delivery
procedures set forth in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through a financial institution (including most banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Program or the Stock Exchanges Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution"); (ii) prior to
the applicable Expiration Date, the Exchange Agent must have received from the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) or a properly
transmitted agent's message and Notice of Guaranteed Delivery setting forth the
name and address of the holder of the Outstanding Notes, the registration
number(s) of such Outstanding Notes and the total principal amount of
Outstanding Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading days after such
Expiration Date, this Letter of Transmittal (or facsimile hereof or an agent's
message in lieu hereof) together with the Outstanding Notes in proper form for
transfer (or a Book-entry Confirmation) and any other documents required by this
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) this Letter of Transmittal (or a facsimile hereof or
an agent's message in lieu hereof) together with the certificates for all
physically tendered Outstanding Notes in proper form for transfer (or Book-entry
Confirmation, as the case may be) and all other
10
<PAGE>
documents required hereby are received by the Exchange Agent within five New
York Stock Exchange trading days after such Expiration Date.
Any holder of Outstanding Notes who wishes to tender Outstanding Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00
p.m., New York City time, on the applicable Expiration Date. Upon request of
the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who
wish to tender their Outstanding Notes according to the guaranteed delivery
procedures set forth above. See "The Exchange Offers--Guaranteed Delivery
Procedures" section of the prospectus.
3. TENDER BY HOLDER. Only a registered holder of Outstanding Notes may
tender such Outstanding Notes in the Exchange Offer. Any beneficial holder of
Outstanding Notes who is not the registered holder and who wishes to tender
should arrange with the registered holder to execute and deliver this Letter of
Transmittal on his behalf or must, prior to completing and executing this Letter
of Transmittal and delivering his Outstanding Notes, either make appropriate
arrangements to register ownership of the Outstanding Notes in such holder's
name or obtain a properly completed bond power from the registered holder.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). Tenders of Outstanding Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any
Outstanding Notes is tendered, the tendering holder should fill in the principal
amount tendered in the third column of the box entitled "Description of
Outstanding Notes Tendered" above. The entire principal amount of Outstanding
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Outstanding
Notes is not tendered, then Outstanding Notes for the principal amount of
Outstanding Notes not tendered and New Notes issued in exchange for any
Outstanding Notes accepted will be returned to the holder as promptly as
practicable after the Outstanding Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURES. If this Letter of Transmittal
(or facsimile hereof) is signed by the record holder(s) of the Outstanding Notes
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Outstanding Notes without alteration, enlargement or
any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is
signed by a participant in the DTC, the signature must correspond with the name
as it appears on the security position listing as the holder of the Outstanding
Notes.
If any tendered Outstanding Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter of Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder(s) of Outstanding Notes listed and tendered hereby and the New
Notes issued in exchange therefor are to be issued (or any untendered principal
amount of Outstanding Notes is to be reissued) to the registered holder(s), then
said holder(s) need not and should not endorse any tendered Outstanding Notes,
nor provide a separate bond power. In any other case, such holder(s) must
either properly endorse the Outstanding Notes tendered or transmit a properly
completed separate bond power with this Letter of Transmittal, with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Issuer, evidence satisfactory to the Issuer
of their authority to act must be submitted with this Letter of Transmittal.
NO SIGNATURE GUARANTEE IS REQUIRED IF (i) THIS LETTER OF TRANSMITTAL (OR
FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(S) OF THE OUTSTANDING NOTES
TENDERED HEREIN (OR BY A PARTICIPANT IN THE DTC WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE OWNER OF THE TENDERED OUTSTANDING NOTES) AND THE NEW
NOTES ARE TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(S) (OR, IF SIGNED BY A
PARTICIPANT IN THE DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT THE DTC) AND
NEITHER THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" NOR THE BOX
11
<PAGE>
ENTITLED "SPECIAL REGISTRATION INSTRUCTIONS" HAS BEEN COMPLETED, OR (ii) SUCH
OUTSTANDING NOTES ARE TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN
ALL OTHER CASES, ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE
HEREOF) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
Notes or substitute Outstanding Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated. Holders tendering
Outstanding Notes by book-entry transfer may request that Outstanding Notes not
exchanged be credited to such account maintained at the DTC as such noteholder
may designate hereon. If no such instructions are given, such Outstanding Notes
not exchanged will be returned to the name and address (or account number) of
the person signing this Letter of Transmittal.
7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Notes pursuant to an Exchange Offer.
If, however, New Notes or Outstanding Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered hereby, or if tendered Outstanding Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Outstanding Notes pursuant to an Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with this Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder and the Exchange Agent will retain possession of an amount
of Exchange Notes with a face amount at least equal to the amount of such
transfer taxes due by such tendering holder pending receipt by the Exchange
Agent of the amount of such taxes.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a
holder of any Outstanding Notes or New Notes must provide the Issuer (as payor)
with its correct taxpayer identification number ("TIN"), which, in the case of a
holder who is an individual is his or her social security number. If the Issuer
is not provided with the correct TIN, the holder or payee may be subject to a
$50 penalty imposed by Internal Revenue Service and backup withholding of 31% on
interest payments on the New Notes.
To prevent backup withholding, each tendering holder and each prospective
holder must provide such holder's correct TIN by completing the Substitute Form
W-9 set forth herein, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN), and that (i) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified the holder that such holder is no longer subject to
backup withholding. If the New Notes will be registered in more than one name
or will not be in the name of the actual owner, consult the instructions on
Internal Revenue Service Form W-9, which may be obtained from the Exchange
Agent, for information on which TIN to report.
Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8, signed under
penalties of perjury, attesting to their foreign status. A Form W-8 can be
obtained from the Exchange Agent.
If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Issuer within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Issuer.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligations regarding backup
withholding.
12
<PAGE>
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which might, in the opinion of the Issuer or
its counsel, be unlawful. The Issuer also reserves the absolute right to waive
any conditions of an Exchange Offer or defects or irregularities of tenders as
to particular Outstanding Notes. The Issuer's interpretation of the terms and
conditions of an Exchange Offer (including this Letter of Transmittal and the
instructions hereto) shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Outstanding Notes
must be cured within such time as the Issuer shall determine. Neither the
Issuer, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Outstanding
Notes nor shall any of them incur any liability for failure to give such
notification.
10. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to
waive, in whole or part, any of the conditions to an Exchange Offer set forth in
the Prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or
contingent tender of Outstanding Notes will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. Any holder
whose Outstanding Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, stolen or destroyed
Outstanding Notes have been followed.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning an Exchange Offer.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offers--Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR
AN AGENT'S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE OUTSTANDING NOTES
DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED
BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
13
<PAGE>
<TABLE>
<CAPTION>
Substitute Part 1 -- Please Provide Your Tin in the Box at Right _______________________________
Form W-9 and Certify By Signing and Dating Below Social Security Number
or
______________________________
Employer Identification number
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Part 2 -- Certification -- Under penalties of Part 3 --
perjury, I certify that:
(1) The number shown on this form is my correct Awaiting TIN [_]
Taxpayer Identification Number (or I have checked the
box in part 3 and executed the certificate of
awaiting taxpayer identification number below) and
(2) I am not subject to back withholding either Please Complete the Certificate of Awaiting
- ----------------------------- because I have not been notified by the Internal Taxpayer Identification Number below.
Name Revenue Service ("IRS") that I am subject to backup
withholding as a result of failure to report all
- ----------------------------- interest or dividends, or because the IRS has
Address (Number and Street) notified me that I am no longer subject to backup
withholding.
- -----------------------------
City, State and Zip Code
Department of the Treasury
Internal Revenue Service
Payor's Request for Taxpayer Certificate Instructions -- You must cross out item (2) in Part 2 above if you have been notified by
Identification Number (TIN) the IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you are subject to backup
withholding you received another notification from the IRS stating that you are no longer subject to
backup withholding, do not cross out item (2).
SIGNATURE_________________________________ DATE ________________________, 1999
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to the payor within 60 days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
- ---------------------------------------- -----------------, 1999
Signature Date
14
<PAGE>
EXHIBIT 99.11
LYONDELL CHEMICAL COMPANY
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
IN EXCHANGE FOR REGISTERED
9 7/8% SENIOR SECURED NOTES,
SERIES B, DUE 2007
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
____________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES
TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed and submitted to the Exchange Agent:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
By Courier: By Mail (registered or By Hand:
certified mail recommended):
<S> <C> <C>
The Bank of New York The Bank of New York 101 Barclay St.
101 Barclay St. 101 Barclay St., Floor 7E Corporate Trust Services Window
Corporate Trust Services Window New York, NY 10286 Ground Level
Ground Level Attn: Reorg. Dept. New York, NY 10286
New York, NY 10286 Attn: Reorg. Dept.
Attn: Reorg. Dept.
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
212-815-4699
Attn: ________________________
Confirm by telephone:
(212) 815-2742
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SHOWN ABOVE OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
(212) 815-2742.
<PAGE>
The undersigned hereby acknowledges receipt and review of the prospectus
dated _________ , 1999 (the "Prospectus") of Lyondell Chemical Company (the
"Issuer"), Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland,
Ltd. (each a "Subsidiary Guarantor") and this Letter of Transmittal which
together constitute the Issuer's offer to exchange (the "Exchange Offer") 9 7/8%
Senior Secured Notes, Series B, Due 2007 (the "New Notes"), the issuance of
which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 9 7/8% Senior Secured Notes, Series B, Due 2007 (the "Outstanding
Notes"). Capitalized terms used but not defined herein have the respective
meanings given to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer for the Outstanding Notes is
open, at its discretion, in which event the term "Expiration Date" shall mean
the latest date to which such Exchange Offer is extended. The Issuer reserves
the right to extend such period independently of any other Exchange Offer. The
Issuer shall notify The Bank of New York (the "Exchange Agent") of any extension
by oral or written notice and shall make a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
Registered Holders of Exchange Notes on the relevant record date for the
first interest payment date following the consummation of an Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid on the Outstanding Notes or, if no interest has been paid, from ______,
1999. Outstanding Notes accepted for exchange will cease to accrue interest from
and after the date of consummation of an Exchange Offer. Holders whose
Outstanding Notes are accepted for exchange will not receive any payment in
respect of accrued interest on such Outstanding Notes otherwise payable on any
interest payment date the record date for which occurs on or after consummation
of an Exchange Offer.
This Letter of Transmittal is to be used by a holder of Outstanding Notes
(i) if certificates of Outstanding Notes are to be forwarded herewith or (ii) if
delivery of Outstanding Notes is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"DTC") pursuant to the procedures set forth in the Prospectus under the caption
"The Exchange Offers--Book-entry Transfer" and an "agent's message" is not
delivered as described in the Prospectus under the caption "The Exchange
Offers--Procedures for Tendering--Tendering Through DTC's Automated Tender Offer
Program." Tenders by book-entry transfer may also be made by delivering an
agent's message in lieu of this Letter of Transmittal. Holders of Outstanding
Notes whose Outstanding Notes are not immediately available, or who are unable
to deliver their Outstanding Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent on or prior to the Expiration
Date for the Exchange Offer, or who are unable to complete the procedure for
book-entry transfer on a timely basis, must tender their Outstanding Notes
according to the guaranteed delivery procedures set forth in the prospectus
under the caption "The Exchange Offers--Guaranteed Delivery Procedures." See
Instruction 2 of this Letter of Transmittal. DELIVERY OF DOCUMENTS TO THE BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to an Exchange Offer for Outstanding Notes
means any person in whose name such Outstanding Notes are registered on the
books of Lyondell Chemical Company, any person who holds such Outstanding Notes
and has obtained a properly completed bond power from the registered holder or
any participant in the DTC system whose name appears on a security position
listing as the holder of such Outstanding Notes and who desires to deliver the
Outstanding Notes by book-entry transfer at DTC. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to such Exchange Offer. Holders who
wish to tender their Outstanding Notes must complete this Letter of Transmittal
in its entirety (unless such Outstanding Notes are to be tendered by book-entry
transfer and an agent's message is delivered in lieu hereof).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF
TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE
DIRECTED TO THE EXCHANGE AGENT AT THE TELEPHONE NUMBER LISTED ABOVE.
2
<PAGE>
List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space below is inadequate, list the title, registered numbers
and principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
<TABLE>
<CAPTION>
DESCRIPTION OF OUTSTANDING NOTES TENDERED
- ----------------------------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Exactly as
Name(s) Outstanding Note(s) Tendered
Appear(s) on Outstanding Notes
(Please Fill In, If Blank)
- ----------------------------------------------------------------------------------------------------
Title of Registered Aggregate Principal Principal
Series Number(s)* Amount Amount
Represented Tendered**
by Note(s)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lyondell
Chemical
Company
9 7/8% Senior
Secured
Notes,
Series B,
Due 2007
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Total
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Outstanding Notes will
be deemed to have tendered the entire aggregate principal amount
represented by such Outstanding Notes. All tenders must be in integral
multiples of $1,000.
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH.
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering
Institution:
--------------------------------------------------------------------
Book-entry Facility Account
Number(s):
----------------------------------------------------------------------
Transaction Code
Number(s):
----------------------------------------------------------------------
3
<PAGE>
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED) (FOR
USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s)
of Outstanding Notes:
-----------------------------------------------------------
Date of Execution of Notice of
Guaranteed Delivery:
------------------------------------------------------------
Window Ticket Number
(if available):
-----------------------------------------------------------------
Name of Eligible Institution that
Guaranteed Delivery:
-----------------------------------------------------------
DTC Account Number(s) (if delivered
by book-entry transfer):
-------------------------------------------------------
Transaction Code Number (if delivered
by book-entry transfer):
-------------------------------------------------------
Name of Tendering Institution (if
delivered by book-entry transfer):
----------------------------------------------
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY
CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY).
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH
TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to participate in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes, it represents that the
New Notes are acquired as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes; however, by so acknowledging and by
delivering a Prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
4
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
Subject to the terms and conditions of the applicable Exchange Offer, the
undersigned hereby tenders to the Issuer for exchange the principal amount of
Outstanding Notes indicated above. Subject to and effective upon the acceptance
for exchange of the principal amount of Outstanding Notes tendered in accordance
with this Letter of Transmittal, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Issuer all right, title and interest in
and to the Outstanding Notes tendered for exchange hereby, including all rights
to accrued and unpaid interest thereon as of the Expiration Date. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent the
true and lawful agent and attorney-in-fact for the undersigned (with full
knowledge that said Exchange Agent also acts as the agent for the Issuer in
connection with the Exchange Offer) with respect to the tendered Outstanding
Notes with full power of substitution to (i) deliver such Outstanding Notes, or
transfer ownership of such Outstanding Notes on the account books maintained by
the DTC, to the Issuer and deliver all accompanying evidences of transfer and
authenticity, and (ii) present such Outstanding Notes for transfer on the books
of the Issuer and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Outstanding Notes, all in accordance with the terms
of the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Notes tendered hereby and to acquire the New Notes issuable upon the
exchange of such tendered Outstanding Notes, and that the Issuer will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Issuer as contemplated herein.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available April 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Shearman & Sterling
(available July 2, 1993) and similar no-action letters (the "Prior No-Action
Letters"), that the New Notes issued in exchange for Outstanding Notes pursuant
to the Exchange Offer may be offered for resale or resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Issuer or any Subsidiary Guarantor within the meaning of Rule
405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holders' business and that
such holders are not engaging in, do not intend to participate in and have no
arrangement or understanding with any person to participate in a distribution of
such New Notes. The SEC has not, however, considered an Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to an Exchange Offer as
in other circumstances.
The undersigned hereby further represents to the Issuer that (i) the New
Notes to be received are being acquired in the ordinary course of business of
the person receiving such New Notes, whether or not the undersigned, (ii)
neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of the
Outstanding Notes or the New Notes within the meaning of the Securities Act and
(iii) neither the holder nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of the Issuer or any Subsidiary Guarantor
or, if it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable. If the
undersigned is not a broker-dealer, the undersigned represents that it is not
engaged in, and does not intend to participate in, a distribution of New Notes.
If the undersigned is a broker-dealer that will receive New Notes for its own
account in exchange for Outstanding Notes, it represents that the New Notes are
being acquired by it as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes. By so acknowledging and by delivering a
Prospectus, however, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
5
<PAGE>
The undersigned acknowledges that if the undersigned is tendering
Outstanding Notes in the Exchange Offer with the intention of participating in
any manner in a distribution of the New Notes (i) the undersigned cannot rely on
the position of the staff of the SEC set forth in the Prior No-Action Letters
and, in the absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
the resale transaction of the New Notes, in which case the registration
statement must contain the selling security holder information required by Item
507 or Item 508, as applicable, of Regulation S-K of the SEC, and (ii) failure
to comply with such requirements in such instance could result in the
undersigned incurring liability for which the undersigned is not indemnified by
the Issuer.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Notes tendered hereby, including the transfer of such Outstanding Notes on the
account books maintained by the DTC.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Notes when, as and if the
Issuer gives oral or written notice thereof to the Exchange Agent. Any tendered
Outstanding Notes that are not accepted for exchange pursuant to the Exchange
Offer for any reason will be returned, without expense, to the undersigned at
the address shown below or at a different address as may be indicated herein
under "Special Delivery Instructions" as promptly as practicable after the
Expiration Date for such Exchange Offer.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives. This tender
may be withdrawn only in accordance with the procedures set forth in the section
of the Prospectus entitled "The Exchange Offers--Withdrawal of Tenders."
The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Notes pursuant to the procedures described under the
caption "The Exchange Offers--Procedures for Tendering" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer. The undersigned further agrees that acceptance of any tendered
Outstanding Notes by the Issuer and the issuance of New Notes in exchange
therefor shall constitute performance in full by the Issuer of their obligations
under the registration rights agreement and that the Issuer shall have no
further obligations or liabilities thereunder for the registration of the
Outstanding Notes or the New Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offers--Conditions to the Exchange
Offers." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Issuer), the Issuer may not be
required to exchange any of the Outstanding Notes tendered hereby. In such
event, the Outstanding Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the New Notes issued in exchange for the Outstanding Notes accepted
for exchange and return any Outstanding Notes not tendered or not exchanged, in
the name(s) of the undersigned (or, in the case of a book-entry delivery of
Outstanding Notes, please credit the account indicated above maintained at the
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail or deliver the New Notes issued in exchange for the
Outstanding Notes accepted for exchange and any Outstanding Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the undersigned
at the address shown below the undersigned's signature(s). In the event that
both "Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the New Notes issued in exchange for the Outstanding
Notes accepted for exchange in the name(s) of, and return any Outstanding Notes
not tendered or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Issuer has no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Outstanding
Notes from the name of the registered holder(s) thereof if the Issuer does not
accept for exchange any of the Outstanding Notes so tendered for exchange.
6
<PAGE>
<TABLE>
<S> <C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Outstanding Notes in a To be completed ONLY if Outstanding Notes in a
principal amount not tendered, or New Notes issued in principal amount not tendered, or New Notes issued, in
exchange for Outstanding Notes accepted for exchange for Outstanding Notes accepted for exchange,
exchange, are to be issued in the name of someone are to be mailed or delivered to someone other than the
other than the undersigned, or (ii) if Outstanding Notes undersigned, or to the undersigned at an address other
tendered by book-entry transfer which are not than that shown below the undersigned's signature.
exchanged are to be returned by credit to an account Mail or deliver New Notes and/or Old Notes to:
maintained at the DTC other than the DTC Account
Number set forth above. Issue New Notes and/or
Outstanding Notes to:
Name: Name:
------------------------------------------------------- ---------------------------------------------------
Address: Address:
---------------------------------------------------- ------------------------------------------------
- ------------------------------------------------------------ --------------------------------------------------------
(Include Zip Code) (Include Zip Code)
- ------------------------------------------------------------ --------------------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
(Please Type or Print) (Please Type or Print)
</TABLE>
[_] Credit unexchanged Outstanding Notes delivered by book-entry transfer to
the DTC account number set forth below:
DTC Account Number:
- --------------------------------------------------------------------------------
7
<PAGE>
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(Signature(s) of Registered Holder(s) of Outstanding Notes)
Dated ___________, 1999
(The above lines must be signed by the registered holder(s) of Outstanding Notes
as your name(s) appear(s) on the Outstanding Notes or on a security position
listing, or by person(s) authorized to become registered holder(s) by a properly
completed bond power from the registered holder(s), a copy of which must be
transmitted with this Letter of Transmittal. If Outstanding Notes to which this
Letter of Transmittal relate are held of record by two or more joint holders,
then all such holders must sign this Letter of Transmittal. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (i) set forth his or her full title below and (ii) unless
waived by the Issuer, submit evidence satisfactory to the Issuer of such
person's authority so to act. See Instruction 5 regarding the completion of
this Letter of Transmittal, printed below.)
Name(s):
-----------------------------------------------------------------------
(Please Type or Print)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------------
8
<PAGE>
MEDALLION SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Certain signatures must be guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an
Eligible Institution:
-----------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Address, Including Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: , 1999
-------------------------------------------------------------------
9
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES OR
AGENT'S MESSAGE AND BOOK-ENTRY CONFIRMATIONS. All physically delivered
Outstanding Notes or any confirmation of a book-entry transfer to the Exchange
Agent's account at the DTC of Outstanding Notes tendered by book-entry transfer
(a "Book-entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof (or an agent's message in
lieu hereof), and any other documents required by this Letter of Transmittal
must be received by the Exchange Agent at its address set forth herein on or
prior to 5:00 p.m., New York City time, on the Expiration Date for the Exchange
Offer, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Outstanding Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
THE METHOD OF DELIVERY OF THE TENDERED OUTSTANDING NOTES, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE
EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER
USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE ISSUER.
All questions as to the validity, form, eligibility (including time of
receipt) or acceptance of tendered Outstanding Notes and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which would, in the opinion of counsel for the
Issuer, be unlawful. The Issuer also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Outstanding Notes. The
Issuer's interpretation of the terms and conditions of an Exchange Offer
(including the instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Outstanding Notes must be cured within such time as
the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any
other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Outstanding Notes, nor shall any of
them incur any liability for failure to give such notification. Tenders of
Outstanding Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Outstanding Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders of Outstanding Notes, unless otherwise provided
in this Letter of Transmittal, as soon as practicable following the Expiration
Date. See "The Exchange Offers" section of the Prospectus.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their
Outstanding Notes and (a) whose Outstanding Notes are not immediately available,
or (b) who cannot deliver their Outstanding Notes, this Letter of Transmittal or
any other documents required hereby to the Exchange Agent prior to the
applicable Expiration Date or (c) who are unable to comply with the applicable
procedures under the DTC's Automated Tender Offer Program on a timely basis,
must tender their Outstanding Notes according to the guaranteed delivery
procedures set forth in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through a financial institution (including most banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Program or the Stock Exchanges Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution"); (ii) prior to
the applicable Expiration Date, the Exchange Agent must have received from the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) or a properly
transmitted agent's message and Notice of Guaranteed Delivery setting forth the
name and address of the holder of the Outstanding Notes, the registration
number(s) of such Outstanding Notes and the total principal amount of
Outstanding Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading days after such
Expiration Date, this Letter of Transmittal (or facsimile hereof or an agent's
message in lieu hereof) together with the Outstanding Notes in proper form for
transfer (or a Book-entry Confirmation) and any other documents required by this
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) this Letter of Transmittal (or a facsimile hereof or
an agent's message in lieu hereof) together with the certificates for all
physically tendered Outstanding Notes in proper form for transfer (or Book-entry
Confirmation, as the case may be) and all other
10
<PAGE>
documents required hereby are received by the Exchange Agent within five New
York Stock Exchange trading days after such Expiration Date.
Any holder of Outstanding Notes who wishes to tender Outstanding Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00
p.m., New York City time, on the applicable Expiration Date. Upon request of
the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who
wish to tender their Outstanding Notes according to the guaranteed delivery
procedures set forth above. See "The Exchange Offers--Guaranteed Delivery
Procedures" section of the prospectus.
3. TENDER BY HOLDER. Only a registered holder of Outstanding Notes may
tender such Outstanding Notes in the Exchange Offer. Any beneficial holder of
Outstanding Notes who is not the registered holder and who wishes to tender
should arrange with the registered holder to execute and deliver this Letter of
Transmittal on his behalf or must, prior to completing and executing this Letter
of Transmittal and delivering his Outstanding Notes, either make appropriate
arrangements to register ownership of the Outstanding Notes in such holder's
name or obtain a properly completed bond power from the registered holder.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). Tenders of Outstanding Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any
Outstanding Notes is tendered, the tendering holder should fill in the principal
amount tendered in the third column of the box entitled "Description of
Outstanding Notes Tendered" above. The entire principal amount of Outstanding
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Outstanding
Notes is not tendered, then Outstanding Notes for the principal amount of
Outstanding Notes not tendered and New Notes issued in exchange for any
Outstanding Notes accepted will be returned to the holder as promptly as
practicable after the Outstanding Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURES. If this Letter of Transmittal
(or facsimile hereof) is signed by the record holder(s) of the Outstanding Notes
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Outstanding Notes without alteration, enlargement or
any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is
signed by a participant in the DTC, the signature must correspond with the name
as it appears on the security position listing as the holder of the Outstanding
Notes.
If any tendered Outstanding Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter of Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder(s) of Outstanding Notes listed and tendered hereby and the New
Notes issued in exchange therefor are to be issued (or any untendered principal
amount of Outstanding Notes is to be reissued) to the registered holder(s), then
said holder(s) need not and should not endorse any tendered Outstanding Notes,
nor provide a separate bond power. In any other case, such holder(s) must
either properly endorse the Outstanding Notes tendered or transmit a properly
completed separate bond power with this Letter of Transmittal, with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Issuer, evidence satisfactory to the Issuer
of their authority to act must be submitted with this Letter of Transmittal.
NO SIGNATURE GUARANTEE IS REQUIRED IF (i) THIS LETTER OF TRANSMITTAL (OR
FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(S) OF THE OUTSTANDING NOTES
TENDERED HEREIN (OR BY A PARTICIPANT IN THE DTC WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE OWNER OF THE TENDERED OUTSTANDING NOTES) AND THE NEW
NOTES ARE TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(S) (OR, IF SIGNED BY A
PARTICIPANT IN THE DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT THE DTC) AND
NEITHER THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" NOR THE BOX
11
<PAGE>
ENTITLED "SPECIAL REGISTRATION INSTRUCTIONS" HAS BEEN COMPLETED, OR (ii) SUCH
OUTSTANDING NOTES ARE TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN
ALL OTHER CASES, ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE
HEREOF) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
Notes or substitute Outstanding Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated. Holders tendering
Outstanding Notes by book-entry transfer may request that Outstanding Notes not
exchanged be credited to such account maintained at the DTC as such noteholder
may designate hereon. If no such instructions are given, such Outstanding Notes
not exchanged will be returned to the name and address (or account number) of
the person signing this Letter of Transmittal.
7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Notes pursuant to an Exchange Offer.
If, however, New Notes or Outstanding Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered hereby, or if tendered Outstanding Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Outstanding Notes pursuant to an Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with this Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder and the Exchange Agent will retain possession of an amount
of Exchange Notes with a face amount at least equal to the amount of such
transfer taxes due by such tendering holder pending receipt by the Exchange
Agent of the amount of such taxes.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a
holder of any Outstanding Notes or New Notes must provide the Issuer (as payor)
with its correct taxpayer identification number ("TIN"), which, in the case of a
holder who is an individual is his or her social security number. If the Issuer
is not provided with the correct TIN, the holder or payee may be subject to a
$50 penalty imposed by Internal Revenue Service and backup withholding of 31% on
interest payments on the New Notes.
To prevent backup withholding, each tendering holder and each prospective
holder must provide such holder's correct TIN by completing the Substitute Form
W-9 set forth herein, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN), and that (i) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified the holder that such holder is no longer subject to
backup withholding. If the New Notes will be registered in more than one name
or will not be in the name of the actual owner, consult the instructions on
Internal Revenue Service Form W-9, which may be obtained from the Exchange
Agent, for information on which TIN to report.
Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8, signed under
penalties of perjury, attesting to their foreign status. A Form W-8 can be
obtained from the Exchange Agent.
If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Issuer within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Issuer.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligations regarding backup
withholding.
12
<PAGE>
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which might, in the opinion of the Issuer or
its counsel, be unlawful. The Issuer also reserves the absolute right to waive
any conditions of an Exchange Offer or defects or irregularities of tenders as
to particular Outstanding Notes. The Issuer's interpretation of the terms and
conditions of an Exchange Offer (including this Letter of Transmittal and the
instructions hereto) shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Outstanding Notes
must be cured within such time as the Issuer shall determine. Neither the
Issuer, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Outstanding
Notes nor shall any of them incur any liability for failure to give such
notification.
10. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to
waive, in whole or part, any of the conditions to an Exchange Offer set forth in
the Prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or
contingent tender of Outstanding Notes will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. Any holder
whose Outstanding Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, stolen or destroyed
Outstanding Notes have been followed.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning an Exchange Offer.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offers--Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR
AN AGENT'S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE OUTSTANDING NOTES
DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED
BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
13
<PAGE>
<TABLE>
<CAPTION>
Substitute Part 1 -- Please Provide Your Tin in the Box at Right _______________________________
Form W-9 and Certify By Signing and Dating Below Social Security Number
or
______________________________
Employer Identification number
- -----------------------------------------------------------------------------------------------------------------------------------
Part 2 -- Certification -- Under penalties of Part 3 --
perjury, I certify that:
<S> <C> <C>
(1) The number shown on this form is my correct Awaiting TIN [_]
Taxpayer Identification Number (or I have checked the
box in part 3 and executed the certificate of
awaiting taxpayer identification number below) and
(2) I am not subject to back withholding either Please Complete the Certificate of Awaiting
- ----------------------------- because I have not been notified by the Internal Taxpayer Identification Number below.
Name Revenue Service ("IRS") that I am subject to backup
withholding as a result of failure to report all
- ----------------------------- interest or dividends, or because the IRS has
Address (Number and Street) notified me that I am no longer subject to backup
withholding.
- -----------------------------
City, State and Zip Code
------------------------------------------------------------------------------------------------------
Department of the Treasury
Internal Revenue Service
---------------------------------------------------------
Payor's Request for Taxpayer Certificate Instructions -- You must cross out item (2) in Part 2 above if you have been notified by
Identification Number (TIN) the IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you are subject to backup
withholding you received another notification from the IRS stating that you are no longer subject to
backup withholding, do not cross out item (2).
SIGNATURE_________________________________ DATE ________________________, 1999
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to the payor within 60 days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
, 1999
- ------------------------------------ ----------------------
Signature Date
14
<PAGE>
EXHIBIT 99.12
LYONDELL CHEMICAL COMPANY
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
IN EXCHANGE FOR REGISTERED
10 7/8% SENIOR SUBORDINATED
NOTES DUE 2009
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
____________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES
TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE FOR THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed and submitted to the Exchange Agent:
THE BANK OF NEW YORK
By Courier: By Mail (registered or By Hand:
certified mail recommended):
The Bank of New York The Bank of New York 101 Barclay St.
101 Barclay St. 101 Barclay St., Floor 7E Corporate Trust
Corporate Trust New York, NY 10286 Services Window
Services Window Attn: Reorg. Dept. Ground Level
Ground Level New York, NY 10286
New York, NY 10286 Attn: Reorg. Dept.
Attn: Reorg. Dept.
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
212-815-4699
Attn: ________________________
Confirm by telephone:
(212) 815-2742
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SHOWN ABOVE OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
(212) 815-2742.
<PAGE>
The undersigned hereby acknowledges receipt and review of the prospectus
dated _________ , 1999 (the "Prospectus") of Lyondell Chemical Company (the
"Issuer"), Lyondell Chemical Worldwide, Inc. and Lyondell Chemical Nederland,
Ltd. (each a "Subsidiary Guarantor") and this Letter of Transmittal which
together constitute the Issuer's offer to exchange (the "Exchange Offer")
10 7/8% Senior Subordinated Notes Due 2009 (the "New Notes"), the issuance of
which has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for a like principal amount of issued and outstanding
unregistered 10 7/8% Senior Subordinated Notes Due 2009 (the "Outstanding
Notes"). Capitalized terms used but not defined herein have the respective
meanings given to them in the Prospectus.
The Issuer reserves the right, at any time or from time to time, to extend
the period of time during which the Exchange Offer for the Outstanding Notes is
open, at its discretion, in which event the term "Expiration Date" shall mean
the latest date to which such Exchange Offer is extended. The Issuer reserves
the right to extend such period independently of any other Exchange Offer. The
Issuer shall notify The Bank of New York (the "Exchange Agent") of any extension
by oral or written notice and shall make a public announcement thereof no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
Registered Holders of Exchange Notes on the relevant record date for the
first interest payment date following the consummation of an Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid on the Outstanding Notes or, if no interest has been paid, from ________,
1999. Outstanding Notes accepted for exchange will cease to accrue interest from
and after the date of consummation of an Exchange Offer. Holders whose
Outstanding Notes are accepted for exchange will not receive any payment in
respect of accrued interest on such Outstanding Notes otherwise payable on any
interest payment date the record date for which occurs on or after consummation
of an Exchange Offer.
This Letter of Transmittal is to be used by a holder of Outstanding Notes
(i) if certificates of Outstanding Notes are to be forwarded herewith or (ii) if
delivery of Outstanding Notes is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"DTC") pursuant to the procedures set forth in the Prospectus under the caption
"The Exchange Offers--Book-entry Transfer" and an "agent's message" is not
delivered as described in the Prospectus under the caption "The Exchange
Offers--Procedures for Tendering--Tendering Through DTC's Automated Tender Offer
Program." Tenders by book-entry transfer may also be made by delivering an
agent's message in lieu of this Letter of Transmittal. Holders of Outstanding
Notes whose Outstanding Notes are not immediately available, or who are unable
to deliver their Outstanding Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent on or prior to the Expiration
Date for the Exchange Offer, or who are unable to complete the procedure for
book-entry transfer on a timely basis, must tender their Outstanding Notes
according to the guaranteed delivery procedures set forth in the prospectus
under the caption "The Exchange Offers--Guaranteed Delivery Procedures." See
Instruction 2 of this Letter of Transmittal. DELIVERY OF DOCUMENTS TO THE BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to an Exchange Offer for Outstanding Notes
means any person in whose name such Outstanding Notes are registered on the
books of Lyondell Chemical Company, any person who holds such Outstanding Notes
and has obtained a properly completed bond power from the registered holder or
any participant in the DTC system whose name appears on a security position
listing as the holder of such Outstanding Notes and who desires to deliver the
Outstanding Notes by book-entry transfer at DTC. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to such Exchange Offer. Holders who
wish to tender their Outstanding Notes must complete this Letter of Transmittal
in its entirety (unless such Outstanding Notes are to be tendered by book-entry
transfer and an agent's message is delivered in lieu hereof).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF
TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE
DIRECTED TO THE EXCHANGE AGENT AT THE TELEPHONE NUMBER LISTED ABOVE.
<PAGE>
List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space below is inadequate, list the title, registered numbers
and principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
<TABLE>
<CAPTION>
DESCRIPTION OF OUTSTANDING NOTES TENDERED
- ------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s) Exactly as
Name(s) Outstanding Note(s) Tendered
Appear(s) on Outstanding Notes
(Please Fill In, If Blank)
- ------------------------------------------------------------------------------------------------------
Title of Registered Aggregate Principal Principal
Series Number(s)* Amount Amount
Represented Tendered**
by Note(s)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lyondell
Chemical
Company
10 7/8%
Senior
Subordinated
Notes Due
2009
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Outstanding Notes will be
deemed to have tendered the entire aggregate principal amount represented by
such Outstanding Notes. All tenders must be in integral multiples of $1,000.
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH.
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering
Institution:
--------------------------------------------------------------------
Book-entry Facility Account
Number(s):
----------------------------------------------------------------------
Transaction Code
Number(s):
----------------------------------------------------------------------
3
<PAGE>
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OUTSTANDING NOTES ARE
BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED) (FOR
USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s)
of Outstanding Notes:
-----------------------------------------------------------
Date of Execution of Notice of
Guaranteed Delivery:
------------------------------------------------------------
Window Ticket Number
(if available):
-----------------------------------------------------------------
Name of Eligible Institution that
Guaranteed Delivery:
------------------------------------------------------------
DTC Account Number(s) (if delivered
by book-entry transfer):
--------------------------------------------------------
Transaction Code Number (if delivered
by book-entry transfer):
--------------------------------------------------------
Name of Tendering Institution (if
delivered by book-entry transfer):
----------------------------------------------
[_] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY
CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY).
[_] CHECK HERE AND COMPLETE THE FOLLOWING IF YOU ARE A BROKER-DEALER AND WISH
TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to participate in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Outstanding Notes, it represents that the
New Notes are acquired as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes; however, by so acknowledging and by
delivering a Prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
4
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
Subject to the terms and conditions of the applicable Exchange Offer, the
undersigned hereby tenders to the Issuer for exchange the principal amount of
Outstanding Notes indicated above. Subject to and effective upon the acceptance
for exchange of the principal amount of Outstanding Notes tendered in accordance
with this Letter of Transmittal, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Issuer all right, title and interest in
and to the Outstanding Notes tendered for exchange hereby, including all rights
to accrued and unpaid interest thereon as of the Expiration Date. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent the
true and lawful agent and attorney-in-fact for the undersigned (with full
knowledge that said Exchange Agent also acts as the agent for the Issuer in
connection with the Exchange Offer) with respect to the tendered Outstanding
Notes with full power of substitution to (i) deliver such Outstanding Notes, or
transfer ownership of such Outstanding Notes on the account books maintained by
the DTC, to the Issuer and deliver all accompanying evidences of transfer and
authenticity, and (ii) present such Outstanding Notes for transfer on the books
of the Issuer and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Outstanding Notes, all in accordance with the terms
of the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Notes tendered hereby and to acquire the New Notes issuable upon the
exchange of such tendered Outstanding Notes, and that the Issuer will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
accepted for exchange by the Issuer as contemplated herein.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available April 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Shearman & Sterling
(available July 2, 1993) and similar no-action letters (the "Prior No-Action
Letters"), that the New Notes issued in exchange for Outstanding Notes pursuant
to the Exchange Offer may be offered for resale or resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Issuer or any Subsidiary Guarantor within the meaning of Rule
405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holders' business and that
such holders are not engaging in, do not intend to participate in and have no
arrangement or understanding with any person to participate in a distribution of
such New Notes. The SEC has not, however, considered an Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the SEC would make a similar determination with respect to an Exchange Offer as
in other circumstances.
The undersigned hereby further represents to the Issuer that (i) the New
Notes to be received are being acquired in the ordinary course of business of
the person receiving such New Notes, whether or not the undersigned, (ii)
neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of the
Outstanding Notes or the New Notes within the meaning of the Securities Act and
(iii) neither the holder nor any such other person is an "affiliate," as defined
in Rule 405 under the Securities Act, of the Issuer or any Subsidiary Guarantor
or, if it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable. If the
undersigned is not a broker-dealer, the undersigned represents that it is not
engaged in, and does not intend to participate in, a distribution of New Notes.
If the undersigned is a broker-dealer that will receive New Notes for its own
account in exchange for Outstanding Notes, it represents that the New Notes are
being acquired by it as a result of market-making activities or other trading
activities and it acknowledges that it will deliver a Prospectus in connection
with any resale of such New Notes. By so acknowledging and by delivering a
Prospectus, however, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
5
<PAGE>
The undersigned acknowledges that if the undersigned is tendering
Outstanding Notes in the Exchange Offer with the intention of participating in
any manner in a distribution of the New Notes (i) the undersigned cannot rely on
the position of the staff of the SEC set forth in the Prior No-Action Letters
and, in the absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
the resale transaction of the New Notes, in which case the registration
statement must contain the selling security holder information required by Item
507 or Item 508, as applicable, of Regulation S-K of the SEC, and (ii) failure
to comply with such requirements in such instance could result in the
undersigned incurring liability for which the undersigned is not indemnified by
the Issuer.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment and transfer of the Outstanding
Notes tendered hereby, including the transfer of such Outstanding Notes on the
account books maintained by the DTC.
For purposes of the Exchange Offer, the Issuer shall be deemed to have
accepted for exchange validly tendered Outstanding Notes when, as and if the
Issuer gives oral or written notice thereof to the Exchange Agent. Any tendered
Outstanding Notes that are not accepted for exchange pursuant to the Exchange
Offer for any reason will be returned, without expense, to the undersigned at
the address shown below or at a different address as may be indicated herein
under "Special Delivery Instructions" as promptly as practicable after the
Expiration Date for such Exchange Offer.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives. This tender
may be withdrawn only in accordance with the procedures set forth in the section
of the Prospectus entitled "The Exchange Offers--Withdrawal of Tenders."
The undersigned acknowledges that the Issuer's acceptance of properly
tendered Outstanding Notes pursuant to the procedures described under the
caption "The Exchange Offers--Procedures for Tendering" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer. The undersigned further agrees that acceptance of any tendered
Outstanding Notes by the Issuer and the issuance of New Notes in exchange
therefor shall constitute performance in full by the Issuer of their obligations
under the registration rights agreement and that the Issuer shall have no
further obligations or liabilities thereunder for the registration of the
Outstanding Notes or the New Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offers-- Conditions to the Exchange
Offers." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Issuer), the Issuer may not be
required to exchange any of the Outstanding Notes tendered hereby. In such
event, the Outstanding Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the New Notes issued in exchange for the Outstanding Notes accepted
for exchange and return any Outstanding Notes not tendered or not exchanged, in
the name(s) of the undersigned (or, in the case of a book-entry delivery of
Outstanding Notes, please credit the account indicated above maintained at the
DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail or deliver the New Notes issued in exchange for the
Outstanding Notes accepted for exchange and any Outstanding Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the undersigned
at the address shown below the undersigned's signature(s). In the event that
both "Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the New Notes issued in exchange for the Outstanding
Notes accepted for exchange in the name(s) of, and return any Outstanding Notes
not tendered or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Issuer has no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Outstanding
Notes from the name of the registered holder(s) thereof if the Issuer does not
accept for exchange any of the Outstanding Notes so tendered for exchange.
6
<PAGE>
<TABLE>
<CAPTION>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
<S> <C>
To be completed ONLY (i) if Outstanding Notes in a To be completed ONLY if Outstanding Notes in a
principal amount not tendered, or New Notes issued in principal amount not tendered, or New Notes issued, in
exchange for Outstanding Notes accepted for exchange for Outstanding Notes accepted for exchange,
exchange, are to be issued in the name of someone are to be mailed or delivered to someone other than the
other than the undersigned, or (ii) if Outstanding Notes undersigned, or to the undersigned at an address other
tendered by book-entry transfer which are not than that shown below the undersigned's signature.
exchanged are to be returned by credit to an account Mail or deliver New Notes and/or Old Notes to:
maintained at the DTC other than the DTC Account
Number set forth above. Issue New Notes and/or
Outstanding Notes to:
Name: Name:
------------------------------------------------------- ---------------------------------------------------
Address: Address:
---------------------------------------------------- ------------------------------------------------
- ------------------------------------------------------------ --------------------------------------------------------
(Include Zip Code) (Include Zip Code)
- ------------------------------------------------------------ --------------------------------------------------------
(Tax Identification or Social Security Number) (Tax Identification or Social Security Number)
(Please Type or Print) (Please Type or Print)
</TABLE>
[_] Credit unexchanged Outstanding Notes delivered by book-entry transfer to
the DTC account number set forth below:
DTC Account Number:
-------------------------------------------------------------
7
<PAGE>
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(Signature(s) of Registered Holder(s) of Outstanding Notes)
Dated ___________, 1999
(The above lines must be signed by the registered holder(s) of Outstanding Notes
as your name(s) appear(s) on the Outstanding Notes or on a security position
listing, or by person(s) authorized to become registered holder(s) by a properly
completed bond power from the registered holder(s), a copy of which must be
transmitted with this Letter of Transmittal. If Outstanding Notes to which this
Letter of Transmittal relate are held of record by two or more joint holders,
then all such holders must sign this Letter of Transmittal. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (i) set forth his or her full title below and (ii) unless
waived by the Issuer, submit evidence satisfactory to the Issuer of such
person's authority so to act. See Instruction 5 regarding the completion of
this Letter of Transmittal, printed below.)
Name(s):
------------------------------------------------------------------------
(Please Type or Print)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------------
8
<PAGE>
MEDALLION SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Certain signatures must be guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an
Eligible Institution:
----------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Address, Including Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: , 1999
-------------------------------------------------------------------
9
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES OR
AGENT'S MESSAGE AND BOOK-ENTRY CONFIRMATIONS. All physically delivered
Outstanding Notes or any confirmation of a book-entry transfer to the Exchange
Agent's account at the DTC of Outstanding Notes tendered by book-entry transfer
(a "Book-entry Confirmation"), as well as a properly completed and duly executed
copy of this Letter of Transmittal or facsimile hereof (or an agent's message in
lieu hereof), and any other documents required by this Letter of Transmittal
must be received by the Exchange Agent at its address set forth herein on or
prior to 5:00 p.m., New York City time, on the Expiration Date for the Exchange
Offer, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Outstanding Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
THE METHOD OF DELIVERY OF THE TENDERED OUTSTANDING NOTES, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE
EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER
USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE ISSUER.
All questions as to the validity, form, eligibility (including time of
receipt) or acceptance of tendered Outstanding Notes and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which would, in the opinion of counsel for the
Issuer, be unlawful. The Issuer also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Outstanding Notes. The
Issuer's interpretation of the terms and conditions of an Exchange Offer
(including the instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Outstanding Notes must be cured within such time as
the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any
other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Outstanding Notes, nor shall any of
them incur any liability for failure to give such notification. Tenders of
Outstanding Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Outstanding Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders of Outstanding Notes, unless otherwise provided
in this Letter of Transmittal, as soon as practicable following the Expiration
Date. See "The Exchange Offers" section of the Prospectus.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their
Outstanding Notes and (a) whose Outstanding Notes are not immediately available,
or (b) who cannot deliver their Outstanding Notes, this Letter of Transmittal or
any other documents required hereby to the Exchange Agent prior to the
applicable Expiration Date or (c) who are unable to comply with the applicable
procedures under the DTC's Automated Tender Offer Program on a timely basis,
must tender their Outstanding Notes according to the guaranteed delivery
procedures set forth in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through a financial institution (including most banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Program or the Stock Exchanges Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution"); (ii) prior to
the applicable Expiration Date, the Exchange Agent must have received from the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) or a properly
transmitted agent's message and Notice of Guaranteed Delivery setting forth the
name and address of the holder of the Outstanding Notes, the registration
number(s) of such Outstanding Notes and the total principal amount of
Outstanding Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading days after such
Expiration Date, this Letter of Transmittal (or facsimile hereof or an agent's
message in lieu hereof) together with the Outstanding Notes in proper form for
transfer (or a Book-entry Confirmation) and any other documents required by this
Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent; and (iii) this Letter of Transmittal (or a facsimile hereof or
an agent's message in lieu hereof) together with the certificates for all
physically tendered Outstanding Notes in proper form for transfer (or Book-entry
Confirmation, as the case may be) and all other
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<PAGE>
documents required hereby are received by the Exchange Agent within five New
York Stock Exchange trading days after such Expiration Date.
Any holder of Outstanding Notes who wishes to tender Outstanding Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00
p.m., New York City time, on the applicable Expiration Date. Upon request of
the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who
wish to tender their Outstanding Notes according to the guaranteed delivery
procedures set forth above. See "The Exchange Offers--Guaranteed Delivery
Procedures" section of the prospectus.
3. TENDER BY HOLDER. Only a registered holder of Outstanding Notes may
tender such Outstanding Notes in the Exchange Offer. Any beneficial holder of
Outstanding Notes who is not the registered holder and who wishes to tender
should arrange with the registered holder to execute and deliver this Letter of
Transmittal on his behalf or must, prior to completing and executing this Letter
of Transmittal and delivering his Outstanding Notes, either make appropriate
arrangements to register ownership of the Outstanding Notes in such holder's
name or obtain a properly completed bond power from the registered holder.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). Tenders of Outstanding Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any
Outstanding Notes is tendered, the tendering holder should fill in the principal
amount tendered in the third column of the box entitled "Description of
Outstanding Notes Tendered" above. The entire principal amount of Outstanding
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Outstanding
Notes is not tendered, then Outstanding Notes for the principal amount of
Outstanding Notes not tendered and New Notes issued in exchange for any
Outstanding Notes accepted will be returned to the holder as promptly as
practicable after the Outstanding Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURES. If this Letter of Transmittal
(or facsimile hereof) is signed by the record holder(s) of the Outstanding Notes
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Outstanding Notes without alteration, enlargement or
any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is
signed by a participant in the DTC, the signature must correspond with the name
as it appears on the security position listing as the holder of the Outstanding
Notes.
If any tendered Outstanding Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter of Transmittal.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder(s) of Outstanding Notes listed and tendered hereby and the New
Notes issued in exchange therefor are to be issued (or any untendered principal
amount of Outstanding Notes is to be reissued) to the registered holder(s), then
said holder(s) need not and should not endorse any tendered Outstanding Notes,
nor provide a separate bond power. In any other case, such holder(s) must
either properly endorse the Outstanding Notes tendered or transmit a properly
completed separate bond power with this Letter of Transmittal, with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Notes or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and, unless waived by the Issuer, evidence satisfactory to the Issuer
of their authority to act must be submitted with this Letter of Transmittal.
NO SIGNATURE GUARANTEE IS REQUIRED IF (i) THIS LETTER OF TRANSMITTAL (OR
FACSIMILE HEREOF) IS SIGNED BY THE REGISTERED HOLDER(S) OF THE OUTSTANDING NOTES
TENDERED HEREIN (OR BY A PARTICIPANT IN THE DTC WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE OWNER OF THE TENDERED OUTSTANDING NOTES) AND THE NEW
NOTES ARE TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(S) (OR, IF SIGNED BY A
PARTICIPANT IN THE DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT THE DTC) AND
NEITHER THE BOX ENTITLED "SPECIAL DELIVERY INSTRUCTIONS" NOR THE BOX
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<PAGE>
ENTITLED "SPECIAL REGISTRATION INSTRUCTIONS" HAS BEEN COMPLETED, OR (ii) SUCH
OUTSTANDING NOTES ARE TENDERED FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. IN
ALL OTHER CASES, ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL (OR FACSIMILE
HEREOF) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
Notes or substitute Outstanding Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated. Holders tendering
Outstanding Notes by book-entry transfer may request that Outstanding Notes not
exchanged be credited to such account maintained at the DTC as such noteholder
may designate hereon. If no such instructions are given, such Outstanding Notes
not exchanged will be returned to the name and address (or account number) of
the person signing this Letter of Transmittal.
7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Notes pursuant to an Exchange Offer.
If, however, New Notes or Outstanding Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Outstanding Notes tendered hereby, or if tendered Outstanding Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Outstanding Notes pursuant to an Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with this Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder and the Exchange Agent will retain possession of an amount
of Exchange Notes with a face amount at least equal to the amount of such
transfer taxes due by such tendering holder pending receipt by the Exchange
Agent of the amount of such taxes.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a
holder of any Outstanding Notes or New Notes must provide the Issuer (as payor)
with its correct taxpayer identification number ("TIN"), which, in the case of a
holder who is an individual is his or her social security number. If the Issuer
is not provided with the correct TIN, the holder or payee may be subject to a
$50 penalty imposed by Internal Revenue Service and backup withholding of 31% on
interest payments on the New Notes.
To prevent backup withholding, each tendering holder and each prospective
holder must provide such holder's correct TIN by completing the Substitute Form
W-9 set forth herein, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN), and that (i) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified the holder that such holder is no longer subject to
backup withholding. If the New Notes will be registered in more than one name
or will not be in the name of the actual owner, consult the instructions on
Internal Revenue Service Form W-9, which may be obtained from the Exchange
Agent, for information on which TIN to report.
Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8, signed under
penalties of perjury, attesting to their foreign status. A Form W-8 can be
obtained from the Exchange Agent.
If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Issuer within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Issuer.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligations regarding backup
withholding.
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<PAGE>
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of tendered
Outstanding Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the absolute right
to reject any and all Outstanding Notes not properly tendered or any Outstanding
Notes the Issuer's acceptance of which might, in the opinion of the Issuer or
its counsel, be unlawful. The Issuer also reserves the absolute right to waive
any conditions of an Exchange Offer or defects or irregularities of tenders as
to particular Outstanding Notes. The Issuer's interpretation of the terms and
conditions of an Exchange Offer (including this Letter of Transmittal and the
instructions hereto) shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Outstanding Notes
must be cured within such time as the Issuer shall determine. Neither the
Issuer, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Outstanding
Notes nor shall any of them incur any liability for failure to give such
notification.
10. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to
waive, in whole or part, any of the conditions to an Exchange Offer set forth in
the Prospectus.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or
contingent tender of Outstanding Notes will be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. Any holder
whose Outstanding Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, stolen or destroyed
Outstanding Notes have been followed.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning an Exchange Offer.
14. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offers--Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR
AN AGENT'S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE OUTSTANDING NOTES
DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED
BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.
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<TABLE>
<CAPTION>
Substitute Part 1 -- Please Provide Your Tin in the Box at Right _______________________________
Form W-9 and Certify By Signing and Dating Below Social Security Number
or
______________________________
Employer Identification number
- -----------------------------------------------------------------------------------------------------------------------------------
Part 2 -- Certification -- Under penalties of PART 3--
perjury, I certify that:
<S> <C> <C>
(1) The number shown on this form is my correct Awaiting TIN [_]
Taxpayer Identification Number (or I have checked the
box in part 3 and executed the certificate of
awaiting taxpayer identification number below) and
- ----------------------------- (2) I am not subject to back withholding either Please Complete the Certificate of Awaiting
Name because I have not been notified by the Internal Taxpayer Identification Number below.
Revenue Service ("IRS") that I am subject to backup
- ----------------------------- withholding as a result of failure to report all
Address (Number and Street) interest or dividends, or because the IRS has
notified me that I am no longer subject to backup
- ----------------------------- withholding.
City, State and Zip Code
Department of the Treasury
Internal Revenue Service
Payor's Request for Taxpayer Certificate Instructions -- You must cross out item (2) in Part 2 above if you have been notified by
Identification Number (TIN) the IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you are subject to backup
withholding you received another notification from the IRS stating that you are no longer subject to
backup withholding, do not cross out item (2).
SIGNATURE_________________________________ DATE ________________________, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU WITH RESPECT TO THE NEW NOTES.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number to the payor within 60 days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
- --------------------------------- --------------------, 1999
Signature Date
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