EXHIBIT 2.3
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AMENDED AND RESTATED MASTER ASSET AND STOCK PURCHASE
AGREEMENT, dated as of March 31, 2000, among LYONDELL CHEMICAL
COMPANY, a Delaware corporation ("Lyondell"), the entities set
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forth on Schedule I (the "Lyondell Selling Subsidiaries"), BAYER
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AG, a German corporation ("▇▇▇▇▇ ▇▇") and ▇▇▇▇▇ CORPORATION, an
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Indiana corporation ("Bayer Corp." and, together with ▇▇▇▇▇ ▇▇,
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"Purchaser").
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Lyondell and the Lyondell Selling Subsidiaries desire to sell to
Purchaser and the Purchaser Designees, and Purchaser and the Purchaser Designees
desire to purchase from Lyondell and the Lyondell Selling Subsidiaries, certain
assets and liabilities of the Polyols Business of Lyondell upon the terms and
subject to the conditions of this Amended and Restated Master Asset and Stock
Purchase Agreement, as amended and supplemented from time to time in accordance
with the terms hereof (this "Agreement").
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Accordingly, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of Acquired Assets and Acquired Shares
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SECTION 1.01. Purchase and Sale. On the terms and subject to the
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conditions of this Agreement, at the Closing, Lyondell and the Lyondell Selling
Subsidiaries shall sell, assign, transfer, convey and deliver free and clear of
any Liens (other than Permitted Liens) to Purchaser or such direct or indirect
Affiliates of Purchaser as Purchaser designates (any such designated Affiliates,
a "Purchaser Designee"), and Purchaser and the Purchaser Designees shall
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purchase from Lyondell and the Lyondell Selling Subsidiaries all the right,
title and interest as of the Closing of Lyondell and the Lyondell Selling
Subsidiaries in, to and under the Acquired Assets and the Acquired Shares, for
(i) an aggregate purchase price of $____________ (the "Polyols Business Purchase
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Price"), payable as set forth in Section 2.02 and subject to adjustment as set
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forth in Section 1.05 resulting in an Estimated Polyols Business Purchase Price
of $___________ and (ii) the assumption of the Assumed Liabilities. The purchase
and sale of the Acquired Assets and the Acquired Shares and the assumption of
the Assumed Liabilities is referred to in this Agreement as the "Polyols
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Acquisition".
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SECTION 1.02. Acquired Assets and Excluded Assets. (a) The term
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"Acquired Assets" means all the business, properties, assets, goodwill and
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rights of Lyondell and the Lyondell Selling Subsidiaries of whatever kind and
nature, real or personal, tangible or intangible, that are owned, leased or
licensed by Lyondell or the Lyondell Selling Subsidiaries on the Closing Date
and used or held for use primarily in the operation or conduct of the Polyols
Business, other than the Excluded Assets (as defined in Section 1.02(b)),
including:
(i) all real property, leaseholds and other interests in real
property of Lyondell or the Lyondell Selling Subsidiaries listed in
Schedule 1.02(a)(i), in each case together with Lyondell's and the Lyondell
Selling Subsidiaries's right, title and interest in all buildings,
improvements and fixtures thereon and all appurtenances thereto;
(ii) all PO and other raw materials, work-in-process, finished goods,
supplies, parts, spare parts (with respect to spare parts located in common
stores, those spare parts dedicated by number or otherwise marked or
identified for the Polyols Business) and other inventories, in each case,
of Lyondell or the Lyondell Selling Subsidiaries (including such items in
transit, on consignment or in the possession of any third party) on the
Closing Date that are used or held for use primarily in the operation or
conduct of the Polyols Business; provided, that with respect to PO, only in
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a quantity equivalent to the amount purchasable with the dollar amount
included on the 1998 Working Capital Statement under "PO and other RM
inventory" (which represents approximately 30 days' worth of PO); provided,
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further, that common stores materials, supplies and spare parts will be
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included, but only to the extent reflected in the Closing Working Capital
Statement (collectively, all such items, the "Inventory");
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(iii) all other tangible personal property and interests therein,
including all machinery, equipment, furniture, furnishings and vehicles
(including railroad cars and other transportation-related equipment and
facilities and Polyols storage tanks), of Lyondell or the Lyondell Selling
Subsidiaries that are used or held for use primarily in the operation or
conduct of the Polyols Business, including the items set forth in Schedule
1.02(a)(iii) (the "Personal Property");
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(iv) all accounts receivable of Lyondell or the Lyondell Selling
Subsidiaries on the Closing Date that are included in "Account receivables-
direct" under the Closing Working Capital Statement (the "Included
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Receivables"), but not including those account receivables that are
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included in "Account receivables-indirect" under the Closing Working
Capital Statement (the "Excluded Receivables");
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(v) all patents (including all reissues, divisions, continuations
and extensions thereof), patent applications, patent rights, trademarks,
trademark registrations, trademark applications, servicemarks, trade names,
business names, brand names, copyrights, copyright registrations, designs,
design registrations, and all rights to any of the foregoing ("Intellectual
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Property"), of Lyondell or the Lyondell Selling Subsidiaries that are used
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or held for use primarily in the operation or conduct of the Polyols
Business, including the items set forth in Schedule 1.02(a)(v) (such
Intellectual Property being the "Assigned Intellectual Property");
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(vi) all trade secrets, confidential information, inventions, know-
how, formulae, processes, procedures, research records, records of
inventions, test information, market surveys and marketing know-how of
Lyondell or the Lyondell Selling Subsidiaries that are used or held for use
primarily in the operation or conduct of the Polyols Business, including
those relating to the Impact Technology (the "Technology");
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(vii) all Permits of Lyondell or the Lyondell Selling Subsidiaries
that are used or held for use primarily in the operation or conduct of the
Polyols Business (the "Assigned Permits"), except for such Permits that
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Lyondell and Purchaser agree are to be retained by Lyondell or the Lyondell
Selling Subsidiaries (the "Retained Permits") and those Permits listed on
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Part III of Schedule 1.02(a)(vii) (a list of material Permits is set forth
in Part I of Schedule 1.02(a)(vii) and a list of proposed material Retained
Permits is set forth in Part II of Schedule 1.02(a)(vii));
(viii) all contracts, leases, subleases, licenses, indentures,
agreements, commitments and all other legally binding arrangements, whether
oral or written ("Contracts") to which Lyondell or the Lyondell Selling
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Subsidiaries is a party or by which Lyondell or the Lyondell Selling
Subsidiaries is bound, including those that are used or held for use solely
in, or that arise
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solely out of, the operation or conduct of the Polyols Business and those
related primarily (but not solely) to the Polyols Business and in part
related to other businesses of Lyondell but only to the extent such
Contracts are related to the Polyols Business (the "Assigned Contracts");
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(ix) the Acquired Shares and all partnership interests or any other
equity interests in any partnership, corporation, company, limited
liability company, joint venture, trust or other business association
listed in Schedule 1.02(a)(ix) ("Investments");
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(x) all credits, prepaid expenses, deferred charges, advance
payments, security deposits and prepaid items that are used or held for use
primarily in, or that arise primarily out of, the operation or conduct of
the Polyols Business;
(xi) all rights, claims and credits to the extent relating to any
Acquired Asset or any Assumed Liability, including any such items arising
under insurance policies, guarantees, warranties, indemnities and similar
rights in favor of Lyondell or the Lyondell Selling Subsidiaries, but
excluding any claims for Losses incurred prior to the Closing Date by
Lyondell or a Lyondell Selling Subsidiary arising in respect of an Acquired
Asset and any reimbursements under insurance policies for Losses incurred
by Lyondell or a Lyondell Selling Subsidiary prior to the Closing, in each
case, other than Included Receivables;
(xii) all originals or, to the extent Lyondell is required to keep
originals pursuant to Applicable Law, copies of all books of account,
ledgers, general, financial, accounting and personnel records, files,
invoices, customers' and suppliers' lists, other distribution lists,
billing records, sales and promotional literature, manuals, engineering and
design documents, schematic, architectural and other drawings and surveys,
customer and supplier correspondence (in all cases, in any form or medium,
including electronic files) of Lyondell or the Lyondell Selling
Subsidiaries that are used or held for use primarily in the conduct or
operation of the Polyols Business, including P-I Diagrams, equipment files,
inspection reports, equipment design sheets, maintenance record files,
repair reports, job plans, process control documentation, operating
procedures, production recipes, production planning software and models,
logistic files and records, training records, safety records, process
models,
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material and energy balances, engineering software and software interfaces,
thermodynamic data, material property data and engineering and process
technology files for planned and future projects, including debottlenecking
and expansion projects (the "Records");
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(xiii) the Polyols storage tanks at the Institute facility in West
Virginia numbered 1504, 1505, 1523, 1527, 1528 and 1531 through 34 and all
associated piping, pumps, exchangers and insulation; the idle steam boiler
at the Taiwan facility; and, except as described in Section 1.02(b), all
Obsolete Assets, Abandoned Assets and Idle Assets located on the Polyols
Business Property;
(xiv) cash and cash equivalents held in the accounts of the Asian
Companies;
(xv) to the extent required by Applicable Law or as provided in
Section 4.08(f), assets of the Foreign Plans;
(xvi) all goodwill generated by or associated with the Polyols
Business; and
(xvii) all insurance policies (x) held directly by any Asian Company
or (y) transferred to Purchaser pursuant to Section 4.08(f) (the "Acquired
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Insurance Policies").
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(b) The term "Excluded Assets" means:
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(i) (A) for the avoidance of doubt, the MTBE Conversion Assets, (B)
the PO storage tanks at the facility in South Charleston numbered 9016,
9017, 9018, and the related infrastructure, including the real property
thereunder, as more particularly described in the Union Carbide Corporation
consent to partially assign the South Charleston Ground Lease and (C) all
assets identified on Schedule 1.02(b);
(ii) all cash and cash equivalents of Lyondell or the Lyondell
Selling Subsidiaries, other than the cash and cash equivalents held in the
accounts of the Asian Companies;
(iii) all rights, claims and credits of Lyondell or the Lyondell
Selling Subsidiaries to the extent relating to any Excluded Asset or any
Excluded Liability (including any such items arising under
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insurance policies, guarantees, warranties, indemnities and similar rights
in favor of Lyondell or the Lyondell Selling Subsidiaries in respect of any
Excluded Asset or any Excluded Liability) and the claims in respect of
Acquired Assets and insurance reimbursements excluded from Acquired Assets
pursuant to Section 1.02(a)(xi);
(iv) all rights of Lyondell or the Lyondell Selling Subsidiaries
under this Agreement and the other Transaction Documents;
(v) the Retained Permits and the Permits set forth in Part III of
Schedule 1.02(a)(vii), which are not transferable as a matter of Applicable
Law;
(vi) (A) all Records, the transfer of which are not permitted by
Applicable Law (provided Lyondell shall use Reasonable Best Efforts to
remove any restriction on transfer imposed by Applicable Law, if Purchaser
reasonably requests), (B) all financial and Tax Records relating to the
Polyols Business that form part of Lyondell's general ledger and (C)
originals (to the extent required by Applicable Law) or copies of all other
Records reasonably required to enable Lyondell to prepare and file Tax
Returns and to support or defend such Tax Returns;
(vii) the Excluded Receivables;
(viii) "Allowance for doubtful accounts" identified in the Closing
Working Capital Statement;
(ix) all assets of the Lyondell Pension Plans, except as otherwise
required by Applicable Law or as provided for in Section 4.08(f) in respect
of the assets of the Foreign Plans;
(x) all insurance policies, other than the Acquired Insurance
Policies, held by Lyondell or a Lyondell Selling Subsidiary (for the
avoidance of doubt, this provision applies to such insurance policies
themselves and not to rights, claims and credits that are Acquired Assets
identified in Section 1.02(a)(xi));
(xi) any Contract entered into in violation of the Master
Transaction Agreement, unless Purchaser waives such violation in writing
and agrees to assume such Contract;
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(xii) all reimbursements under insurance policies for losses incurred
by Lyondell or a Lyondell Selling Subsidiary prior to the Closing;
(xiii) all Contracts with Affiliates other than the Assigned Contracts
listed on Schedule 1.02(b)(xiii);
(xiv) all assets arising under any currency exchange, interest rate
exchange, commodity exchange or similar Contract; and
(xv) all Records prepared in connection with the sale or evaluation
of strategic alternatives with respect to the disposition, transfer or
other restructuring of the Polyols Business.
SECTION 1.03. Assumption of Certain Liabilities. (a) Upon the terms
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and subject to the conditions of this Agreement, Purchaser or a Purchaser
Designee shall assume, effective as of the Closing, and from and after the
Closing Purchaser or a Purchaser Designee shall pay, perform and discharge when
due, all the following Liabilities of Lyondell and the Lyondell Selling
Subsidiaries (the "Assumed Liabilities"), other than any Excluded Liabilities:
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(i) all Liabilities of Lyondell or the Lyondell Selling
Subsidiaries under the Assigned Contracts to the extent such Liabilities
relate to or arise in the period from and after the Closing;
(ii) all accounts payable and other accrued liabilities of Lyondell
or the Lyondell Selling Subsidiaries arising primarily out of the operation
or conduct or ownership of the Polyols Business prior to the Closing, but
only to the extent they are included in the Closing Working Capital
Statement;
(iii) all other Liabilities arising from the operation or conduct or
ownership of the Polyols Business by Purchaser or any Purchaser Affiliate
from and after the Closing;
(iv) any Liability arising under or relating to Environmental Laws,
which Liability arises from the operation or conduct or ownership of the
Polyols Business by Purchaser or any Purchaser Affiliate after the Closing;
and
(v) any of the following Liabilities to the extent unpaid and then
only to the extent such Liabilities arise on or after the Closing Date and
arise out of the
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operation or conduct or ownership of the Polyols Business on or after the
Closing Date:
(i) rent, tenant utility payments, common area maintenance and
sundry charges (including any HVAC charges); and
(ii) utility company charges, including electricity, gas, fuel,
water and sewer charges;
(vi) any Liabilities for price, volume or other product rebate
accruals, but only to the extent they are included in the Closing Working
Capital Statement;
(vii) the Liabilities imposed on Purchaser or any Purchaser Affiliate
under Applicable Law and the Liabilities assumed by Purchaser or any
Affiliate of Purchaser as provided in Section 4.08(f) in respect of Foreign
Plans;
(viii) all Liabilities specifically assumed by Purchaser or any
Purchaser Designee pursuant to the provisions of this Agreement or any
Polyols Transfer Document; and
(ix) the Liabilities identified on Schedule 1.03(a)(ix).
(b) Notwithstanding Section 1.03(a), Purchaser shall not assume any
Excluded Liability, each of which shall be retained and paid, performed and
discharged when due by Lyondell and the Lyondell Selling Subsidiaries, unless
and to the extent being contested in good faith. For the avoidance of doubt,
except as provided, this Section 1.03(b) is not intended to limit Purchaser's
other obligations under this Agreement or any other Transaction Document (for
example, pursuant to Section 6.02 of this Agreement or Section 4.04 of the
Master Transaction Agreement). The term "Excluded Liability" means:
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(i) any Liability of Lyondell or any Affiliate of Lyondell arising
from or relating to the operation or conduct or ownership of the Polyols
Business by Lyondell or any of its Affiliates in the period prior to the
Closing;
(ii) any Liability of Lyondell or any Affiliate of Lyondell arising
out of the operation or conduct or ownership by Lyondell or any of its
Affiliates of any business other than the Polyols Business;
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(iii) any Liability of Lyondell or the Lyondell Selling Subsidiaries
(A) arising out of any actual or alleged breach by Lyondell or the Lyondell
Selling Subsidiaries of, or nonperformance by Lyondell or the Lyondell
Selling Subsidiaries under, any Contract (including any Assigned Contract)
prior to the Closing, (B) to the extent it is not included in the Closing
Working Capital Statement, accruing under any Contract (including any
Assigned Contract) with respect to any period prior to the Closing, (C)
arising under any Contract entered into in violation of this Agreement,
unless Purchaser waives such violation in writing and agrees to assume such
Contract or (D) arising under any currency exchange, interest rate
exchange, commodity exchange or similar Contract;
(iv) any Liability of Lyondell or any Affiliate of Lyondell arising
out of (A) any Proceeding pending or, to the Knowledge of Lyondell,
threatened as of the Closing Date or (B) any actual or alleged violation by
Lyondell or any Affiliate of Lyondell of any Applicable Law prior to the
Closing;
(v) any account payable of Lyondell or the Lyondell Selling
Subsidiaries to the extent it is not included in the Closing Working
Capital Statement;
(vi) any Liability of Lyondell or any Affiliate of Lyondell to the
extent that it relates to any Excluded Asset;
(vii) other than with respect to Transfer Taxes as provided in Section
4.04 of the Master Transaction Agreement and other than as provided on
Schedule 1.03(a)(ix) with respect to Singapore income taxes for Lyondell
Singapore Pte, Ltd. , any Liability for Taxes (as defined in Section 3.11),
whether or not accrued, assessed or currently due and payable, (A) of
Lyondell or the Lyondell Selling Subsidiaries or (B) relating to the
operation or ownership of the Polyols Business for any Tax Period (or
portion thereof) ending on or prior to the Closing Date (for purposes of
this clause (vii), all real property Taxes, personal property Taxes and
similar ad valorem obligations levied with respect to the Acquired Assets
for a Tax Period that includes (but does not end on) the Closing Date shall
be apportioned between Lyondell and Purchaser based upon the number of days
of such period included in the pre-Closing Tax period and the number of
days of such Tax Period after the Closing Date (which period shall include
the Closing Date));
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(viii) any Liability of Lyondell or the Lyondell Selling Subsidiaries
arising under any Lyondell Benefit Plan, except for Liabilities imposed on
Purchaser or any Affiliate of Purchaser by Applicable Law or as assumed by
Purchaser or any Purchaser Designee in Section 4.08(f) in respect of the
Foreign Plans;
(ix) any Liability of Lyondell or the Lyondell Selling Subsidiaries
that relates to, or that arises out of, products (x) shipped by Lyondell
(but not manufactured or sold by Purchaser or any Purchaser Affiliate) or
(y) manufactured or sold (but, with respect to products manufactured by
Lyondell or its Affiliates or sold by Lyondell or its Affiliates (but not
manufactured by Purchaser or its Affiliates) and not shipped by Lyondell or
any of its Affiliates, only to the extent such Liabilities do not arise
from the contamination of, or damage to, such products after the Closing
Date by or on behalf of Purchaser or any Person that is not an Affiliate of
Lyondell), in each case, by or on behalf of Lyondell or the Lyondell
Selling Subsidiaries prior to the Closing Date (including claims of
negligence, personal injury, property or natural resources damages, product
damage, product liability, product warranties, promotional obligations,
strict liability, product recall or any other claims (including workers'
compensation, employer's liability or otherwise)), whether such Liability
relates to or arises out of accidents, injuries or losses occurring on or
prior to or after the Closing Date, except to the extent and only to the
extent of price, volume or other product rebate accruals that are included
in the Closing Working Capital Statement;
(x) other than as set forth in Section 4.08, any Liability of
Lyondell or the Lyondell Selling Subsidiaries that relates to, or that
arises out of, the employment or the termination of the employment with
Lyondell or the Lyondell Selling Subsidiaries of any employee or former
employee of the Polyols Business (including as a result of the Transactions
contemplated by this Agreement);
(xi) other than those Liabilities set forth on Schedule 1.03(b)(xi)
in respect of Assigned Contracts, any Liability of Lyondell or the Lyondell
Selling Subsidiaries to any Affiliates of Lyondell;
(xii) Liabilities arising under or relating to Environmental Law
(including any claims, proceedings or
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investigations relating to personal injury, toxic tort, property or natural
resources damages, the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. ss.9601 et seq., or similar federal or state
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laws) to the extent such Liabilities relate to, or arise out of: (A) the
ownership, operation or conduct of any business of Lyondell or the Lyondell
Selling Subsidiaries other than the Polyols Business; or (B) the ownership,
operation or conduct of the Polyols Business on or prior to the Closing
Date, including (1) any Environmental Condition existing on or prior to the
Closing Date and (2) any noncompliance, on or prior to the Closing Date,
with any Environmental Law (collectively, the matters set forth in this
Section 1.03(b)(xii) shall be referred to as the "Excluded Environmental
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Liabilities"); and
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(xiii) any of the following Liabilities to the extent unpaid prior to
the Closing and not included in the Closing Working Capital Statement and
to the extent such Liabilities arise and relate to the conduct of the
Polyols Business prior to the Closing Date:
(A) rent, tenant utility payments, common area maintenance and
sundry charges (including any HVAC charges); and
(B) utility company charges, including electricity, gas, fuel,
water and sewer charges;
(xiv) any Liabilities of Lyondell or any Affiliate of Lyondell
arising from or relating to any guarantees (other than guarantees with
respect to obligations of Purchaser or any Purchaser Affiliate); and
(xv) any Liabilities identified on Schedule 1.03(b)(xv).
(c) Purchaser shall acquire the Acquired Assets free and clear of
all Liens, other than Permitted Liens.
SECTION 1.04. Consents of Third Parties; Shared Contracts; Shared
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Assets. (a) Notwithstanding anything in this Agreement to the contrary, this
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Agreement shall not constitute an agreement to assign any asset or any claim or
right or any benefit arising under or resulting from such asset if an attempted
assignment thereof, without the consent of a third party, would constitute a
breach or other contravention of the rights of such third party, would be
ineffective with respect to any party to an agreement concerning such asset,
would violate or otherwise is not
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permitted by Applicable Law or would in any way adversely affect the rights of
Lyondell or the Lyondell Selling Subsidiaries or, upon transfer, Purchaser under
or in respect of such asset. If any transfer or assignment by Lyondell or the
Lyondell Selling Subsidiaries to, or any assumption by Purchaser of, any
interest in, or Liability under, any asset requires the consent or approval of a
third party (including any Governmental Entity), then no such assignment or
assumption shall be made without such consent or approval being obtained. To the
extent any Contract may not be assigned to Purchaser by reason of the absence of
any such consent or approval, such Contract shall not be an Acquired Asset and
Purchaser shall not be required to assume the related Liabilities arising under
such Contract.
(b) If any such consent or approval is not obtained prior to the
Closing Date after Lyondell has complied with Section 4.03(b) of the Master
Transaction Agreement, Lyondell and the Lyondell Selling Subsidiaries shall to
the extent not prohibited by the terms of any applicable contract or Applicable
Law, hold the asset subject to such consent or approval, together with any
proceeds therefrom, in trust for Purchaser or any Purchaser Designee and
Lyondell, the Lyondell Selling Subsidiaries and Purchaser shall cooperate (at
their own expense) in any lawful and reasonable arrangement reasonably proposed
by Purchaser under which Purchaser or a Purchaser Designee shall obtain to the
extent practicable the economic claims, rights and benefits under the asset,
claim or right with respect to which the consent or approval has not been
obtained in accordance with this Agreement. Such reasonable arrangement may
include (i) the subcontracting, sublicensing or subleasing to Purchaser or a
Purchaser Designee of any and all rights of Lyondell and the Lyondell Selling
Subsidiaries against the other party to such third-party agreement arising out
of a breach or cancelation thereof by the other party and (ii) Reasonable Best
Efforts by Lyondell or the Lyondell Selling Subsidiaries to enforce such rights.
If Purchaser or a Purchaser Designee is able to receive the economic claims,
rights and benefits under such asset, such economic claims, rights and benefits
shall constitute an Acquired Asset and the Liabilities, if any, related to such
economic claims, rights and benefits under such asset shall constitute Assumed
Liabilities to the extent contemplated by Sections 1.02 and 1.03.
(c) Any Assigned Contract that relates primarily to the Polyols
Business but also relates to any businesses of Lyondell or its Affiliates will,
at Lyondell's request and if permitted under the terms of such Assigned Contract
and Applicable Law, be made available to Lyondell or such Affiliates by
Purchaser pursuant to arrangements by which Lyondell or such
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Affiliates will enjoy the benefits to the extent practicable of such Assigned
Contracts as they relate to their businesses (other than the Polyols Business)
on the same terms and conditions as they exist on the Closing Date or such
amended terms and conditions as Lyondell or such Affiliates shall approve;
provided, that Purchaser shall not be obligated to extend the stated term of any
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Assigned Contract, including pursuant to any available renewal option.
Similarly, any contract to which Lyondell or any Lyondell Selling Subsidiary is
a party that does not relate primarily to the Polyols Business but does relate
to the Polyols Business in some respects, will, at Purchaser's request and if
permitted under the terms of such contract and Applicable Law, be made available
to Purchaser pursuant to arrangements by which Purchaser will enjoy the benefits
to the extent practicable of such contract as it relates to the Polyols Business
on the same terms and conditions as they exist on the Closing Date or such
amended terms and conditions as Purchaser shall approve; provided that Lyondell
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shall not be obligated to extend the stated term of any such contract, including
pursuant to any available renewal option.
(d) Purchaser shall provide access or otherwise make available to
Lyondell and its Affiliates, to the extent permitted under the terms of any
applicable contracts and Applicable Law, any Acquired Assets located at the
Channelview facility or Fos-Sur-Mer facility that are also used or necessary to
any businesses of Lyondell or its Affiliates at a cost equal to its own cost,
allocated on a reasonable basis pursuant to operating agreements, joint service
agreements, joint access agreements or other arrangements pursuant to which
Lyondell and its Affiliates will enjoy in all material respects the benefits of
those assets on the same or substantially equivalent basis as they do on and
prior to the Closing Date. Similarly, Lyondell shall provide access or otherwise
make available to Purchaser, to the extent permitted under the terms of any
applicable contracts and Applicable Law, any Excluded Assets or other assets
used in the businesses of Lyondell or any of the Lyondell Selling Subsidiaries
that are also used or necessary to the Polyols Business at a cost equal to its
own cost, allocated on a reasonable basis pursuant to the Polyols Operating
Agreement or other operating agreement, joint service agreements, joint access
agreements or other arrangements pursuant to which the Polyols Business will
enjoy in all material respects the benefits of those assets on the same or
substantially equivalent basis as it does on and prior to the Closing Date.
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SECTION 1.05. Polyols Business Purchase Price Adjustment. (a) At
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least 5 Business Days prior to the Closing Date, Lyondell shall deliver an
estimate prepared by Lyondell (and reasonably satisfactory to Purchaser) of any
adjustment to the Polyols Business Purchase Price determined in accordance with
Section 1.05(d) and (e) (the Polyols Business Purchase Price, plus or minus such
estimate of any adjustment, being hereinafter called the "Estimated Polyols
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Business Purchase Price").
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(b) Within 60 days after the Closing Date, Lyondell shall prepare and
deliver to Purchaser a statement (the "Closing Working Capital Statement"),
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certified by an officer of Lyondell, setting forth Working Capital as of the
close of business on the Closing Date ("Closing Working Capital"). A physical
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inventory shall be conducted by Lyondell consistent with past practice on or
immediately before the Closing Date for the purpose of preparing the Closing
Working Capital Statement, and each of Lyondell and Purchaser and their
respective independent auditors shall have the right to observe the taking of
such physical inventory.
(c) During the 60-day period following Purchaser's receipt of the
Closing Working Capital Statement, to the extent reasonable, Purchaser and its
independent auditors shall be permitted to review the working papers and
Purchaser's independent auditors shall be permitted to review the accounting
records relating to the Closing Working Capital Statement. The Closing Working
Capital Statement shall become final and binding on Purchaser and Lyondell on
the 60th day following delivery thereof, unless Purchaser gives written notice
of its disagreement with the Closing Working Capital Statement (a "Notice of
---------
Disagreement") to Lyondell prior to such date. Any Notice of Disagreement shall
------------
specify in reasonable detail (i) the nature of any disagreement so asserted and
(ii) (A) the portion of the Closing Working Capital set forth in the Closing
Working Capital Statement agreed by Purchaser, if any (the "Undisputed WC
-------------
Amount") and (B) the portion of the Closing Working Capital set forth in the
------
Closing Working Capital Statement with which Purchaser disagrees, if any (the
"Disputed WC Amount"). If a Notice of Disagreement is received by Lyondell in a
------------------
timely manner, then the Closing Working Capital Statement (as revised in
accordance with this sentence) shall become final and binding upon Lyondell and
Purchaser on the earlier of (A) the date Lyondell and Purchaser resolve in
writing any differences they have with respect to the matters specified in the
Notice of Disagreement or (B) the date any disputed matters are finally resolved
in writing by the Accounting
15
Firm (as defined below). Purchaser and Lyondell may agree upon terms for payment
of the Undisputed WC Amount at any time after the delivery of the Closing
Working Capital Statement without prejudice to their respective rights under
this Section 1.05. During the 30-day period following the delivery of a Notice
of Disagreement, Lyondell and Purchaser shall seek in good faith to resolve in
writing any differences that they may have with respect to the matters specified
in the Notice of Disagreement. At the end of such 30-day period, Lyondell and
Purchaser shall submit to an independent accounting firm (the "Accounting Firm")
---------------
for arbitration any and all matters that remain in dispute and which were
properly included in the Notice of Disagreement. The Accounting Firm shall be
KPMG or, if such firm is unable or unwilling to act, such other nationally
recognized independent public accounting firm as shall be agreed upon by the
parties hereto in writing. Lyondell and Purchaser agree to use reasonable
efforts to cause the Accounting Firm to render a decision resolving the matters
submitted to the Accounting Firm within 30 days following submission. Judgment
may be entered upon the determination of the Accounting Firm in any court having
jurisdiction over the party against which such determination is to be enforced.
The cost of any arbitration (including the fees and expenses of the Accounting
Firm and reasonable attorney fees and expenses of the parties) pursuant to this
Section 1.05 shall be paid 50% by Lyondell and 50% by Purchaser.
(d) The Polyols Business Purchase Price shall be increased by the
amount by which Closing Working Capital exceeds $240.9 million, and the Polyols
Business Purchase Price shall be decreased by the amount by which Closing
Working Capital is less than $240.9 million (the Polyols Business Purchase
Price, as so increased or decreased, shall hereinafter be referred to as the
"Adjusted Polyols Business Purchase Price"). If the Estimated Polyols Business
----------------------------------------
Purchase Price is less than the Adjusted Purchase Price, Purchaser shall, within
10 Business Days after the Closing Working Capital Statement becomes final and
binding on the parties, make payment by wire transfer in immediately available
funds of the amount of such difference, together with interest thereon at LIBOR
in effect on the Closing Date calculated on the basis of the actual number of
days elapsed divided by 365, from the Closing Date to the date of payment (net
of any amounts and interest thereon previously paid in respect of any Undisputed
WC Amount pursuant to Section 1.05(c)). If the Estimated Polyols Business
Purchase Price is more than the Adjusted Polyols Business Purchase Price,
Lyondell shall, within 10 Business Days after the Closing Working Capital
Statement becomes final and binding on the parties, make payment by wire
transfer in
16
immediately available funds of the amount of such difference, together with
interest thereon at LIBOR in effect on the Closing Date calculated on the basis
of the actual number of days elapsed divided by 365, from the Closing Date to
the date of payment (net of any amounts and interest thereon previously paid in
respect of any Undisputed WC Amount pursuant to Section 1.05(c)).
(e) "Working Capital" means the specific current asset items and
---------------
specific current liability items of the Polyols Business as reflected on the
1998 Working Capital Statement.
SECTION 1.06. Polyols Transfer Documents; Subsequent Closing. (a) If
----------------------------------------------
a Polyols Transfer Document is to be executed in any country where notification
of or consultation with a works council or similar entity is required, then such
Polyols Transfer Document shall not be executed by the parties until such time
as such notification or consultation is completed. In addition to their
respective obligations set forth in Sections 2.02 and 4.04, Lyondell and
Purchaser shall cooperate with each other to effect any such non-United States
transfers, including, if appropriate, incorporating or extending the
applicability of any provisions of this Agreement or any other Polyol Transfer
Document to such transfer.
(b) Each of Purchaser and Lyondell shall use Reasonable Best Efforts
to cause the transfers contemplated by any Polyols Transfer Document relating to
the transfers of the Acquired Shares or any Polyols Business assets located
outside of the United States (a "Foreign Polyols Transfer Document") to occur on
---------------------------------
the Closing Date and, if any such transfer does not occur on the Closing Date,
as soon thereafter as possible. For the avoidance of doubt, Lyondell and
Purchaser acknowledge that Sections 1.04(a), (b) and (c) shall apply to the
assets and liabilities that are the subject of any such transaction that does
not occur on the Closing Date; provided, that Sections 1.04(a), (b) and (c)
--------
shall not apply with respect to any Polyols Business Unit in the event the
acquisition of such Polyols Business Unit is not effected on the Closing Date
(whether or not such acquisition is subject to any Foreign Polyols Transfer
Document). Notwithstanding anything to the contrary herein, unless Purchaser and
Lyondell otherwise mutually agree, Lyondell shall retain the benefits and
liabilities with respect to any such Polyols Business Unit until the closing of
the acquisition thereof by Purchaser. Lyondell shall continue to conduct the
business of such Polyols Business Unit in accordance with the standard described
in Section 4.08 of the Master Transaction
17
Agreement. Notwithstanding anything to the contrary herein, if there is a
delayed Closing with respect to any Polyols Business Unit, (i) the specific
amount of the Polyols Business Purchase Price allocated in Schedule 2.04 to such
Polyols Business Unit shall be deducted from the Polyols Business Purchase Price
otherwise payable on the Closing Date, (ii) the $240.9 million stated in Section
1.05(d) will be reduced for Working Capital adjustment purposes by the amount of
Working Capital for that Polyols Business Unit included in the 1998 Working
Capital Statement for such Polyols Business Unit, (iii) the Polyols Business
Purchase Price allocated to that Polyols Business Unit (as adjusted for Working
Capital as appropriate to achieve the results intended by Section 1.05(d) if
such Polyols Business Unit had been transferred on the Closing Date) shall be
paid on the date that such Polyols Business Unit is transferred to Purchaser or
a Purchaser Designee. For the avoidance of doubt, Purchaser acknowledges that
the consummation of the acquisition of any non-U.S. and non-European Business
Unit is not a condition precedent to the Closing so long as Lyondell meets its
obligations under this Section 1.06.
(c) Subject to Section 4.04 of the Master Transaction Agreement, if
the transfer of any assets requires payment by Purchaser to Lyondell in addition
to the Polyols Business Purchase Price, Lyondell shall transfer to Purchaser on
the date such payment is due an amount equal to such additional payment in U.S.
dollars. To the extent such additional payment by Purchaser is in a currency
other than U.S. dollars, Lyondell shall make such payment to Purchaser in U.S.
dollars based on the mid-range exchange rate as of such date as published in the
Wall Street Journal, Northeastern Edition.
------------------------------------------
ARTICLE II
The Closing
-----------
SECTION 2.01. Closing Date. The Closing of the transactions
------------
contemplated herein shall take place following the satisfaction (or, to the
extent permitted, the waiver by the parties entitled to the benefit thereof) of
the conditions set forth in Article V of the Master Transaction Agreement at the
place, time and date set forth in the Master Transaction Agreement.
18
SECTION 2.02. Transactions To Be Effected at the Closing. At the
-------------------------------------------
Closing:
19
(a) Lyondell and the Lyondell Selling Subsidiaries shall
deliver to Purchaser and the Purchaser Designees (i) such appropriately
executed deeds (in recordable form), bills of sale, assignments, local
asset transfer agreements and other instruments of transfer relating to
the Acquired Assets in form and substance reasonably satisfactory to
Purchaser and its counsel, (ii) Lyondell shall deliver or cause to be
delivered to Purchaser certificates representing the Acquired Shares,
duly endorsed in blank or accompanied by stock powers duly endorsed in
blank in proper form for transfer, with appropriate transfer stamps, if
any, affixed and (iii) such other documents as Purchaser or its counsel
may reasonably request to demonstrate satisfaction of the conditions
and compliance with the covenants set forth in this Agreement including
(x) fully executed originals, or to the extent such originals cannot be
found after reasonable efforts, certified copies of the Real Property
Leases and agreements listed in Schedule 1.02(a)(i) and (y) all
necessary consents to the transfer of the Real Property Leases as may
be required from any third parties, including the landlords of Leased
Properties pursuant to the Real Property Leases. Purchaser may obtain
title insurance for its own account and Lyondell will cooperate with
respect thereto so long as such cooperation will not result in any
increased liability or material cost to Lyondell.
(b) Purchaser and the Purchaser Designees shall deliver to
Lyondell and the Lyondell Selling Subsidiaries (i) payment, by wire
transfer to a bank account designated in writing by Lyondell (such
designation to be made at least five Business Days prior to the Closing
Date), immediately available funds in an amount equal to the Estimated
Polyols Business Purchase Price, (ii) such appropriately executed local
asset transfer agreements, assumption agreements and other instruments
of assumption providing for the assumption of the Assumed Liabilities
in form and substance reasonably satisfactory to Lyondell and its
counsel and (iii) such other documents as Lyondell or its counsel may
reasonably request to demonstrate satisfaction of the conditions and
compliance with the covenants set forth in this Agreement.
(c) To the extent any transaction to be effected at the
Closing or thereafter with respect to any Polyols Business Unit
involves a payment of part of the Polyols Business Purchase Price in a
currency other than U.S. dollars, the amount of such foreign currency
20
paid with respect to such transaction shall be determined by reference
to the applicable U.S. dollar amount for such Polyols Business Unit set
forth in Schedule 2.04 multiplied by the mid-range exchange rate as of
the date of such transaction as published in the Wall Street Journal,
Northeastern Edition.
SECTION 2.03. Risk of Loss. Until the Closing, any loss of
-------------
or damage to the Acquired Assets from fire, casualty or any other occurrence
shall be the sole responsibility of Lyondell or the Lyondell Selling
Subsidiaries, as applicable.
SECTION 2.04. Polyols Business Purchase Price Allocation.
-------------------------------------------
(a) Lyondell and Purchaser have agreed to an estimated
by-country allocation of the Polyols Business Purchase Price to the assets of
the Polyols Business located therein (each, a "Polyols Business Unit"), as set
---------------------
forth in Schedule 2.04. No later than ninety (90) days after the Closing Date,
either Parent Party may request an adjustment to such initial allocation,
including, but not limited to, a request to make an adjustment to reflect the
Closing Working Capital. Lyondell and Purchaser shall endeavor in good faith to
agree to any and all requested adjustments. To the extent that Lyondell and
Purchaser are unable to agree to any requested adjustment, Lyondell and
Purchaser shall select an independent appraisal firm that, in consultation with
the Parent Parties and their respective consultants, shall make a final
determination with respect to each unagreed adjustment.
(b) No later than 90 days after the Closing Date, Lyondell and
Purchaser shall also endeavor in good faith (i) to agree on a final by-country
allocation of the total consideration paid for the Polyols Business Units,
including Assumed Liabilities that constitute consideration for purposes of
Taxes and (ii) to allocate that by-country consideration to the specific assets
of the Polyols Business Units in accordance with Section 1060 of the Code and
the Applicable Laws of non-U.S. jurisdictions. If Lyondell and Purchaser are
unable to agree to a final allocation of such total consideration, Lyondell and
Purchaser shall select an independent appraisal firm that, in consultation with
the Parent Parties and their respective consultants, shall make a final
determination with respect to the allocation of the total consideration
consistent with Applicable Law.
(c) The independent appraisal firm shall be selected by
agreement of Lyondell and Purchaser from a list
21
of nationally recognized, independent appraisers nominated by each Parent Party.
In the event that either Parent Party fails to nominate a nationally recognized,
independent appraiser then the other party's separate appraiser shall be
selected. Any determinations of such independent or separate appraisal firm, as
the case may be, made under Section 2.04(a) or (b) shall be conclusive and
binding as to Lyondell and Purchaser and their respective Affiliates. Each of
Lyondell and Purchaser and their respective Affiliates shall file all of its Tax
Returns consistent with any agreements and determinations made under Sections
2.04(a) and (b).
(d) Lyondell and Purchaser shall share 50/50 the fees and
expenses of any independent appraisal firm retained under either Section 2.04(a)
or (b). Each of Lyondell and Purchaser shall solely bear the costs of its
consultants.
ARTICLE III
Representations and Warranties
------------------------------
of Lyondell and the Lyondell Selling Subsidiaries
-------------------------------------------------
Lyondell and the Lyondell Selling Subsidiaries hereby jointly
and severally represent and warrant to Purchaser and the Purchaser Designees, as
of November 16, 1999 and as of the Closing Date, as follows:
SECTION 3.01. Financial Statements. (a) Attached as
---------------------
Schedule 3.01(a) are the following financial statements (collectively, the
"Financial Statements")
--------------------
(i) As of and for the year ended December 31, 1998:
(A) Statement of Combined Revenues and Expenses
Attributable to the Polyols Business of Lyondell (the "1998
----
Income Statement");
----------------
(B) Statement of Combined Assets and Liabilities
Attributable to the Polyols Business of Lyondell (the "1998
----
Balance Sheet");
-------------
(C) Statement of Combined Working Capital Attributable
to the Polyols Business of Lyondell (the "1998 Working Capital
--------------------
Statement");
---------
22
(D) Statement of Selected Combined Cash Flow
Information Attributable to the Polyols Business of Lyondell
(the "1998 Cash Flows Statement");
-------------------------
(ii) as of and for the six months ended June 30, 1999:
(A) Statement of Combined Revenues and Expenses
Attributable to the Polyols Business of Lyondell (the "1999
----
Income Statement");
----------------
(B) Statement of Combined Assets and Liabilities
Attributable to the Polyols Business of Lyondell (the "1999
----
Balance Sheet");
-------------
(C) Statement of Combined Working Capital Attributable
to the Polyols Business of Lyondell (the "1999 Working Capital
--------------------
Statement");
---------
(D) Statement of Selected Combined Cash Flow
Information Attributable to the Polyols Business of Lyondell
(the "1999 Cash Flows Statement"); and
-------------------------
(iii) footnotes describing the procedures and methodologies
used by Lyondell in the preparation of the derived financial statements
set forth in (i) and (ii) above of the Polyols Business.
(b) Attached hereto as Schedule 3.01(b) is supplemental
financial information, including details of sales, costs of sales, SG&A and R&D
of the Polyols Business (the "Supplemental Financial Schedules"), which has been
--------------------------------
derived from the Financial Statements and, to Lyondell's Knowledge, fairly
presents the information discussed therein.
(c) The Financial Statements of the Polyols Business have
been derived from the Consolidated Financial Statements and books and records of
Lyondell, which have been prepared in accordance with GAAP, except that accounts
receivable include certain amounts sold to Lyondell Funding LLC, which is not
consolidated with Lyondell for financial reporting purposes. The unaudited
Financial Statements of the Polyols Business are a fair and reasonable
presentation of the results of operations and financial condition of Lyondell's
Polyols Business as of and for the periods ended December 31, 1998 and June 30,
1999 under GAAP (except as described in the notes thereto).
"Consolidated Financial Statements" means the consolidated
financial statements of Lyondell (i) filed on
23
Form 10-K with the SEC with respect to Lyondell's fiscal year ended December 31,
1998 and (ii) filed on Form 10-Q with the SEC with respect to Lyondell's
respective fiscal quarters ended March 31, 1999 and June 30, 1999.
(d) The Polyols Business does not have any Liabilities, except
(i) as disclosed, reflected or reserved against on the 1998 Balance Sheet and
the notes thereto, (ii) for items set forth in any other Schedule hereto, (iii)
for Liabilities incurred in the ordinary course of the Polyols Business
consistent with past practice since the date of the 1998 Balance Sheet or not in
violation of the Master Transaction Agreement, (iv) for Excluded Liabilities and
(v) for Taxes.
(e) The Financial Statements do not include any assets,
liabilities, expenses or revenues with respect to the Performance Chemicals
Business.
SECTION 3.02. Assets Other than Real Property Interests. (a)
-----------------------------------------
Lyondell or a Lyondell Selling Subsidiary has good and valid title to or the
right to use all the Acquired Assets, in each case free and clear of all Liens,
except (i) such as are set forth in Schedule 3.02(a)(i) (all of which shall be
discharged on or prior to the Closing), (ii) mechanics', carriers', workmen's,
repairmen's or other like Liens arising or incurred in the ordinary course of
business, Liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the ordinary
course of business and Liens for Taxes that are not due and payable or that may
thereafter be paid without penalty or are being contested in good faith, (iii)
Liens pursuant to licenses entered into in the ordinary course of business of
and for patents and other intellectual property and technology and (iv) other
imperfections of title or encumbrances, if any, that individually or in the
aggregate, do not materially impair, and could not reasonably be expected to
materially impair, the continued use and operation of the material assets to
which they relate in the conduct of the Polyols Business as conducted as of
November 16, 1999 (the Liens described in clauses (ii) through (iv) above,
together with the Liens referred to in clauses (ii) through (vi) of Section
3.03, are referred to collectively as "Permitted Liens").
---------------
(b) This Section 3.02 does not relate to real property or
interests in real property, such items being the subject of Section 3.03, or to
Intellectual Property, such items being the subject of Section 3.04.
24
SECTION 3.03. Real Property. (a) Schedule 1.02(a)(i) sets
-------------
forth a complete list of all real property owned by Lyondell or the Lyondell
Selling Subsidiaries and used or held for use primarily in the operation or
conduct of the Polyols Business, other than any such property or interest
constituting an Excluded Asset (individually, an "Owned Property"). Schedule
--------------
1.02(a)(i) also sets forth a complete list of all material real property leased
by Lyondell or the Lyondell Selling Subsidiaries and used or held for use
primarily in the operation or conduct of the Polyols Business, other than any
such property or interest constituting an Excluded Asset (individually, a
"Leased Property"). Lyondell or a Lyondell Selling Subsidiary has, with respect
---------------
to those properties located in the United States, good and insurable fee title
and, with respect to those properties located outside the United States, fee
title or the substantial equivalent thereto, if any, in such jurisdiction, to
all Owned Property and good and valid title to the leasehold estates
constituting the Leased Property pursuant to the leases (the "Real Property
-------------
Leases") which are identified in Schedule 1.02(a)(i) (an Owned Property or
------
Leased Property being sometimes referred to herein, individually, as a "Polyols
-------
Business Property" and collectively as the "Premises"), in each case free and
----------------- --------
clear of all Liens, except (i) Liens described in clause (i) (which will be
released at the Closing), (ii) or (iii) of Section 3.02(a), (ii) such as are set
forth in Schedule 3.03(a)(ii), (iii) leases, subleases and similar agreements
set forth in Schedule 3.05, (iv) easements, covenants, rights-of-way and other
similar restrictions of record, including those set forth on Schedule
3.03(a)(iv)-(vi), (v) any conditions that may be shown by a current, accurate
survey or physical inspection of any Polyols Business Property, including those
set forth on Schedule 3.03(a)(iv)-(vi) and (vi) (A) zoning, building and other
similar restrictions, (B) Liens that have been placed by any developer, landlord
or other third party on property over which Lyondell or the Lyondell Selling
Subsidiaries has easement rights or on any Leased Property and subordination or
similar agreements relating thereto and (C) unrecorded easements, covenants,
rights-of-way and other similar restrictions, including those set forth on
Schedule 3.03(a)(iv)-(vi). None of the items set forth in clauses (iv), (v) and
(vi) above, individually or in the aggregate, materially impairs, or could
reasonably be expected materially to impair, the continued use and operation of
the Polyols Business Property to which they relate in the conduct of the Polyols
Business as conducted as of November 16, 1999. True, correct and complete copies
of the Real Property Leases and agreements identified in Schedule 1.02(a)(i)
have been, or within 60 days after the
25
date of the Master Transaction Agreement will be, delivered to Purchaser,
together with a supplement to Schedule 1.02(a)(i) that confirms, with respect to
each of the Real Property Leases and agreements identified in Schedule
1.02(a)(i), the date, parties, date of any amendments or supplements thereto,
date of expiration of the term thereof and whether any unexercised renewal
options exist. Each of the Real Property Leases, and each such other agreement
identified on Schedule 1.02(a)(i), is in full force and effect, and neither
Lyondell nor any of the Lyondell Selling Subsidiaries which is party to any such
Real Property Lease, or party to or beneficiary of any such agreement has
received or given any notice of default thereunder which is extant (i.e., same
----
was not cured within the applicable grace period or waived), and, to Lyondell's
Knowledge, no event has occurred which, with the giving of notice or the passage
of time, or both, would constitute a material default under any Real Property
Lease or under any such agreement.
(b) Together with Purchaser's rights under the Polyols
Operating Agreement and the Polyols Ground Leases (or, with respect to
Fos-Sur-Mer, the Polyols Transfer Document with respect thereto) there is
adequate access between each Polyols Business Property and public roads, and
there are no pending or, to the Knowledge of Lyondell, threatened Proceedings
that could have the effect of impairing or restricting such access. Other than
Abandoned Assets, the improvements located on the Polyols Business Property are
in good working order, are free from defects, except for normal wear and tear,
and have been maintained in all respects in accordance with the past practice of
the Polyols Business (other than Idle Assets which have been maintained to the
extent necessary to preserve the ability to resume using such Idle Asset at a
reasonable cost), and no repairs, replacements or regularly scheduled
maintenance relating to any such improvement has been deferred (other than with
respect to Idle Assets where any repairs, replacements or regularly scheduled
maintenance is being done to the extent necessary to preserve the ability to
resume using such Idle Asset at a reasonable cost), except for such defects,
failures to maintain and deferrals that, individually or in the aggregate, could
not reasonably be expected to have a Polyols Business Material Adverse Effect.
SECTION 3.04. Intellectual Property and Technology. (a)
------------------------------------
Schedule 1.02(a)(v) contains a materially complete list of all Intellectual
Property of Lyondell and its Affiliates that is used or held for use primarily
in the operation or conduct of the Polyols Business, including all such
Intellectual Property which has been registered in,
26
filed in or issued by the PTO, any state trademark offices and the patent,
trademark, copyright and other corresponding offices of foreign jurisdictions.
(b) Lyondell or a Lyondell Selling Subsidiary will transfer to
Purchaser the Assigned Intellectual Property and Technology within the time
periods set out on Schedule 3.04(b). Subject to Section 3.04(c), Lyondell
represents and warrants in respect to the Assigned Intellectual Property and
Technology that it is the sole and exclusive owner of and has the legal power to
transfer the rights in the Assigned Intellectual Property and Technology to
Purchaser.
(c) Except as set forth on Schedule 3.04(c), there are no
licenses or other agreements from or with third parties under which Lyondell or
any of its Affiliates uses or exercises any rights with respect to any of the
Assigned Intellectual Property or Technology.
(d) Except as set forth on Schedule 3.04(d), Lyondell has no
Knowledge of any facts concerning a challenge to Lyondell's or any of its
Affiliate's right, and has not received any oral or written notice from any
other Person challenging the right of Lyondell (or any of its Affiliates or any
other Person) to use any of the Assigned Intellectual Property or Technology,
and there is no interference, opposition, cancelation, reexamination or other
contest proceeding, administrative or judicial, pending or threatened with
respect to any Assigned Intellectual Property or Technology.
(e) Except as set forth on Schedule 3.04(e), no licenses have
been granted and neither Lyondell nor any Lyondell Affiliate has any obligation
to grant licenses with respect to any Assigned Intellectual Property or
Technology. To Lyondell's Knowledge, no claims have been made by Lyondell or any
of its subsidiaries of any violation or infringement by others of rights with
respect to any Assigned Intellectual Property or Technology. To Lyondell's
Knowledge, no claims have been made against Lyondell or any of its Affiliates by
others of any violation or infringement of rights with respect to any Assigned
Intellectual Property or Technology, and there is no basis for the making of any
such claim. To Lyondell's Knowledge, the use by Lyondell and its Affiliates of
the Assigned Intellectual Property or Technology (past and present) has not
violated or infringed any rights of other Persons, or constituted a breach of
any Contract (or other agreement or commitment).
27
(f) The Assigned Intellectual Property and Technology will not
be adversely affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(g) To Lyondell's Knowledge, all statements and
representations made by or on behalf of Lyondell or any of its Affiliates in any
pending patent and trademark applications with respect to the Assigned
Intellectual Property were true in all material respects as of the time they
were made.
(h) The Acquired Assets include all material written
documentation of the Assigned Intellectual Property and Technology.
(i) Except for such matters that, individually or in the
aggregate, could not reasonably be expected to have a Polyols Business Material
Adverse Effect, to Lyondell's Knowledge:
(i) all material Technology has been maintained in
confidence in accordance with protection procedures believed
by Lyondell to be customarily used in the chemical industry to
protect similar technology;
(ii) all former and current employees of the Polyols
Business, who have contributed to or participated in the
conception and development of material Technology
(collectively, "Personnel"), have executed and delivered to
Lyondell or one of its Affiliates employee's agreements
restricting the use and disclosure of company confidential
information, except as authorized by Lyondell or its
Affiliates in the performance or their employment duties, and
giving Lyondell or the Lyondell Selling Subsidiaries ownership
of all property rights therein;
(iii) no Personnel have any claim against Lyondell or
the Lyondell Selling Subsidiaries in connection with the
conception and development of any material Technology and no
such claim has been asserted or threatened; and
(iv) none of the current officers and employees of
Lyondell or the Lyondell Selling Subsidiaries has any patents
issued, patent applications pending or inventions now used or
needed by Lyondell or the Lyondell Selling
28
Subsidiaries in the furtherance of the Polyols Business, which
patent or applications have not been assigned to Lyondell or
the Lyondell Selling Subsidiaries.
SECTION 3.05. Assigned Contracts. (a) Except (w) for those
------------------
Contracts terminating prior to Closing with no remaining obligations to Lyondell
or a Lyondell Selling Subsidiary, (x) as set forth in Schedule 3.05, (y) for
Assigned Contracts entered into after November 16, 1999 and not in violation of
the Master Transaction Agreement and (z) for Contracts relating solely to
Excluded Assets, neither Lyondell nor any Lyondell Selling Subsidiary is a party
to or bound by any Contract that is used or held for use primarily in, or that
arises primarily out of, the operation or conduct of the Polyols Business and
that is:
(i) an employment agreement or employment contract with any
expatriate or any such agreement with any other individual that has a
potential liability of more than $100,000 (excluding any liability for
ordinary course salary or other compensation);
(ii) a collective bargaining agreement or other Contract
with any labor organization, union or association;
(iii) a covenant not to compete or other covenant of Lyondell
or the Lyondell Selling Subsidiaries restricting the development,
manufacture, marketing or distribution of the products and services of
Lyondell or the Lyondell Selling Subsidiaries other than customary
provisions contained in product sales agreements, requirements
contracts, exclusive distributor or sales representative or other
representative-type agreements entered into in the ordinary course of
business;
(iv) a Contract with (A) any shareholder of Lyondell or (B)
any current or former officer, director or employee of Lyondell or any
Affiliate of Lyondell that has a potential liability of more than
$100,000 (other than employment agreements or employment contracts
covered by clause (i) above);
(v) a Contract with any Affiliate of Lyondell that has a
potential liability of more than $100,000;
(vi) a lease, sublease or similar Contract with any person
under which Lyondell or any Lyondell Selling Subsidiary is a lessor or
sublessor of, or makes avail-
29
able for use to any person, any Polyols Business Property, except for
those leases, subleases or similar Contracts that could not reasonably
be expected to interfere with the operation or conduct of the Polyols
Business;
(vii) a lease, sublease or similar Contract with any person
under which (A) Lyondell or any Lyondell Selling Subsidiary is lessee
of, or holds or uses, any machinery, equipment, vehicle or other
tangible personal property owned by any person or (B) Lyondell or any
Lyondell Selling Subsidiary is a lessor or sublessor of, or makes
available for use by any person, any tangible personal property owned
or leased by Lyondell or any Lyondell Selling Subsidiary, in any such
case has an aggregate liability or receivable of or to Lyondell or any
Lyondell Selling Subsidiary, as the case may be, in excess of
$5,000,000 over the remaining term of such Contract and is not
terminable by Lyondell or any Lyondell Selling Subsidiary by notice of
not more than 90 days for a cost of less than $500,000;
(viii) (A) a continuing Contract for the future purchase of
materials, supplies or equipment, (B) a management, service, consulting
or other similar Contract or (C) an advertising agreement or
arrangement, in any such case that has an aggregate liability of
Lyondell or any Lyondell Selling Subsidiary in excess of $5,000,000
over the remaining term of such Contract and is not terminable by
Lyondell or any Lyondell Selling Subsidiaries by notice of not more
than 90 days for a cost of less than $500,000;
(ix) (A) a Contract under which Lyondell or any Lyondell
Selling Subsidiary has borrowed any money from, or issued any note,
bond, debenture or other evidence of indebtedness to, any person or (B)
any other note, bond, debenture or other evidence of indebtedness
issued to any person;
(x) a Contract (including any so-called take-or-pay or keep
well agreement) that has a potential liability of more than $100,000
under which (A) any person has directly guaranteed indebtedness,
liabilities or obligations of Lyondell or any Lyondell Selling
Subsidiary or (B) Lyondell or any Lyondell Selling Subsidiary has
directly or indirectly guaranteed indebtedness, liabilities or
obligations of any other person (in each case other than endorsements
for the purpose of collection in the ordinary course of business);
30
(xi) a Contract under which Lyondell or any Lyondell Selling
Subsidiary or Asian Company has, directly or indirectly, made any
advance, loan, extension of credit or capital contribution to, or other
investment in, any person (other than Lyondell or the Lyondell Selling
Subsidiaries or the Asian Companies);
(xii) a Contract granting a Lien (other than Permitted Liens
and Contracts in respect of Liens to be released at Closing) upon any
Polyols Business Property or any other Acquired Asset;
(xiii) a Contract providing for indemnification of any person
with respect to liabilities relating to any current or former business
of Lyondell or the Lyondell Selling Subsidiaries or any predecessor
person;
(xiv) a power of attorney (other than a power of attorney given
in the ordinary course of the Polyols Business with respect to routine
Tax matters);
(xv) a Contract not made in the ordinary course of the Polyols
Business involving potential liabilities of more than $100,000;
(xvi) a confidentiality agreement;
(xvii) a Contract (including a purchase order), involving
payment by Lyondell or any Lyondell Selling Subsidiary of more than
$5,000,000 after November 16, 1999 or involving payment by Lyondell or
any Lyondell Selling Subsidiary of more than $1,000,000, after November
16, 1999 and extending for a term more than one year from November 16,
1999 (unless terminable without payment or penalty upon no more than 90
days' notice);
(xviii) a Contract (including a sales order) involving the
obligation of Lyondell or any Lyondell Selling Subsidiary to deliver
products or services for payment of more than $5,000,000 after November
16, 1999 or involving payment of more than $1,000,000 after November
16, 1999 and extending for a term more than one year from November 16,
1999 (unless terminable without payment or penalty upon no more than 90
days' notice);
(xix) a Contract for the sale of any Acquired Asset after
November 16, 1999 (other than (x) equipment sales that individually are
for an amount less than $100,000,
31
or, in the aggregate, are for an amount less than $1,000,000 or (y)
inventory, in each case, in the ordinary course of business) or the
grant of any preferential rights to purchase any Acquired Asset or
requiring the consent of any party to the transfer thereof;
(xx) except for matters set forth in Schedule 3.14(b), a
Contract with any Governmental Entity involving obligations of Lyondell
or any Lyondell Selling Subsidiary in an amount greater than
$1,000,000;
(xxi) a Contract for any joint venture, partnership or similar
arrangement;
(xxii) a Contract providing for the services of any dealer,
distributor, sales representative, franchisee or similar representative
involving the payment or receipt in any year of such Contract in excess
of $1,000,000 by Lyondell or any Lyondell Selling Subsidiary or
extending for a term more than one year from November 16, 1999 (unless
terminable without payment upon no more than 90 days' notice); and
(xxiii) any other Contract to which Lyondell or any Lyondell
Selling Subsidiary is a party or bound that has an aggregate liability
after November 16, 1999 to any person (other than Lyondell or the
Lyondell Selling Subsidiaries) in excess of $5,000,000 and is not
terminable by Lyondell or the Lyondell Selling Subsidiaries by notice
of not more than 90 days for a cost of less than $500,000.
(b) Except as set forth in Schedule 3.05(b), all Contracts
listed in the Schedules are valid, binding and in full force and effect and are
enforceable by Lyondell or the Lyondell Selling Subsidiaries, as applicable, in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including any implied covenants of good faith and fair
dealing, and except for such failures to be valid, binding, in full force and
effect or enforceable that, individually or in the aggregate, could not
reasonably be expected to have a Polyols Business Material Adverse Effect.
Except as set forth in Schedule 3.05(b), to Lyondell's Knowledge, Lyondell and
the Lyondell Selling Subsidiaries are not (with or without the lapse of time or
the giving of notice, or both) in breach or default in any respect under any
Assigned
32
Contract and, to Lyondell's Knowledge, no other party to any Assigned Contract
is (with or without the lapse of time or the giving of notice, or both) in
breach or default in any respect thereunder, except for such noncompliance,
breaches and defaults that, individually or in the aggregate, have not had and
could not reasonably be expected to have a Polyols Business Material Adverse
Effect. To Lyondell's Knowledge, neither Lyondell nor any Lyondell Selling
Subsidiary has, except as disclosed in the applicable Schedule, received any
notice of the intention of any party to terminate any Assigned Contract prior to
the stated term thereof. Subject to (i) text redacted in connection with
antitrust considerations, (ii) text redacted pursuant to confidentiality
provisions in Contracts for which consent to disclosure have not yet been
obtained and (iii) confidential agreements for which consents to disclosure have
not yet been obtained, complete and correct copies of all Contracts listed or
referred to in Schedule 3.05, together with all modifications and amendments
thereto, have been made, or within 90 days after the date of the Master
Transaction Agreement will be made, available to Purchaser. Any such Contract
(or redacted language) not provided within the time period set forth in the
prior sentence because of pending antitrust matters or confidentiality
requirements, shall be provided as soon thereafter as practicable to the extent
permitted by the antitrust authorities or the counterparties to such agreements,
as applicable.
(c) Schedule 3.05(a) sets forth for each Assigned Contract
identified thereon whether the consent of the other party or parties thereto
must be obtained pursuant to the provisions thereof by virtue of the execution
and delivery of this Agreement or the consummation of the Polyols Business
Acquisition to avoid the invalidity of the transfer of such Contract, the
termination thereof, a breach, violation or default thereunder or any other
change or modification to the terms thereof. To the extent that a Contract is
identified on Schedule 3.05(a) in any of clauses (i) through (xxiii) of Section
3.05(a), that Contract shall also be deemed disclosed for purposes of each of
the other of such clauses of Section 3.05(a) to the extent any such other clause
is also applicable to such Contract, notwithstanding the fact that no specific
reference to such other clause is made. For the avoidance of doubt, Contracts
may have been included on Schedule 3.05(a) irrespective of whether the
descriptive threshold or terms set forth in the various clauses of Section
3.05(a) are applicable thereto.
SECTION 3.06. Inventory. The Inventory (a) is free of any
----------
material defect or deficiency and (b) is in
33
good, usable and currently marketable condition in the ordinary course of the
Polyols Business (subject, in the case of raw materials and work-in-process, to
the completion of the production process).
SECTION 3.07. Personal Property. Except for Abandoned Assets,
-----------------
each item of Personal Property is in good working order, is free from any defect
except for normal wear and tear and has been maintained in all respects in
accordance with the past practice of the Polyols Business (other than Idle
Assets which have been maintained to the extent necessary to preserve the
ability to resume using such Idle Asset at a reasonable cost), and no repairs,
replacements or regularly scheduled maintenance relating to any such item has
been deferred (other than with respect to Idle Assets where any repairs,
replacements or regularly scheduled maintenance is being done to the extent
necessary to preserve the ability to resume using such Idle Asset at a
reasonable cost), except for defects, failures to maintain and deferrals that,
individually or in the aggregate, could not reasonably be expected to have a
Polyols Business Material Adverse Effect. All leased Personal Property of the
Polyols Business is in the condition required of such property by the terms of
the lease applicable thereto, except for such instances that, individually or in
the aggregate, could not reasonably be expected to have a Polyols Business
Material Adverse Effect.
SECTION 3.08. Receivables. All the Receivables (a)
------------
represent actual indebtedness incurred by the applicable account debtors and (b)
have arisen from bona fide transactions in the ordinary course of the Polyols
Business.
SECTION 3.09. Permits. (a) Schedule 1.02(a) (vii) sets forth
-------
all Permits issued or granted to Lyondell or the Lyondell Selling Subsidiaries
that are necessary to operate or conduct the Polyols Business, except for those
Permits the absence of which could not, individually or in the aggregate,
reasonably be expected to have a Polyols Business Material Adverse Effect.
Except as set forth in Schedule 1.02(a)(vii), (i) all such Permits are validly
held by Lyondell or the Lyondell Selling Subsidiaries, and Lyondell or the
Lyondell Selling Subsidiaries has complied, and is in compliance, with all terms
and conditions thereof, except where the failure to be so or to do so,
individually or in the aggregate, could not reasonably be expected to have a
Polyols Business Material Adverse Effect, (ii) no Proceedings are pending or, to
Lyondell's Knowledge, threatened relating to the revocation or modification of
any such Permits the loss of which, individually or in the aggregate, could
reasonably be expected to have a Polyols
34
Business Material Adverse Effect and (iii) to Lyondell's Knowledge, except as
set forth in Part III to Schedule 1.02(a)(vii), which sets forth Permits that
cannot be transferable pursuant to Applicable Law (Bayer and Lyondell agree that
Lyondell shall have 90 days after November 16, 1999 to identify Permits listed
on such Schedule 1.02(a)(vii) that should be included in Part III), none of such
Permits will be subject to suspension, modification, revocation or nonrenewal as
a result of the execution and delivery of this Agreement or the consummation of
the Polyols Business Acquisition and the other Transactions, except for such
suspensions, modifications, revocations or nonrenewals which, individually or in
the aggregate, could not reasonably be expected to have a Polyols Business
Material Adverse Effect.
(b) Lyondell or the Lyondell Selling Subsidiaries possess all
Permits to own or hold under lease and operate the Acquired Assets and to
conduct the Polyols Business as conducted as of November 16, 1999, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Polyols Business Material Adverse Effect.
SECTION 3.10. Sufficiency of Acquired Assets. (a) The Acquired
------------------------------
Assets, together with the Excluded Assets, the Infrastructure Assets (as defined
in the Polyols Operating Agreement), the Permits referred to in Section 3.09 and
Lyondell's insurance policies comprise all the material assets employed by
Lyondell or the Lyondell Selling Subsidiaries in the Polyols Business and such
assets are sufficient for the conduct of the Polyols Business immediately
following the Closing in substantially the same manner as conducted as of
November 16, 1999, assuming all required consents and approvals are obtained and
assuming that Idle Assets and Abandoned Assets are not available for use in the
operation or conduct of the Polyols Business.
(b) Based on the 1998/1999 actual or engineered (i.e.,
modelled) data contained in Part II of Schedule 3.10(b), Part I of Schedule
3.10(b) sets forth for each facility identified thereon 1999 production capacity
for that facility, subject to the limitations and qualifications set forth in
Part II. The quantitative data set forth in Part II of Schedule 3.10(b) is
accurate in all material respects, subject to the qualifications and limitations
set forth therein.
SECTION 3.11. Taxes. (a) For purposes of this Agreement:
------
35
"Tax" means (i) any tax, governmental fee or other like
---
assessment or charge of any kind whatsoever (including any tax imposed under
Subtitle A of the Code and any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, withholding tax on amounts paid, payroll,
employment, excise, severance, stamp, capital stock, occupation, property,
environmental or windfall profit tax, premium, custom, duty or other tax),
together with any interest, penalty, addition to tax or additional amount due,
imposed by any Governmental Entity (domestic or foreign) responsible for the
imposition of any such tax (a "Taxing Authority"), (ii) any liability for the
----------------
payment of any amount of the type described in clause (i) above as a result of a
party to this Agreement being a member of an affiliated, consolidated or
combined group with any other corporation at any time on or prior to the Closing
Date and (iii) any liability of any person with respect to the payment of any
amounts of the type described in clause (i) or (ii) above as a result of any
express or implied obligation of such person to indemnify any other person.
(b) Except as set forth in Schedule 3.11(b), (i) Lyondell and
the Lyondell Selling Subsidiaries, and any affiliated group, within the meaning
of Section 1504 of the Code, of which Lyondell or the Lyondell Selling
Subsidiaries is or has been a member, has filed or caused to be filed in a
timely manner (within any applicable extension periods) all Tax Returns required
to be filed by the Code or by applicable state, local or foreign Tax laws, with
respect to the activities of the Polyols Business, (ii) all Taxes shown to be
due on such returns, reports and forms have been timely paid in full or will be
timely paid in full by the due date thereof, (iii) no material Tax Liens have
been filed and no material claims are being asserted in writing with respect to
any Taxes, (iv) no claim has ever been made by an authority in a jurisdiction
where Lyondell or the Lyondell Selling Subsidiaries do not file Tax Returns that
one or more of them might be subject to taxation on the Polyols Business'
activities by that jurisdiction and (v) Lyondell and the Lyondell Selling
Subsidiaries have withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party, in connection with the
Polyols Business' activities.
(c) Except as set forth in Schedule 3.11(c), (i) neither
Lyondell nor any of its affiliates has made with respect to Lyondell or the
Lyondell Selling Subsidiaries, or any assets of the Polyols Business, any
consent under
36
Section 341(f) of the Code, (ii) none of the Acquired Assets is "tax exempt use
property" within the meaning of Section 168(h) of the Code and (iii) none of the
Acquired Assets is a lease made pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954.
(d) Except as set forth in Schedule 3.11(d), neither Lyondell
nor the Lyondell Selling Subsidiaries is a "foreign person" within the meaning
of Section 1445 of the Code.
SECTION 3.12. Proceedings. Other than in connection with
-----------
antitrust filings made with regard to the transactions contemplated by the
Master Transaction Agreement, Schedule 3.12 sets forth as of November 16, 1999 a
list of each pending or, to the Knowledge of Lyondell, threatened Proceeding or
claim with respect to which Lyondell or the Lyondell Selling Subsidiaries has
been contacted in writing by counsel for the plaintiff or claimant, arising out
of the conduct of the Polyols Business or against or affecting any Acquired
Asset and that (a) relates to or involves more than $1,000,000, (b) seeks any
injunctive relief that, individually or in the aggregate, could reasonably be
expected to have a Polyols Business Material Adverse Effect or (c) relates to
the transactions contemplated by this Agreement. Other than in connection with
antitrust filings made with regard to the transactions contemplated by the
Master Transaction Agreement, none of the Proceedings or claims listed in
Schedule 3.13 as to which there is at least a reasonable possibility of adverse
determination would have, if so determined, individually or in the aggregate, a
Polyols Business Material Adverse Effect. In addition, to the Knowledge of
Lyondell, there are no unasserted claims of the type that would be required to
be disclosed in Schedule 3.12 if counsel for the claimant had contacted Lyondell
that are considered probable of assertion and that if asserted would have at
least a reasonable possibility of an adverse determination and, if so
determined, that, individually or in the aggregate, could reasonably be expected
to have a Polyols Business Material Adverse Effect. To the knowledge of
Lyondell, neither Lyondell nor the Lyondell Selling Subsidiaries is a party or
subject to or in default under any Judgment applicable to the conduct of the
Polyols Business or any Acquired Asset or Assumed Liability. Other than in
connection with antitrust filings made with regard to the transactions
contemplated by the Master Transaction Agreement, to the Knowledge of Lyondell,
there is no pending or threatened investigation of or affecting the conduct of
the Polyols Business or any Acquired Asset or Assumed Liability that,
individually or in the aggregate,
37
could reasonably be expected to have a Polyols Business Material Adverse Effect.
SECTION 3.13. Absence of Changes or Events. Since the date of
----------------------------
the 1998 Balance Sheet, there has not been any material adverse change in the
business, financial condition or results of operations of the Polyols Business,
excluding changes resulting from (i) economic or market conditions which affect
the world or any regional economy generally, (ii) the general market price of PO
raw materials or Polyol raw materials, supplies or utilities (including
propylene), (iii) the rate of inflation, (iv) valuation levels in the United
States, German or world equity or capital markets, specific customer or other
actions resulting directly from the announcement of the Transactions or (v)
actions by Purchaser or its Affiliates that directly or indirectly affect the
Polyols Business. Except as set forth in Schedule 3.13, from the date of the
1998 Balance Sheet to November 16, 1999, Lyondell has caused the Polyols
Business to be conducted in the ordinary course and in substantially the same
manner as previously conducted and has made all reasonable efforts consistent
with past practices to preserve the relationships of the Polyols Business with
customers, suppliers and others with whom the Polyols Business deals.
SECTION 3.14. Compliance with Applicable Laws. (a) Except as
-------------------------------
set forth in Schedule 3.14, the Polyols Business is in compliance with all
Applicable Laws, except where the failure to be so, individually or in the
aggregate, could not reasonably be expected to have a Polyols Business Material
Adverse Effect. This Section 3.14(a) does not relate to matters with respect to
Taxes, which are the subject of Section 3.11, or to environmental matters, which
are the subject of Section 3.14(b).
(b) Except for the matters set forth on Schedule 3.14(b) and
except for any other matters that, individually or in the aggregate, could not
reasonably be expected to have a Polyols Business Material Adverse Effect:
(1) the Polyols Business is in compliance with all
Environmental Laws;
(2) there are no pending or, to the Knowledge of Lyondell,
threatened, claims, proceedings or investigations arising under
Environmental Laws in connection with the Polyols Business;
(3) neither Lyondell nor any Lyondell Selling Subsidiaries has
received any written or oral
38
communication from any Governmental Entity or any third party that
alleges that the Polyols Business may not be in compliance in any
respect with, or may be subject to liability under, any Environmental
Laws, except for any such noncompliance or liability that has not been
resolved in accordance with Applicable Law prior to the Closing Date;
and
(4) there has been no Release of Hazardous Substances in, on,
at, under, or from any property owned or operated in connection with
the Polyols Business since July 28, 1998.
(c) Schedule 3.14(c), which Schedule Lyondell shall provide to
Purchaser no later than 90 days after the signing of the Master Transaction
Agreement, shall set forth any obligations that Environmental Law or
Environmental Permits impose as a result of the transactions contemplated in
this Agreement or any Polyols Transfer Document to: (i) modify or transfer any
Environmental Permit, (ii) file any notice or other submission with any
Governmental Entity, (iii) place any notice, acknowledgment or covenant in any
land records or (iv) modify or provide notice under any agreement, order or
consent decree.
As used in this Agreement, the term "Environmental Law" means
-----------------
any and all treaties, laws, rules, regulations, enforceable requirements,
binding determinations or agreements, orders, decrees, judgments, injunctions or
Permits issued, promulgated or entered into by any Governmental Entity relating
to the environment, preservation or reclamation of natural resources, human
health and safety, or the use, management, disposal, Release or threatened
Release of, or exposure to, Hazardous Substances or noxious odor.
As used in this Agreement, the term "Hazardous Substances"
--------------------
means all explosive or regulated radioactive materials or substances, hazardous
or toxic materials, wastes or chemicals, petroleum and petroleum products
(including crude oil or any fraction thereof), asbestos or asbestos-containing
materials, polychlorinated biphenyls, and all other materials or substances
regulated pursuant to any Environmental Law.
As used in this Agreement, the term "Release" means any
-------
spilling, leaking, pumping, purging, discharging, emitting, leaching, injecting
or migrating into or through the Environment.
(d) The occupancies and uses of the Premises, as well as the
management, maintenance, servicing and operation
39
of the Premises, comply with all Applicable Laws, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Polyols Business Material Adverse Effect. All material approvals,
consents, utility installations and connections required for the maintenance,
operation and servicing of the Premises have been granted, effected, or
performed and completed (as the case may be) as required, and all fees and
charges therefor that have become due have been fully paid, except for those
being contested in good faith. Neither Lyondell nor the Lyondell Selling
Subsidiaries has received notice of, and Lyondell does not otherwise have
Knowledge of, any violations relating to zoning, building use and occupancy,
traffic, fire, or other laws or regulations, against, or with respect to, the
Premises which, individually or in the aggregate, could reasonably be expected
to have a Polyols Business Material Adverse Effect.
SECTION 3.15. Benefit Plans. (a) Schedule 3.15(a) contains a
-------------
list of all "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974 ("ERISA")), maintained or
-----
contributed to by Lyondell or the Lyondell Selling Subsidiaries for the benefit
of any officers or employees of the Polyols Business ("Lyondell Pension Plans")
----------------------
and all "employee welfare benefit plans" (as defined in Section 3(1) of ERISA),
bonus, stock option, stock purchase, deferred compensation plans or arrangements
and other employee fringe benefit plans maintained, or contributed to, by
Lyondell or any of its Affiliates for the benefit of any officers or employees
of the Polyols Business, including each plan and arrangement maintained or
sponsored by Lyondell or any ERISA Affiliate for the benefit of employees who
perform services outside of the United States (a "Foreign Plan") (all the
------------
foregoing, including Lyondell Pension Plans, being herein called "Lyondell
--------
Benefit Plans"). Copies of all of the material written plans and agreements, and
-------------
correct and complete summaries of all material oral plans and agreements
described in Schedule 3.15(a), are or have been made available to Purchaser.
(b) With respect to any Lyondell Benefit Plan other than a
Foreign Plan: (i) neither such Lyondell Benefit Plan nor, to the Knowledge of
Lyondell, any plan fiduciary has engaged in a prohibited transaction as defined
in Section 406 of ERISA (for which no individual or class exemption exists under
Section 408 of ERISA) or any prohibited transaction as defined in Section 4975
of the Code (for which no individual or class exemption exists under Section
4975 of the Code) involving such Lyondell
40
Benefit Plan that resulted in any material liability to Lyondell which has not
been satisfied; (ii) all filings and reports as to such Lyondell Benefit Plan
required to have been made to the IRS, to the DOL or, if applicable, to the PBGC
have been made, except where any such failure could not reasonably be expected
to result, individually or in the aggregate, in a Polyols Business Material
Adverse Effect; (iii) there is no litigation, disputed claim (other than routine
claim for benefits), governmental proceeding or investigation commenced or
pending or, to Lyondell's Knowledge, threatened with respect to any such
Lyondell Benefit Plan or its related trust which could reasonably be expected to
result, individually or in the aggregate, in a Polyols Business Material Adverse
Effect; (iv) except where any such failure could not be reasonably expected to
result, individually or in the aggregate, in a Polyols Business Material Adverse
Effect, such Lyondell Benefit Plan has been established, maintained, funded and
administered in all material respects in accordance with (A) its governing
documents and (B) any applicable provisions of ERISA, the Code and final
regulations promulgated thereunder; and (v) no such Lyondell Benefit Plan is,
and neither Lyondell nor any ERISA Affiliate has, during the preceding five (5)
year period, contributed to or maintained a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
(c) With respect to any Lyondell Benefit Plan that covers
employees of Lyondell and which is intended to be qualified under Section 401(a)
or Section 501(c)(9) of the Code, except as set forth in Schedule 3.15(c),
favorable determination or approval letters as to qualification of such Lyondell
Benefit Plan under Section 401(a) or Section 501(c)(9) of the Code have been
issued by the IRS, and to Lyondell's Knowledge, no event has occurred or
condition exists which would adversely affect such qualification.
(d) There has not been any termination or partial termination
of any Lyondell Pension Plan maintained by Lyondell or any ERISA Affiliate,
during the period of such common control, at a time when Title IV of ERISA
applied to such Plan, that resulted in a material liability to Lyondell that has
not been satisfied. Each of Lyondell's and/or any ERISA Affiliate's Lyondell
Benefit Plans that is covered by COBRA is in material compliance with COBRA.
(e) With respect to any Foreign Plan, (i) there is no
litigation, disputed claim (other than routine claims for benefits),
governmental proceeding or investigation commenced or pending or, to Lyondell's
Knowledge, threatened
41
with respect to such Foreign Plan or its related trust which, if determined
adversely, would have a Polyols Business Material Adverse Effect, (ii) such
Foreign Plan has been created and maintained in accordance with Applicable Laws
and administered in all material respects in accordance with its governing
documents and (iii) except where such termination is not permitted by Applicable
Law, such Foreign Plan may be terminated without having a Polyols Business
Material Adverse Effect.
(f) Except as otherwise contemplated by Section 4.08 or as
required by Applicable Law, no Active Employee or Inactive Employee will become
entitled to any bonus, severance or any enhanced benefit solely as a result of
the transactions contemplated hereby with respect to which Purchaser could have
any liability or obligation.
SECTION 3.16. Employee and Labor Matters. (a) Except as set
--------------------------
forth in Schedule 3.16(a), as of November 16, 1999: (i) there is not any, and
during the past two years there has not been any, labor strike, material
dispute, work stoppage or lockout pending, or, to the Knowledge of Lyondell,
threatened, against or affecting the Polyols Business; (ii) to the Knowledge of
Lyondell, no union organizational campaign is in progress with respect to the
employees of the Polyols Business and no question concerning representation of
such employees exists; (iii) to the Knowledge of Lyondell, neither Lyondell nor
the Lyondell Selling Subsidiaries is engaged in any unfair labor practice in
connection with the conduct of the Polyols Business; (iv) there are not any
unfair labor practice charges or complaints against Lyondell or the Lyondell
Selling Subsidiaries pending, or, to the Knowledge of Lyondell, threatened,
before the National Labor Relations Board or any similar institution in any
country outside the United States in connection with the conduct of the Polyols
Business; (v) there are not any pending, or, to the Knowledge of Lyondell,
threatened, union or works council grievances against Lyondell or the Lyondell
Selling Subsidiaries in connection with the conduct of the Polyols Business as
to which there is a reasonable possibility of an adverse determination and that,
if so determined, individually or in the aggregate, could reasonably be expected
to have a Polyols Business Material Adverse Effect; (vi) there are not any
pending, or, to the Knowledge of Lyondell, threatened, charges in connection
with the conduct of the Polyols Business against Lyondell or the Lyondell
Selling Subsidiaries or any current or former employee of the Polyols Business
before the Equal Employment Opportunity Commission or any state or local agency
(domestic or foreign) responsible for the prevention of unlawful employ-
42
ment practices, except for those matters that if adversely determined could not
reasonably be expected to result, individually or in the aggregate, in a Polyols
Business Material Adverse Effect; and (vii) neither Lyondell nor any of the
Lyondell Selling Subsidiaries has received notice of the intent of any
Governmental Entity responsible for the enforcement of labor or employment laws
to conduct an investigation of the Polyols Business and, to the Knowledge of
Lyondell, no such investigation is in progress.
(b) Except for those employees at the Fos-Sur-Mer facility or
the Channelview facility who are necessary to provide operating services to
Purchaser or the Purchaser Designees under the Polyols Operating Agreement with
respect to such facility, Schedules 3.16(b)(i) and (ii) set forth respectively,
(i) the name and work location of each employee wholly or primarily dedicated to
the Polyols Business and (ii) the name and work location of each employee
partially (but not primarily) dedicated to the Polyols Business. Notwithstanding
the foregoing, Schedules 3.16(b)(i) and (ii) shall in no event include the
employees set forth in Schedule 3.16(b)(iii). Schedules 3.16(b)(i), 3.16(b)(ii)
and 3.16(b)(iii) may be supplemented and modified as Purchaser and Lyondell may
mutually agree after November 16, 1999. Except as set forth in Schedule
3.16(b)(i), since August 1, 1999, no employee who is wholly or primarily
dedicated to the Polyols Business and serving in a managerial, supervisory,
professional or technical position has transferred employment between the
Polyols Business and another business of Lyondell or its Affiliates. Except as
set forth in Schedules 3.16(b)(i) and 3.16(b)(ii), since November 16, 1999, no
employee who is a production operator or administrative support employee has
transferred employment between the Polyols Business and another business of
Lyondell or its Affiliates, other than any such transfers conducted in the
ordinary course and under substantially the same circumstances or conditions as
previous transfers were conducted.
(c) No employee of the Polyols Business is, to the Knowledge
of Lyondell, a party to or bound by any Contract (except with respect to a
confidentiality agreement or provision with respect to which consent to disclose
has been obtained), or subject to any Judgment that may interfere with the use
of such person's best efforts to promote the interests of the Polyols Business,
may conflict with the Polyols Business or the transactions contemplated hereby
or that could reasonably be expected to have a Polyols Business Material Adverse
Effect. To the Knowledge of Lyondell, no activity of any employee of the Polyols
Business as or while an employee of the Polyols Business has
43
caused a violation of any employment contract, confidentiality agreement or
other Contract to which such employee was a party. To the Knowledge of Lyondell,
neither the execution and delivery of this Agreement or any of the other
Transaction Documents, nor the conduct of the Polyols Business by the employees
of the Polyols Business (assuming the Polyols Business employees honor their
respective obligations, if any, to maintain the secrecy of confidential
information in their possession), will conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
Contract, under which any such employee is now obligated. This Section 3.16(c)
does not relate to agreements concerning Assigned Intellectual Property, these
agreements being the subject of Section 3.04.
SECTION 3.17. Disclosure. The representations and warranties
----------
of Lyondell and the Lyondell Selling Subsidiaries contained in this Agreement
and the other Transaction Documents, together with the statements contained in
the certificates and Schedules furnished or to be furnished by or on behalf of
Lyondell or the Lyondell Selling Subsidiaries to Purchaser pursuant to this
Agreement or any other Transaction Document, taken as a whole, do not and will
not contain any untrue statement of a material fact, or omit to state any
material fact, necessary in order to make such statements, taken as a whole, not
materially misleading in light of the circumstances under which they are or will
be made. Lyondell and the Lyondell Selling Subsidiaries specifically acknowledge
that all disclosures pursuant to this Agreement and relating to "year 2000
processing" or consisting of or including "year 2000 statements" are
specifically incorporated into this Section 3.17 for the purposes of the Federal
Year 2000 Information and Readiness Disclosure Act (as such terms are defined in
such Act).
SECTION 3.18. Suppliers. No later than 5 Business Days
----------
prior to the Closing, Lyondell shall provide a list of the suppliers that
individually sell goods or services for which the aggregate purchase price
exceeds 5% of the total amount of goods and services purchased by the Polyols
Business during its most recent full fiscal year.
SECTION 3.19. Customers. Neither Lyondell nor any Lyondell
---------
Selling Subsidiary has received any customer complaint concerning the products
and services of the Polyols Business, other than complaints and returns made in
the ordinary course of business that, individually or in the aggregate, have not
had and could not reasonably be expected to have a Polyols Business Material
Adverse Effect. No
44
later than 5 Business Days prior to the Closing Date, Lyondell shall provide a
list of customers who individually accounted for more than 5% of the Polyols
Business's sales in the most recent fiscal year.
SECTION 3.20. Year 2000 Compliance. (a) All computer and other
--------------------
systems, software programs, products, equipment, components and facilities used
in the Polyols Business, whether owned or produced by Lyondell or any of its
Affiliates or, to Lyondell's Knowledge, supplied thereto by any third party as
of November 16, 1999 and prior to and following the Closing Date shall be Year
2000 Compliant (as defined below), except where the failure to be so could not
reasonably be expected, individually or in the aggregate, to have a Polyols
Business Material Adverse Effect.
(b) The term "Year 2000 Compliant", with respect to a computer
-------------------
or other system, software program, product, equipment, component or facility
means that such computer or other system, program, product, equipment, component
or facility: (i) is capable of recognizing, processing, managing, representing,
interpreting and manipulating correctly date-related data for dates earlier and
later than January 1, 2000; (ii) has the ability to provide date recognition for
any data element without limitation; (iii) has the ability to function
automatically into and beyond the year 2000 without human intervention and
without any change in operations associated with the advent of the year 2000;
(iv) has the ability to interpret data, dates and time correctly into and beyond
the year 2000; (v) will not produce noncompliance in existing data, nor
otherwise corrupt such data, into and beyond the year 2000; (vi) has the ability
to process correctly after January 1, 2000, data containing dates before that
date; and (vii) has the ability to recognize all "leap year" dates, including
February 29, 2000.
SECTION 3.21. The Acquired Shares. Except as set forth on
-------------------
Schedule 3.21, Lyondell, directly or through one or more of the Lyondell Selling
Subsidiaries, has good and valid title to the Acquired Shares, free and clear of
any Liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind. Assuming Purchaser or the applicable Purchaser
Designee has the requisite power and authority to be the lawful owner of the
Acquired Shares, upon delivery to Purchaser or the applicable Purchaser Designee
at the Closing of certificates representing the Acquired Shares, duly endorsed
by Lyondell for transfer to Purchaser or the applicable Purchaser Designee, and
upon Lyondell's receipt of the Polyols Business Purchase Price, good and valid
title to the Acquired Shares will pass to
45
Purchaser or the applicable Purchaser Designee, free and clear of any Liens,
claims, encumbrances, security interests, options, charges and restrictions of
any kind, other than those arising from acts of Purchaser or its Affiliates.
Other than this Agreement and as set forth on Schedule 3.21, the Acquired Shares
are not subject to any voting trust agreement or other contract, agreement,
arrangement, commitment or understanding, including any such agreement,
arrangement, commitment or understanding restricting or otherwise relating to
the voting, dividend rights or disposition of the Acquired Shares. Except as set
forth on Schedule 3.21, no stock transfer taxes are due as a result of the
purchase and sale of the Acquired Shares.
SECTION 3.22. Capital Stock of the Asian Companies. Schedule
------------------------------------
3.22 sets forth, as of December 31, 1998 and currently, for each Asian Company
the amount of its authorized capital stock, the amount of its outstanding
capital stock and Lyondell's record and beneficial ownership interest in such
outstanding capital stock. All the outstanding shares of capital stock of each
Asian Company have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth in Schedule 3.22, there are no shares of
capital stock or other equity securities of any Asian Company outstanding.
Except as set forth on Schedule 3.22, the Acquired Shares have not been issued
in violation of, and none of the Acquired Shares are subject to, any purchase
option, call, right of first refusal, preemptive, subscription or similar rights
under any provision of Applicable Law, the Organizational Documents of the
applicable Asian Company, any contract, agreement or instrument to which the
applicable Asian Company is subject, bound or a party or otherwise. Except as
set forth on Schedule 3.22, there are no outstanding warrants, options, rights,
"phantom" stock rights, agreements, convertible or exchangeable securities or
other commitments (other than this Agreement) (i) pursuant to which Lyondell or
any Asian Company is or may become obligated to issue, sell, purchase, return or
redeem any shares of capital stock or other securities of the Asian Companies or
(ii) that give any person (other than the Asian Venture Partners) the right to
receive any benefits or rights similar to any rights enjoyed by or accruing to
the holders of shares of capital stock of the Asian Companies. Except as set
forth in Schedule 3.22, there are no equity securities of the Asian Companies
reserved for issuance for any purpose. Except as set forth in Schedule 3.22,
there are no outstanding bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which stockholders of any of the Asian
Companies may vote.
46
SECTION 3.23. Equity Interests. The Asian Companies do not directly or
----------------
indirectly own any capital stock of or other equity interests in any
corporation, partnership or other Person and none of the Asian Companies is a
member of or participant in any partnership, joint venture or similar Person.
SECTION 3.24. Change of Control. Lyondell Singapore Pte, Ltd. is not
-----------------
bound by any contract which contains a change of control provision or which
could otherwise be adversely affected by the assignment of the Acquired Shares,
other than such contracts that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Polyols Business Material Adverse
Effect.
ARTICLE IV
Covenants
---------
SECTION 4.01. Collection of Receivables. (a) From and after the
-------------------------
Closing, Purchaser shall have the right and authority to collect for its own
account all Included Receivables and to endorse with the name of Lyondell or the
Lyondell Selling Subsidiaries, as applicable, any checks or drafts received with
respect to any Included Receivables. Lyondell and the Lyondell Selling
Subsidiaries shall promptly deliver to Purchaser any cash or other property
received directly or indirectly by it with respect to the Included Receivables.
Unless otherwise specified by the payor, Purchaser shall first apply collections
with respect to the Included Receivables to the oldest Included Receivables owed
by such payee. Credits for price, volume or returned products adjustments that
are authorized by Purchaser shall be treated as collections in an amount equal
to the value of such adjustments. Promptly after the Closing, Purchaser shall
notify Lyondell of any Included Receivable that has not been collected within 60
days after its due date. If any Included Receivables have not been collected by
Purchaser within 60 days after its due date, Lyondell shall at the request of
Purchaser promptly purchase such Included Receivables from Purchaser; provided,
--------
that Lyondell shall not be required to repurchase any Included Receivable which
Purchaser has not requested Lyondell to repurchase within 90 days after such
Included Receivable's due date. Notwithstanding the immediately prior sentence,
Purchaser shall have the right to require Lyondell to purchase any Included
Receivable that has become due prior to the Closing Date within (x) 30 days
after the Closing Date with respect to any such Included Receivable
47
that is owed in connection with U.S. operations or (y) 60 days after the Closing
Date with respect to any such Included Receivable that is owed in connection
with non-U.S. operations.
(b) Purchaser shall reasonably cooperate with Lyondell to collect from
the applicable payee any Included Receivables repurchased by Lyondell pursuant
to Section 4.01(a). Purchaser shall promptly deliver to Lyondell any cash or
other property received by it from the applicable payee with respect to any
Included Receivables repurchased by Lyondell pursuant to Section 4.01(a).
(c) Purchaser shall not restrict or otherwise interfere with Lyondell
in Lyondell's attempts to collect from the applicable payees any Included
Receivables repurchased by Lyondell pursuant to Section 4.01(a); provided, that,
--------
if requested at any time by Purchaser, Lyondell shall inform Purchaser of its
collection activities and plans with respect to those Included Receivables in an
original amount greater than $25,000.
(d) Lyondell shall provide immediately prior to the Closing, and
Purchaser shall provide monthly thereafter, an aging analysis of Included
Receivables.
(e) All intercompany receivables attributable to the Acquired Assets
and the Acquired Shares shall be paid in full and discharged by Lyondell prior
to the Closing.
SECTION 4.02. Bulk Transfer Laws. Purchaser hereby waives compliance
------------------
by Lyondell and the Lyondell Selling Subsidiaries with the provisions of any so-
called "bulk transfer law" of any jurisdiction in connection with the sale of
the Acquired Assets to Purchaser. Lyondell hereby waives compliance by Purchaser
and the Purchaser Designees with the provisions of any so-called "bulk transfer
law" of any jurisdiction in connection with the sale of the Acquired Assets to
Purchaser.
SECTION 4.03. Joint Access to Records. (a) Purchaser and Lyondell
-----------------------
shall cooperate with each other to determine whether certain Records (such as
invoices) transferred to Purchaser pursuant to Section 1.02(a)(xiii) shall be
located at Lyondell's facilities for the convenience of both parties. If the
parties agree to do so with respect to any such Records, then Lyondell shall
give Purchaser and its authorized representatives access to such Records during
normal business hours and will instruct its employees and representatives to
cooperate with Purchaser to enable Purchaser and its authorized representatives
to
48
review or obtain such Records. Purchaser shall be solely responsible for its own
costs in connection with review of such Records and any reasonable costs
incurred by Lyondell directly related to Purchaser reviewing such Records
(including copying costs and retrieval costs, but excluding costs for warehouse
space or utilities). Lyondell covenants that it will not destroy any such
Records without giving Purchaser reasonable notice of its intentions and the
reasonable opportunity to remove such Records from Lyondell's facilities if
Purchaser elects to do so.
(b) Purchaser shall give Lyondell and its authorized representatives
access to those Records that Lyondell may reasonably request to review and copy
in connection with any pending or threatened Proceeding involving Lyondell or
any of its Affiliates. Purchaser shall provide access to such Records during
normal business hours and will instruct its employees and representatives to
cooperate with Lyondell to permit it to review and copy such Records. Lyondell
shall be solely responsible for its own costs in connection with the review of
such Records and any reasonable costs incurred by Purchaser directly related to
Lyondell reviewing such Records (including copying costs and retrieval costs,
but excluding cost for warehouse space or utilities). Purchaser covenants that
it will not destroy any such Records except in accordance with its normal
retention policies. Notwithstanding the immediately preceding sentence,
Purchaser will not destroy any such Records that Lyondell reasonably requests
not be destroyed because of any pending or threatened Proceeding involving
Lyondell or any of its Affiliates; provided, that Purchaser may destroy such
--------
Records after resolution of such pending Proceeding (or with respect to a
threatened Proceeding, after such Proceeding is no longer threatened or
otherwise resolved) unless Lyondell reasonably objects.
SECTION 4.04. Further Assurances. From time to time, as and when
------------------
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions, as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement, including, in the case of Lyondell and the
Lyondell Selling Subsidiaries, executing and delivering to Purchaser such deeds,
bills of sale, patent and patent application assignments, trademarks and
trademark application assignments and other instruments as Purchaser or its
counsel may reasonably request as necessary or desirable for such purpose.
49
SECTION 4.05. Names Following Closing. Subject to receiving any
-----------------------
applicable consents, Purchaser shall promptly amend the constitutive documents
of the Asian Companies to change their names to names not including or similar
to the name Lyondell.
SECTION 4.06. ▇▇▇▇▇▇▇▇▇ Contract. Lyondell shall reimburse Purchaser
------------------
for each payment made by Purchaser in respect of the "Reactor Cost" (as defined
in Section 2 of the ▇▇▇▇▇▇▇▇▇ Processing Agreement) pursuant to Sections 2 and
12 of the ▇▇▇▇▇▇▇▇▇ Processing Agreement if and to the extent Purchaser makes
such payment (each monthly payment being approximately $202,700 as of November
16, 1999, excluding any adjustments to such amount pursuant to Sections 6(c) and
12 of the ▇▇▇▇▇▇▇▇▇ Processing Agreement). Until the Reactor Cost is paid in
full, Purchaser will submit an invoice to Lyondell monthly in the amount of the
"Reactor Cost Monthly Payment" then payable under Sections 2 and 12 of the
▇▇▇▇▇▇▇▇▇ Processing Agreement for the immediately preceding month. Such invoice
shall also set forth the due date for such payment, which date will be the date
on which the Reactor Cost Monthly Payment is due and payable pursuant to Section
12 of the ▇▇▇▇▇▇▇▇▇ Processing Agreement. Section 2 of the ▇▇▇▇▇▇▇▇▇ Processing
Agreement contemplates that the Reactor Cost may be prepaid without penalty. At
Lyondell's request, Purchaser will cooperate with Lyondell to enable Lyondell to
effect any such prepayment if Lyondell elects to do so, so long as such
cooperation will not result in any cost to Purchaser. Section 12 of the
▇▇▇▇▇▇▇▇▇ Processing Agreement also contemplates that all invoices under the
▇▇▇▇▇▇▇▇▇ Processing Agreement will be reconciled at the end of each "Quarter"
to reflect any reimbursement of the Reactor Cost Monthly Payment pursuant to
Section 6(c) of the ▇▇▇▇▇▇▇▇▇ Processing Agreement. To the extent there are any
such adjustments pursuant to Sections 6(c) and 12 of the ▇▇▇▇▇▇▇▇▇ Processing
Agreement that are paid in cash instead of an adjustment to the next monthly
invoice (for example, if there are no further monthly invoices on which to make
such adjustment), Purchaser shall promptly pay over such amount to Lyondell. In
no event shall the failure by Purchaser to timely submit an invoice to Lyondell
relieve Lyondell of its obligation under this Section.
"▇▇▇▇▇▇▇▇▇ Processing Agreement" means the Processing Agreement dated
------------------------------
as of April 20, 1998 by and between ARCO Chemical Company, a Delaware
corporation, and ▇▇▇▇▇▇▇▇▇ Co., a Virginia corporation, providing for the toll
manufacturing of certain Polyols products.
50
SECTION 4.07. Post-Closing Cooperation. (a) Lyondell and Purchaser
------------------------
shall cooperate with each other, and shall cause their officers, employees,
agents, auditors and representatives to cooperate with each other, after the
Closing to ensure the orderly transition of the Polyols Business from Lyondell
to Purchaser and to minimize any disruption to the Polyols Business and the
other respective businesses of Lyondell and Purchaser that might result from the
transactions contemplated hereby. After the Closing, upon reasonable written
notice, Purchaser and Lyondell shall furnish or cause to be furnished to each
other and their employees, counsel, auditors and representatives access, during
normal business hours, such information and assistance relating to the Polyols
Business (to the extent within the control of such party) as is reasonably
necessary for Purchaser's financial reporting and accounting matters. Nothing in
this Section 4.07 provides to Purchaser any audit rights not provided herein or
in any other Transaction Documents nor does it expand on any such audit rights.
(b) After the Closing, upon reasonable written notice, Lyondell and
Purchaser shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Acquired Assets (including, access to books and
records) as is reasonably necessary for the filing of all Tax Returns, and
making of any election related to Taxes, the preparation for any audit by any
Taxing Authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax Return. Lyondell and Purchaser shall cooperate
with each other in the conduct of any audit or other proceeding relating to
Taxes involving the Polyols Business.
SECTION 4.08. Employee and Benefit Plan Matters. (a) With respect to
---------------------------------
the Active Employees and Inactive Employees listed on Schedules 3.16(b)(i) and
3.16(b)(ii) and any other employee of the Polyols Business mutually agreed upon
by Lyondell and Purchaser, except as restricted by Applicable Law, within 135
days after November 16, 1999 Purchaser will give notice to Lyondell of the names
of those Active Employees and Inactive Employees to whom Purchaser intends to
offer employment. Purchaser shall offer employment to those Active Employees and
Inactive Employees it has identified prior to the Closing within 30 days after
the notice to Lyondell provided for above. An Inactive Employee's employment
offer shall be conditioned on his or her return to active service on terms and
conditions determined by Purchaser that are consistent with Purchaser's normal
return to work practices. Each Active Employee and Inactive Employee to whom
Purchaser extends an employment
51
offer and who accepts Purchaser's offer and each EU Employee and each Asia
Employee shall be referred to as an "Offered Employee". Except as otherwise
----------------
provided herein, employment of Offered Employees shall be effective as of the
Closing Date on terms and conditions determined by Purchaser to the extent not
inconsistent with Applicable Law. Employment of Offered Employees providing
transition services to Purchaser pursuant to transition services agreements to
be entered into between Lyondell and Purchaser (or their respective Affiliates)
shall be effective at the time such transition services are completed pursuant
to the terms of such transition services agreements and all applicable
provisions of this Section 4.08 shall become effective at such date with respect
to such Offered Employees (and not on the Closing Date). Those Active Employees
and Inactive Employees who do not accept Purchaser's employment offer or who are
not offered employment by Purchaser shall remain employees of Lyondell.
Purchaser and Lyondell shall cooperate to enable Purchaser to begin its
interviewing and evaluation process of Active Employees in order for Purchaser
to determine the offer of employment to be made to such individuals. Lyondell
will use its Reasonable Best Efforts to cause all such employees who are offered
employment by Purchaser to accept such offers. Except as otherwise mutually
agreed between Purchaser and Lyondell, Lyondell shall neither discourage any
such employee from accepting such offer of employment nor solicit (or attempt to
solicit) any such employee to remain an employee of Lyondell or its Affiliates.
"Active Employees" means all employees on Schedule 3.16(b)(i) or 3.16(b)(ii),
----------------
other than EU Employees and Asia Employees, who are in active employment with
Lyondell or a Lyondell Selling Subsidiary as of the Closing Date. "Inactive
--------
Employees" means all employees (other than former employees) on Schedule
---------
3.16(b)(i) or 3.16(b)(ii), other than EU Employees and Asia Employees, who are
not in active employment with Lyondell or a Lyondell Selling Subsidiary as of
the Closing Date but who are on an authorized leave of absence determined in a
manner consistent with Lyondell's leave of absence policies then in effect. "EU
--
Employees" means the employees listed on Schedule 3.16(b)(i) to whom the
---------
European Union Directive is applicable. "Asia Employees" means the employees
--------------
listed on Schedule 3.16(b)(i) and 3.16(b)(ii) who are employed at one of the
Asian Companies.
(b) (i) Purchaser acknowledges and agrees that pursuant to the
European Union Acquired Rights Directive (the "European Union Directive"), the
------------------------
employment contracts between Lyondell or its Affiliates, as the case may be, and
its EU Employees and any CBAs relating to those employees will remain in effect
on and after the Closing Date as if
52
originally made between Purchaser or its Affiliates, as the case may be, and the
EU Employees or between Purchaser or its Affiliates, as the case may be, and the
relevant trade union or works council, as the case may be.
(ii) Lyondell and its Affiliates shall discharge all obligations and
liabilities of the employer with respect to the EU Employees up to the
Closing Date.
(iii) Purchaser and its Affiliates shall discharge all obligations and
liabilities of the employer with respect to the EU Employees on and after
the Closing Date.
(iv) Lyondell, Purchaser and their respective Affiliates shall
observe their respective obligations to inform and consult with the EU
Employees and their representatives pursuant to the European Union
Directive with respect to the transactions contemplated by this Agreement.
Lyondell and Purchaser shall provide information to each other as may
reasonably be required to enable each other to meet their respective
obligations to consult with the EU Employees and their representatives
pursuant to the European Union Directive.
(c) Subject to Section 4.08(b), Purchaser will provide coverage for
Offered Employees under its employee benefit plans and programs and its
incentive compensation plans and programs on the same basis in the aggregate as
that provided to similarly situated employees of Purchaser, except that an
Offered Employee who has received a payment under Lyondell's Change of Control
Plan shall not (except as otherwise required by Applicable Law) be eligible to
participate in any Purchaser severance plan or programs until the Offered
Employee has completed 12 months of actual Purchaser employment. Each Offered
Employee shall be given credit, without duplication, for all service with
Lyondell or any Affiliate of Lyondell (or service credited by Lyondell or any
Affiliate of Lyondell) under (i) all employee benefit plans, programs and
policies, and fringe benefits of Purchaser in which that employee becomes a
participant for purposes of eligibility (including eligibility for post-
retirement medical insurance coverage under Purchaser's applicable post-
retirement medical plans and arrangements as provided in Section 4.08(h)) and
vesting, but, except as provided in Section 4.08(e) or Section 4.08(f), not for
purposes of calculating benefit accruals under Purchaser's defined benefit
pension plan and (ii) Purchaser's vacation, service award and severance plans
53
for purposes of calculating the amount of such Offered Employee's benefits under
such plans.
(d) Purchaser shall waive any preexisting condition limitations for
such conditions covered under Lyondell's medical, health or dental plans and
shall honor any deductible and out-of-pocket expenses incurred by Offered
Employees and their dependents under Lyondell's medical, dental or health plans
during the portion of the calendar year preceding the Closing Date. Offered
Employees shall be eligible for benefits up to the maximum benefit payment
limitation contained in Purchaser's medical, health or dental plans, without
offset for any prior benefit payment under Lyondell's medical, health or dental
plans. Purchaser shall waive any medical certification under its group term life
insurance plan or disability plans for each Offered Employee up to the amount of
coverage such Offered Employee had under Lyondell's life insurance plan or
disability plans (but subject to any limits on the maximum amount of coverage
under Purchaser's life insurance plan or disability plans).
(e) Effective as of the Closing Date, each Offered Employee who is
based in the United States will be eligible to participate in the Bayer Corp.
Pension Plan (the "Bayer Corp. Pension Plan") in accordance with the terms of
------------------------
such plan. An Offered Employee's benefits under the Bayer Corp. Pension Plan
will be determined under whichever of the two formulas results in a greater
benefit: (i) the benefit determined under the Bayer Corp. Pension Plan based on
all benefit service credited by Lyondell under the Lyondell Pension Plan plus
all future benefit service with Purchaser reduced by the accrued benefit under
the Lyondell Pension Plan as of the Closing Date; or (ii) future services only
under the Bayer Corp. Pension Plan.
(f) (i) With regard to Offered Employees based in countries other than
the United States, Purchaser, or a Purchaser Designee, will assume all existing
retirement and life insurance benefit liabilities and obligations in respect of
such Offered Employees, consistent with Lyondell's Foreign Plans and the
Applicable Law of the countries which govern those plans. As soon as practicable
after the Closing Date, (A) Lyondell will deliver to Purchaser in respect of
Foreign Plans that are defined benefit plans, a valuation for each such plan of
the accrued pension and retirement obligations owed by Lyondell to or in respect
of the Offered Employees thereunder as of the Closing Date and (B) the plan
assets of those Foreign Plans (as determined pursuant to Section 4.08(f)(ii) and
(iii)) will be transferred to the relevant pension and investment
54
vehicles as directed by Purchaser or, where applicable, by the Offered
Employees.
In respect of Foreign Plans that are defined contribution plans, the
plan assets (i.e., the account balances thereof) will be transferred by Lyondell
to the relevant funds as directed by Purchaser or, where applicable, by the
applicable Offered Employees.
(ii) The plan assets of Lyondell's Foreign Plans that are defined
benefit plans and that will be transferred to Purchaser, or a Purchaser
Designee, pursuant to this Section 4.08(f) shall be determined, in
accordance with the Applicable Laws of the respective countries governing
those plans. The following specific funding requirements are agreed:
. United Kingdom-- minimum funding requirement ;
. Netherlands-- minimum reserve required to be held; and
Except as provided in this Section 4.08(f), Lyondell will have no other
obligation to transfer any plan assets to Purchaser or its Affiliates with
respect to the Foreign Plans.
(iii) Purchaser, or a Purchaser Designee, will assume all the
responsibilities and obligations as the sponsoring employer of the Lyondell
Products Europe Inc. Pension Plan and the PT Lyondell ▇▇▇▇ Pension Plan
effective as of the Closing Date. Lyondell and Purchaser agree to sign the
necessary documentation to give effect to the change of sponsoring employer
and Lyondell agrees to transfer the plan assets held by these plans to
Purchaser, or a Purchaser Designee, in each case, as soon as practicable
after the Closing Date. To the extent that Lyondell has prepaid the annual
premium for any of these plans, Purchaser, or a Purchaser Designee, shall
promptly reimburse Lyondell in the amount of annual premium equal to the
proportional annual premium for the balance of the applicable policy year
after the Closing Date.
(iv) For the avoidance of doubt, the plan assets referred to in the
preceding subsections of this Section 4.08(f) shall include the insurance
policies or portions of insurance policies associated with such Foreign
Plans.
(v) If Purchaser's designated actuary ("Purchaser's Actuary")
-------------------
notifies Lyondell's designated
55
actuary ("Lyondell's Actuary") that he does not agree with Lyondell's
------------------
Actuary's assumptions in respect of the valuations required under this
Section 4.08(f), Lyondell and Purchaser will use their Reasonable Best
Efforts to ensure that their respective Actuaries negotiate with each other
in good faith with a view to agreeing on the assumptions to be used in
respect of such required valuation. If, however, Purchaser's Actuary and
Lyondell's Actuary fail to agree within 2 months after the later of the
date of receipt of Lyondell's proposed valuation and the date of receipt of
all information which Purchaser's Actuary reasonably requires, the dispute
may, at the option of either Lyondell or Purchaser, be referred to an
independent Actuary selected and agreed to by Purchaser's Actuary and
Lyondell's Actuary (the "Independent Actuary"). In such event, the
-------------------
Independent Actuary will certify the assumptions to be used in respect of
the required valuation. Lyondell and Purchaser will be responsible for the
costs of their respective Actuaries and shall share 50/50 the cost of the
Independent Actuary.
(vi) With respect to Lyondell's pension liabilities regarding non-US
Offered Employees as of the Closing Date and to the extent such liabilities
are assumed by Purchaser in accordance with Applicable Law, it is intended
that related assets be transferred to Purchaser or the appropriate funding
vehicles as required under Applicable Law. To the extent that there is a
difference between the minimum funding requirement in any country and the
related accumulated benefit obligation for the underlying liabilities at
the Closing Date, Purchaser and Lyondell will, based on the provision for
actuarial valuations in Section 4.08(f)(v), work together to calculate the
difference between the two valuations and will share any differences on a
50/50 basis.
(g) This Agreement shall not prevent Lyondell from implementing any
normally scheduled pay increase prior to the Closing. Lyondell shall pay all
compensation to Offered Employees earned as of the Closing Date. Lyondell shall
pay to each Offered Employee who does not receive a payment under Lyondell's
Change of Control Plan an amount equal to the pro-rated portion of any annual
cash bonus that would have been payable to such Offered Employee under the terms
and conditions of Lyondell's employee bonus plans had such Offered Employee
remained eligible to participate in the plan and remained in Lyondell's
employment through the end of the period required under Lyondell's employee
bonus plans. Such payment shall be paid to such Offered Employee
56
at the time any bonus payments are made to Lyondell's employees under the
Lyondell employee bonus plans. For purposes of this Section 4.08(g), "pro-rated
portion" shall be calculated based on the percentage of the bonus period that
such Offered Employee was employed by Lyondell during that calendar year.
(h) Notwithstanding Section 4.08(c), Lyondell will retain liability
for and will pay post-retirement medical and life insurance benefits under terms
and conditions applicable to Lyondell retirees generally to those Offered
Employees who are based in the United States immediately prior to the Closing
Date and who will have attained 55 years of age and ten years of service with
Lyondell or its Affiliates as of the Closing Date or who, within 12 months
following the Closing Date, will have attained 55 years of age and ten years of
service (counting service with Purchaser from and after the Closing as if it
were rendered to Lyondell). Purchaser shall provide Offered Employees who are
not otherwise eligible under Lyondell Benefit Plans and who meet the eligibility
requirements for post-retirement medical and life insurance benefits under
Purchaser Corp.'s applicable plans with post-retirement medical insurance
coverage under Purchaser Corp.'s plans, giving credit to Offered Employees for
their service prior to the Closing with Lyondell or any Lyondell Affiliate.
(i) Effective as of the Closing Date, Lyondell shall vest each Offered
Employee in his or her accrued benefit and account balance, if any, under
Lyondell's applicable U.S. tax-qualified defined benefit and defined
contribution plans.
(j) Lyondell shall retain all liabilities and obligations it may have
to make payments to the eligible Offered Employees under Lyondell's Change of
Control Plan which become payable solely as a result of the change of control of
the Polyols Business contemplated by this Agreement.
(i) Lyondell shall retain all liabilities and obligations to make
severance payments under Lyondell Benefit Plans (including Lyondell's
Change of Control Plan), Applicable Law or controlling legal precedent
(e.g., court decisions, social laws or works council requirements), to any
Active Employee or Inactive Employee (A) who is not offered employment with
Purchaser or (B) who does not accept an offer of employment with Purchaser,
or to any employee whose employment terminates as a result of bumping or a
similar process which directly results from an Active
57
Employee's or Inactive Employee's failure to receive, or rejection of a
Purchaser offer.
(ii) Purchaser shall promptly reimburse Lyondell for the amount of
the severance paid pursuant to Section 4.08(j)(i) if the termination of
employment takes place within 180 days after the later of (A) the Closing
Date or (B) the end of transition services, if applicable (the amount of
such reimbursement in respect of any EU Employee providing transition
services shall include payments made in lieu of notice, if any). The amount
of reimbursement shall be the amount of severance payable under Lyondell
Benefit Plans (other than the Change of Control Plan), Applicable Law or
controlling legal precedent (e.g., court decisions, social laws or works
council requirements) and, if the severance is paid as a result of bumping
or similar process, the amount of reimbursement shall not exceed the
severance which would have been payable to the employee originally
identified for termination.
(iii) Lyondell will reimburse Purchaser in an amount equal to 50% of
each severance payment made by Purchaser to an Offered Employee who is
terminated by Purchaser within the twelve month period following the
Closing Date, if the employee did not receive payment under Lyondell's
Change of Control Plan. The amount of reimbursement shall be 50% of the
amount of severance payable under Purchaser's benefit plans, Applicable Law
or controlling legal precedent (e.g., court decisions, social laws or work
council requirements).
(k) During the calendar year 2000, each Offered Employee's vacation
entitlement with Purchaser shall be equal to any unused vacation days remaining
for that employee under Lyondell's vacation policy for calendar year 2000. To
the extent permitted by Applicable Law, Offered Employees shall be eligible for
vacation under Purchaser's vacation policy beginning in the calendar year 2001.
(l) Lyondell shall consult with Purchaser and keep Purchaser timely
apprised of all negotiations by Lyondell or its Affiliates with respect to each
newly negotiated or existing collective CBA covering employees of the Polyols
Business. With respect to the Lyondell employees of the Polyols Business located
at Rieme and Newtown Square, any new CBA or extension or substantive
modification of an existing CBA covering those employees shall be subject to
Purchaser's final approval according to Applicable Law.
58
(m) Lyondell shall retain all liabilities and obligations with respect
to any deferred compensation under Lyondell's deferral plans or otherwise or
liabilities or obligations related to Lyondell's supplemental retirement plans
which is credited as of the Closing Date to Offered Employees and shall make
payments thereof to the individuals entitled thereto in accordance with the
terms of the applicable Lyondell Benefit Plans. If, by Applicable Law or
otherwise, Purchaser has to make such payments, Lyondell shall promptly
reimburse Purchaser for such payments actually made.
(n) During the period from November 16, 1999 through the Closing Date,
Lyondell shall not transfer (or cause to be transferred) the employment of any
individual listed on Schedule 3.16(b)(i) or (ii) to another business of Lyondell
or any of its Affiliates without the prior written consent of Purchaser.
(o) Lyondell's obligation to make payments to any employee under the
Change of Control Plan shall be determined solely by the terms of the Change of
Control Plan.
SECTION 4.09. Use of Trademarks and Trade Names on Existing Inventory.
-------------------------------------------------------
(a) After the Closing, Purchaser and Purchaser Designees shall have the right to
sell existing inventory and to use existing packaging, labeling, containers,
supplies, advertising materials, technical data sheets and any similar materials
bearing the trade name Lyondell Chemical Company, Lyondell Petrochemical
Company, the trademarks Lyondell and Lyondell Cube Design, and/or other trade
names and trademarks of Lyondell, until the earlier of (i) eighteen months after
the Closing Date and (ii) the date existing stocks are exhausted. Purchaser and
Purchaser Designees shall take reasonable measures to inform purchasers that
Purchaser or Purchaser Designees is the new source of the goods. During the
period of use by Purchaser and Purchaser Designees of said trade names and
trademarks, Purchaser and Purchaser Designees shall retain and conform to
Lyondell's established quality standards and formulations for each of the goods.
(b) Purchaser and/or Purchaser Designees shall not, by reason of their
use of materials pursuant to this Section 4.09, derive any right, title or
interest in or to Lyondell's said trade names and trademarks, nor shall
Purchaser and Purchaser Designees challenge the validity or ownership by
Lyondell of said trade names and trademarks. Neither Purchaser nor Purchaser
Designees shall attempt to register Lyondell's above-designated trademarks in
any
59
country. Purchaser and Purchaser Designees shall cooperate with Lyondell to
execute such documents which Lyondell determines are necessary for filing in any
country to protect Lyondell's rights in Lyondell's said trade names and
trademarks.
(c) Neither Purchaser nor Purchaser Designees shall be obligated to
change the said trade names and trademarks on goods in the hands of dealers,
distributors and customers at the time of the expiration of the time period set
forth in subsection (a) above.
(d) Purchaser and Purchaser Designees agree to use reasonable efforts
to cease using Lyondell's said trade names and trademarks on buildings, cars,
trucks and other fixed assets as soon as practicable, but in no event shall such
use continue for more than nine months after the Closing Date.
(e) The prohibitions set forth in this Section 4.09 may be amended or
extended only with the written consent of Lyondell; provided, that such consent
--------
will not be unreasonably withheld if Purchaser and Purchaser Designees cannot
exhaust existing inventory.
SECTION 4.10. Financial Information. Except as provided below, for
---------------------
each fiscal quarter of Lyondell ending after November 16, 1999 and prior to the
Closing Date, Lyondell shall furnish to Purchaser, within the earlier of (i) 50
days after the end of each such quarter or (y) 5 days after the date on which
Lyondell files with the SEC its consolidated financial information with respect
to such quarter, unaudited financial statements for the Polyols Business as at
and for the fiscal quarter then ended in the form of the Financial Statements
(the "Interim Financial Statements"), together with supplemental financial
----------------------------
information in the form of the Supplemental Financial Schedules (the "Interim
-------
Supplemental Financial Schedules"); provided, however, if the Closing Date is
-------------------------------- --------
less than 45 days after the end of any such fiscal quarter, Lyondell shall, in
respect of that quarter, furnish to Purchaser on or before 5 days prior to the
Closing only the Interim Financial Statements (no Interim Supplemental Financial
Schedules being required hereunder); provided further, that the Interim
-------- -------
Financial Statements (but not the Interim Supplemental Financial Schedules) for
the fiscal quarter ending December 31, 1999 shall be audited and provided to
Purchaser on or before 90 days after the end of such quarter. The Interim
Financial Statements shall be derived from Lyondell's consolidated financial
statements filed or to be filed on Form 10-K or 10-Q, as the case may be, with
60
the SEC in respect of the applicable fiscal periods and Lyondell's books and
records, which will be prepared in accordance with GAAP, except that accounts
receivable may include certain amounts sold to Lyondell Funding LLC, which is
not consolidated with Lyondell for financial reporting purposes. Each set of
Interim Financial Statements will present fairly and reasonably the results of
operations and financial condition of the Polyols Business as of and for the
fiscal period then ended under GAAP (except as described in the notes thereto).
SECTION 4.11. Proceedings; Employee and Labor Matters. Lyondell
---------------------------------------
covenants that it will promptly disclose in writing to Purchaser any pending or
threatened Proceeding, claim or other matter that would have been disclosed on
Schedule 3.12 or Schedule 3.16(a) or as an exception to Section 3.15(b)(iii) if
such representations were made as of the date Lyondell learns of such pending or
threatened Proceeding, claim or other matters. Lyondell acknowledges that on the
Closing Date it shall be deemed to make the representations set forth in Section
3.12, Section 3.16(a) and Section 3.15(b)(iii) as of the Closing Date, qualified
by Schedule 3.12 or Schedule 3.16(a), as applicable, and any pending or
threatened Proceeding, claims or other matters subsequently disclosed by
Lyondell to Purchaser pursuant to this provision after November 16, 1999 and
prior to the Closing.
SECTION 4.12. ▇▇▇▇ Impoundment. At the Closing, Lyondell shall provide
----------------
Purchaser with a copy of the records documenting the quantities or volumes of
ash, sludge, lime, fly-ash, bottom-ash or other materials or wastes deposited at
the ▇▇▇▇ Impoundment or earmarked by Lyondell prior to the Closing to be
deposited at the ▇▇▇▇ Impoundment.
SECTION 4.13. No Indebtedness of Lyondell Singapore Pte, Ltd. Lyondell
----------------------------------------------
and Lyondell Singapore Pte, Ltd. agree that on or before the Closing Date,
Lyondell Singapore Pte Ltd. will have discharged all its indebtedness.
ARTICLE V
[INTENTIONALLY DELETED]
61
ARTICLE VI
Indemnification
---------------
SECTION 6.01. Indemnification by Lyondell. (a) From and after the
---------------------------
Closing, Lyondell and the Lyondell Selling Subsidiaries, jointly and severally,
shall indemnify Purchaser and its Affiliates and each of their respective
officers, directors, employees, stockholders, agents and representatives
against, and hold them harmless from, any Losses, as incurred (payable promptly
upon written request), arising from, in connection with or otherwise with
respect to:
(i) any breach of any representation or warranty of Lyondell or the
Lyondell Selling Shareholders that is contained in this Agreement or any
Polyols Transfer Document (it being agreed and acknowledged by the parties
that for purposes of Purchaser's right to indemnification pursuant to this
Section 6.01 the representations and warranties of Lyondell and the
Lyondell Selling Subsidiaries shall be deemed not qualified by any
references herein or therein to materiality generally or to whether or not
any breach results or may result in a Polyols Business Material Adverse
Effect; provided, that such references to materiality or Polyols Business
--------
Material Adverse Effect shall apply for purposes of determining whether
there has been a breach of a representation to the extent such references
are contained in such representations);
(ii) any breach of any covenant of Lyondell and the Lyondell Selling
Subsidiaries contained in this Agreement or in any Polyols Transfer
Document; and
(iii) any Excluded Liability.
(b) Lyondell and the Lyondell Selling Subsidiaries shall not have
any liability with respect to breaches of representations and warranties in this
Agreement or any Polyols Transfer Document:
(i) under clause (i) of Section 6.01(a) unless the aggregate of all
Losses for which Lyondell and the Lyondell Selling Subsidiaries would, but
for this clause (i), be liable exceeds on a cumulative basis an amount
equal to $40,000,000 (the "APA Threshold Amount"); but after such APA
--------------------
Threshold Amount is reached Lyondell shall be responsible for the full
amount of such Losses after the first $30,000,000. For purposes of this
Section 6.01(b)(i) Losses under
62
Section 3.13, to the extent they are not subject to 50:50 sharing under
Section 6.01 (b)(v) and Purchaser has not waived the Closing condition in
Section 5.11(b) of the Master Transaction Agreement, shall be included to
determine whether the APA Threshold Amount has been reached; provided
--------
however, for determining the amount payable to Purchaser, such included
-------
Losses related to Section 3.13 shall be reduced by $10,000,000 or such
lesser amount of such included Losses related to Section 3.13. For purposes
of clarification, Schedule II sets forth numerical examples with respect to
the preceding sentence. The APA Threshold Amount shall not apply to the
representations and warranties set forth in Sections 3.11, or 3.14(b). For
the avoidance of doubt, (A) any payments received by Purchaser or Losses
for which Purchaser is not responsible in respect of such Sections 3.11,
3.14(b) or any Excluded Liability, and (B) Losses under Section 3.13 which
are shared 50:50, shall not be included for purposes of calculating whether
the APA Threshold has been met.
(ii) under clause (i) of Section 6.01(a) for any individual items
where the Loss relating thereto is less than $35,000;
(iii) under clause (i) of Section 6.01(a) in excess of $300,000,000
(the "APA Cap"); provided, however, that this limitation shall not apply to
------- -----------------
the representations and warranties set forth in Sections 3.11 or 3.14(b);
(iv) under Section 6.01(a) to the extent the liability or obligation
arises as a result of any action taken or omitted to be taken by Purchaser
or any Purchaser Affiliates, except to the extent such action taken or
omitted to be taken is required under the terms of any Transaction
Document; and
(v) under clause (i) of Section 6.01(a) for breaches of Section 3.13
for either (A) any Losses in any amount less than $30,000,000 or (B) more
than 50% of the amount of Losses above $30,000,000 incurred by Purchaser
due to Lyondell's breaches of Section 3.13. In the event that Section 3.13
is breached to an extent that would give rise to a condition to Closing for
Purchaser under Section 5.11(b) of the Master Transaction Agreement, but
Purchaser chooses to waive such Closing condition and proceed with the
consummation of the Transactions despite such breach, Lyondell shall have
no obligation under this Article VI
63
to indemnify Purchaser for such breaches of Section 3.13.
(c) Lyondell's indemnification obligations with respect to Losses
arising out of or relating to (x) the Excluded Environmental Liabilities set
forth in Section 1.03(b)(xii) or (y) breaches of the representations or
warranties contained in Section 3.14(b) shall be, in each case, subject to the
following additional provisions:
(i) Lyondell shall be required to indemnify Purchaser for any
and all Losses that Purchaser proves arise out of or relate to the Excluded
Environmental Liabilities or to breaches of the representation or
warranties contained in Section 3.14(b);
(ii) Notwithstanding anything to the contrary contained in this
Agreement, Lyondell shall not be required to indemnify Purchaser for Losses
to the extent that such Losses were exacerbated by an action taken or
omitted to be taken by Purchaser or any Purchaser Affiliates or any of
their respective employees, agents or assignees, unless such action taken
or omitted to be taken is required by the terms of any of the Transaction
Documents. For the avoidance of doubt, exacerbation shall not include the
mere acceleration of the time at which a Loss arises, or the identification
of an Excluded Environmental Liability that gives rise to such Loss;
(iii) Notwithstanding anything to the contrary contained in this
Agreement, Lyondell shall not be required to indemnify Purchaser for Losses
to the extent that such Losses arise from or relate to an Environmental
Condition which first came into existence after the Closing Date, or a
noncompliance with Environmental Law, which noncompliance first occurred
after the Closing Date, unless and to the extent such Losses are (A)
otherwise Excluded Liabilities pursuant to this Agreement, (B) otherwise
relate to breaches of the representation or warranties contained in Section
3.14(b) or (C) otherwise required to be indemnified by Lyondell pursuant to
Section 6.01(c)(v);
(iv) If Purchaser makes an Environmental Claim in accordance with
the procedures set forth in Section 6.05, and Lyondell and Purchaser, after
good faith negotiations, dispute the extent to which such Loss is
indemnifiable under this Agreement, then either Purchaser or Lyondell may
elect to resolve the portion of such Loss that is in dispute (the "Disputed
--------
64
Environmental Loss") pursuant to the Dispute Resolution Procedures. If the
------------------
determination made pursuant to the Dispute Resolution Procedures is that
Purchaser has not proved that such Disputed Environmental Loss is
indemnifiable pursuant to this Agreement and Lyondell has not proved that
Lyondell is not responsible for such Disputed Environmental Loss pursuant
to this Agreement, the parties shall apportion such Disputed Environmental
Loss in accordance with Section 6.01(c)(iv)(A) - (D) below; provided,
--------
however, that any Disputed Environmental Loss relating to Section
-------
1.03(b)(xii)(A) shall not be apportioned in accordance with Section
6.01(c)(iv)(A) - (D).
(A) If Purchaser makes a claim on or prior to the fifth
anniversary of the Closing Date, Lyondell shall be responsible for one
hundred percent (100%) of any such Disputed Environmental Loss;
(B) If Purchaser makes a claim after the fifth anniversary
and on or prior to the tenth anniversary of the Closing Date, Lyondell
and Purchaser shall each be responsible for fifty percent (50%) of any
such Disputed Environmental Loss;
(C) If Purchaser makes a claim after the tenth anniversary
and on or prior to the fifteenth anniversary of the Closing Date,
Lyondell shall be responsible for twenty-five percent (25%) and
Purchaser shall be responsible for seventy-five percent (75%) of any
such Disputed Environmental Loss; and
(D) If Purchaser makes a claim on or after fifteenth
anniversary of the Closing Date, Purchaser shall be responsible for
one hundred percent (100%) of any such Disputed Environmental Loss.
(v) Lyondell shall bear the risk of, and be responsible for,
costs relating to Remediation Activities resulting from changes in
Environmental Laws that may occur after the Closing Date to the extent that
such Remediation Activities relate to Environmental Conditions existing on
or prior to the Closing Date and relating to soil or groundwater.
(vi) With respect to Losses in connection with the West Virginia
plants that arise out of or
65
relate to any Excluded Environmental Liabilities or a breach of Section
3.14(b):
(A) Purchaser may seek indemnification either (1) directly from
Lyondell pursuant to this Agreement or (2) at Lyondell's expense and
pursuant to this Section (c)(vi), from certain prior owners or
operators of the West Virginia Plant pursuant to the agreements
between Lyondell and such prior owners and operators that are
identified in Exhibit A (the "West Virginia Environmental
---------------------------
Indemnification Agreements").
--------------------------
(B) If Purchaser elects to seek indemnification directly from
Lyondell, Purchaser shall reassign its rights to seek indemnification
pursuant to the West Virginia Environmental Indemnification Agreements
and Lyondell shall pursue such indemnification to the extent it deems
appropriate. Purchaser shall cooperate with Lyondell in the pursuit of
such indemnification as set forth in Section 6.05(b), with Lyondell
being deemed the "indemnifying party" and Purchaser being deemed the
"indemnified party" for purposes thereof.
(C) If Purchaser elects to seek indemnification pursuant to the
West Virginia Environmental Indemnification Agreements, Purchaser
shall vigorously pursue such indemnification, and Lyondell shall
cooperate with Purchaser in such pursuit as set forth in Section
6.05(b), with Purchaser being the "indemnifying party" and Lyondell
being the "indemnified party" for purposes thereof. Purchaser shall
not agree to any settlement, compromise or discharge of such claims
pursuant to the West Virginia Environmental Indemnification Agreements
without the consent of Lyondell unless Purchaser, in writing (i)
waives any claim it may have against Lyondell and (ii) releases
Lyondell from any liability or responsibility with respect thereto,
which waiver or release must be in writing to be deemed effective. If
Purchaser does not so waive claims and release Lyondell, Purchaser
shall allow Lyondell to participate in the pursuit of such claims to
the extent Lyondell deems appropriate.
(D) To the extent Losses claimed by Purchaser pursuant to the
terms of this Section 6.01(c)(vi) are not fully indemnified in
66
accordance with Section 6.01(c)(vi)(C) (unless Purchaser waives its
claims and releases Lyondell as set forth in Section 6.01(c)(vi)(C),
in which case, Lyondell shall have no further liability with respect
thereto), Lyondell shall indemnify Purchaser for such Losses in
accordance with the terms of this Agreement. For the avoidance of
doubt, in the event that Lyondell acknowledges, acting in good faith,
or it is determined in accordance with the Dispute Resolution
Procedures, that Purchaser proved an Environmental Claim with respect
to the West Virginia plants, Lyondell shall be required to indemnify
Purchaser as provided herein and in accordance with the procedures of
Section 6.05, and shall not delay such indemnification pending the
prosecution or resolution of any claim for indemnification which
Lyondell may decide to pursue under the West Virginia Environmental
Indemnification Agreements.
(vii) Unless otherwise agreed by Lyondell and Purchaser in
accordance with Section 6.05(b), Lyondell's indemnification obligations for
Environmental Claims with respect to the correction of instances of
noncompliance with Environmental Law or Remediation Activities relating to
Environmental Conditions shall be limited to the most economical manner of
such correction of noncompliance or Remediation Activities, in accordance
with good engineering practices, but in no event less than is necessary to
comply with Environmental Law and, if required under Environmental Law,
obtain the approval of the Governmental Entity with jurisdiction over the
matter.
(viii) The standard of proof that will apply to any proof or
showing that must be made under Article VI, including the Dispute
Resolution Procedures, shall be a preponderance of the evidence.
(d) The following provisions shall also apply to Lyondell's
indemnification obligations under this Article VI:
(i) payments made by Lyondell under Article VII of the Master
Transaction Agreement shall be taken into account for purposes of
establishing whether or not the APA Cap has been reached; and
(ii) Losses that are included in Section 7.01(b)(ii) of the Master
Transaction Agreement for purposes of
67
calculating whether the Lyondell MTA Threshold Amount has been reached
shall be taken into account for purposes of establishing whether the APA
Threshold Amount has been reached.
(iii) For the avoidance of doubt, the purpose of Sections 6.01(d)(i)
and (ii) and Sections 7.01(c)(i) and (ii) of the Master Transaction
Agreement is to insure that (A) the APA Cap and the Lyondell MTA Cap are
considered together as one combined cap and (B) the APA Threshold Amount
and the Lyondell MTA Threshold Amount are considered together as one
combined threshold.
SECTION 6.02. Indemnification by Purchaser. From and after the
----------------------------
Closing, Purchaser and its Affiliates shall indemnify Lyondell and its
Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives against, and agrees to hold them
harmless from, any Loss, as incurred (payable promptly upon written request),
for or on account of or arising from or in connection with or otherwise with
respect to (i) any breach of any covenant of Purchaser or any Purchaser Designee
contained in this Agreement or in any Polyols Transfer Document and (ii) any
Assumed Liability. Purchaser shall indemnify and defend Lyondell from any and
all Losses relating to or arising out of the use by Purchaser of the name
"Lyondell" in violation of Section 4.05 or of the Lyondell tradenames and
trademarks pursuant to Section 4.09.
SECTION 6.03. Calculation of Losses; Mitigation; Limitation on
------------------------------------------------
Consequential Punitive and Exemplary Damages. (a) The amount of any Loss for
--------------------------------------------
which indemnification is provided under this Article VI shall be (i) increased
to take account of any net Tax cost incurred by the indemnified party arising
from the receipt of indemnity payments hereunder (grossed up for such increase)
and (ii) reduced to take account of any net Tax benefit realized by the
indemnified party arising from the incurrence or payment of any such Loss. In
computing the amount of any such Tax cost or Tax benefit, the indemnified party
shall be deemed to recognize all other items of income, gain, loss deduction or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence or payment of any indemnified Loss.
(b) Each of Purchaser and Lyondell shall attempt to mitigate and
shall cause each of its Affiliates to attempt to mitigate any Losses that such
Parent Party may suffer as a consequence of any matter giving rise to a right to
indemnification against the other Parent Party under this
68
Article VI by taking all actions which a reasonable person would undertake to
minimize or alleviate the amount of such Losses and the consequences thereof, as
if such person would be required to suffer the entire amount of such Losses and
the consequences thereof by itself, without recourse to any remedy against
another person, including pursuant to any right of indemnification hereunder,
provided that nothing in this Section 6.03(b) shall oblige either of Purchaser
and Lyondell or any of their respective Affiliates to seek recourse from its
insurers.
(c) Neither Parent Party nor their respective Affiliates shall be
liable to the other Parent Party under this Article VI for indemnification of
any punitive, consequential or exemplary damages with respect to claims between
such Parent Parties and their Affiliates; provided, however, that this Section
-------- -------
6.03(c) shall not be construed to limit either Parent Party's rights to
indemnification under this Article VI for punitive, consequential or exemplary
damages paid by such Parent Party in respect of a Third Party Claim.
SECTION 6.04. Termination of Indemnification. The obligations to
------------------------------
indemnify and hold harmless any party, (i) pursuant to Section 6.01(a)(i) shall
terminate when the applicable representation or warranty terminates pursuant to
Section 5.02, (ii) pursuant to Section 6.01(a)(ii) and Section 6.02, shall
terminate two years after the termination of the applicable covenant and (iii)
pursuant to the other clauses of Sections 6.01 and 6.02 shall not terminate;
provided, however, that such obligations to indemnify and hold harmless shall
-------- -------
not terminate with respect to any item as to which the Person to be indemnified
shall have, before the expiration of the applicable period, previously made a
claim by delivering a notice of such claim pursuant to Section 6.05 to the
Person to be providing the indemnification.
SECTION 6.05. Procedures. (a) In order for a party (the "indemnified
---------- -----------
party"), to be entitled to any indemnification provided for under this Agreement
-----
in respect of, arising out of or involving a claim made by any Person other than
a Parent Party or its Affiliate against the indemnified party (a "Third Party
-----------
Claim"), such indemnified party must notify the indemnifying party in writing
-----
(including copies of all papers served or delivered with respect to such claim)
of the Third Party Claim promptly following receipt by such indemnified party of
written notice of the Third Party Claim, which notice shall describe in
reasonable detail the nature of the Third Party Claim, an estimate of the amount
of damages attributable to the Third
69
Party Claim to the extent feasible and the basis of the indemnified party's
request for indemnification hereunder; provided, however, that failure to give
-------- -------
such notification shall not affect the indemnification provided hereunder except
to the extent the indemnifying party shall have been actually prejudiced as a
result of such failure (except that the indemnifying party shall not be liable
for any expenses incurred during the period in which the indemnified party
failed to give such notice). Thereafter, the indemnified party shall deliver to
the indemnifying party, promptly following the indemnified party's receipt
thereof, copies of all notices and documents (including court papers) received
by the indemnified party relating to the Third Party Claim.
(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
-------- -------
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof. If the
indemnifying party assumes such defense, the indemnified party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof (other than during any period in which the
indemnified party shall have failed to give notice of the Third Party Claim as
provided above). If the indemnifying party chooses to defend or prosecute a
Third Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
indemnifying party's request) the provision to the indemnifying party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the indemnifying party assumes the defense of a Third Party Claim, the
indemnified party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the indemnifying party's
prior written consent (which consent shall not be unreasonably withheld). If the
indemnifying party assumes
70
the defense of a Third Party Claim, the indemnified party shall agree to any
settlement, compromise or discharge of a Third Party Claim that the indemnifying
party may recommend and that by its terms obligates the indemnifying party to
pay the full amount of the liability in connection with such Third Party Claim,
which releases the indemnified party completely in connection with such Third
Party Claim and that would not otherwise adversely affect the indemnified party.
Notwithstanding the foregoing, the indemnifying party shall not be entitled to
assume the defense of any Third Party Claim (and shall be liable for the
reasonable fees and expenses of counsel incurred by the indemnified party in
defending such Third Party Claim) if the predominant remedy sought in the Third
Party Claim is for an order, injunction or other equitable relief or relief for
other than money damages against the indemnified party that the indemnified
party reasonably determines, after conferring with its outside counsel, cannot
be separated from any related claim for money damages. If such equitable relief
or other relief portion of the Third Party Claim can be so separated from that
for money damages, the indemnifying party shall be entitled to assume the
defense of the portion relating to money damages.
(c) In the event a Third Party Claim is brought in which the liability
as between the parties to this Agreement is alleged by the Person bringing such
claim to be joint, the parties shall cooperate in the joint defense of such
Third Party Claim and shall offer to each other such assistance as may
reasonably be requested in order to encourage the proper and adequate defense of
any such matter. Such joint defense shall be under the general management and
supervision of the party which would reasonably be expected to bear the greater
share of the liability, unless otherwise agreed; provided, however, that neither
-------- -------
Purchaser nor any of its Affiliates or Lyondell nor any of its Affiliates shall
settle or compromise any such joint defense without the consent of Lyondell or
Purchaser, as the case may be, which consent shall not be unreasonably withheld
or delayed. Any uninsured costs of such joint defense shall be borne as the
parties may agree, provided, however, that in the absence of such agreement, the
defense costs shall be borne by the party incurring such costs; provided
--------
further, however, that, if it is later determined that one party was entitled to
------- -------
indemnification for such liability under this Article VI, the other party shall
reimburse the party entitled to indemnification for all of its costs incurred in
connection with such defense.
(d) Other Claims. In the event any indemnified party should have a
------------
claim against any indemnifying party
71
under Section 6.01 or 6.02 that does not involve a Third Party Claim being
asserted against or sought to be collected from such indemnified party, the
indemnified party shall deliver written notice of such claim with reasonable
promptness to the indemnifying party which notice shall describe in reasonable
detail the nature of the claim, an estimate of the amount of damages
attributable to such claim to the extent feasible and the basis of the
indemnified party's request for indemnification hereunder. The failure by any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under Section 6.01 or 6.02, except to the extent that the indemnifying party
demonstrates that it has been actually prejudiced by such failure (except that
the indemnifying party shall not be liable for any expenses incurred during the
period in which the indemnified party failed to give such notice). If the
indemnifying party disputes its liability with respect to such claim, the
indemnifying party and the indemnified party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved in accordance with the Dispute
Resolution Procedures.
SECTION 6.06. Survival. The covenants contained in Sections 4.03,
--------
4.04, 4.06 and 4.07(b) shall survive the Closing and shall not terminate. Except
as provided in the preceding sentence, the representations, warranties,
covenants and agreements contained in this Agreement or in any certificates
delivered pursuant to this Agreement shall survive the Closing solely for
purposes of Article VI and shall terminate on the two year anniversary of the
Closing Date, except for (i) the representations and warranties in Section 3.02,
3.03(a) and 3.14(b), which shall not terminate, (ii) the representations and
warranties in Section 3.11, which shall terminate upon the termination of the
applicable statute of limitations and (iii) the representations and warranties
contained in Section 3.03(b) and 3.07, which shall terminate on the one year
anniversary of the Closing Date.
ARTICLE VII
SECTION 7.01. This Agreement is the Asset Purchase Agreement referred
to in the Master Transaction Agreement. Unless the context shall otherwise
require, terms used and not defined herein shall have the meanings assigned
thereto in the Defined Terms Index attached as
72
Appendix A hereto, which also contains Documentary Conventions which shall
govern this Agreement.
73
IN WITNESS WHEREOF, Lyondell, the Lyondell Selling Subsidiaries and
Purchaser have duly executed this Agreement as of the date first written above.
LYONDELL CHEMICAL COMPANY,
by
/s/ ▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇ ▇▇▇▇▇▇
Title: Senior Vice President,
Urethanes and
Performance Chemical
LYONDELL CHIMIE FRANCE SNC,
by
/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
LYONDELL TAIWAN, INC.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
LYONDELL INDONESIA, INC.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
LYONDELL SINGAPORE PTE LTD.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
74
ARCO CHEMICAL TECHNOLOGY, L.P.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
LYONDELL CHEMICAL WORLDWIDE, INC.,
by
/s/
-------------------------------------
Name:
Title:
LYONDELL CHEMICAL CANADA INC.,
by
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
LYONDELL GREATER CHINA, LTD.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
LYONDELL QUIMICA DO BRASIL, LTDA,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
LYONDELL ASIA PACIFIC, LTD.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LTD.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
LYONDELL CHEMICAL NEDERLAND, LTD.,
by
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
LYONDELL CHEMICAL PRODUCTS EUROPE, INC.,
by
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President
ARCO CHEMICAL PROPERTIES, L.P.
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
76
▇▇▇▇▇ ▇▇,
by
/s/ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Head of Business Group,
Polyurethanes
BAYER CORPORATION,
by
/s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: President of Polyurethanes
Division