EXHIBIT 4.2
EXHIBIT B
TO SECURITIES
PURCHASE AGREEMENT
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FORM OF
STOCKHOLDERS AGREEMENT
AMONG
LYONDELL CHEMICAL COMPANY,
AND
THE STOCKHOLDERS
AS DEFINED HEREIN
________, 2002
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TABLE OF CONTENTS
Page
SECTION 1 TERM ................................................................. 1
1.1 Term ................................................................ 1
1.2 Effect of Termination ............................................... 1
SECTION 2 STANDSTILL ........................................................... 2
2.1 Standstill .......................................................... 2
2.2 Exceptions .......................................................... 3
SECTION 3 VOTING PROVISIONS; BOARD APPOINTMENTS; GOVERNANCE
MATTERS ............................................................ 4
3.1 Voting Agreement .................................................... 4
3.2 Proxies and Voting Agreements ....................................... 4
3.3 Board Appointments .................................................. 4
3.4 Conversion of Shares of Series B Common Stock into Shares of Original
Common Stock ....................................................... 5
3.5 Number of Authorized Shares of Series B Common Stock ................ 6
SECTION 4 TRANSFERS ............................................................ 6
4.1 Transfers ........................................................... 6
4.2 Compliance Certificate; Adoption Agreement .......................... 7
4.3 Invalid Transfers ................................................... 7
4.4 Compliance with Securities Laws ..................................... 8
4.5 Restrictive Legends ................................................. 8
SECTION 5 REGISTRATION RIGHTS; ADJUSTMENTS ..................................... 10
5.1 Registration Rights ................................................. 10
5.2 Adjustments ......................................................... 10
SECTION 6 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS ................... 11
6.1 Organization. ....................................................... 11
6.2 Corporate Power and Authority ....................................... 11
6.3 Binding Effect ...................................................... 11
6.4 Ownership ........................................................... 11
6.5 Total Shares ........................................................ 11
6.6 Finder's Fees ....................................................... 12
6.7 Investment .......................................................... 12
6.8 Investigation; No General Solicitation .............................. 12
6.9 Sophistication and Financial Condition of Stockholder ............... 12
6.10 Status of Subject Securities ........................................ 13
6.11 Government Consent .................................................. 13
SECTION 7 MISCELLANEOUS ........................................................ 13
7.1 Successors and Assigns .............................................. 13
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7.2 Certain Events ................................................... 13
7.3 Benefits of Agreement Restricted to Parties ...................... 13
7.4 Notices .......................................................... 13
7.5 Severability ..................................................... 14
7.6 Construction ..................................................... 15
7.7 Entire Agreement ................................................. 15
7.8 Counterparts ..................................................... 15
7.9 Governing Law .................................................... 15
7.10 Transaction Costs ................................................ 15
7.11 Amendment ........................................................ 15
7.12 Specific Performance ............................................. 16
7.13 Jurisdiction; Consent to Service of Process; Waiver .............. 16
7.14 Waiver of Jury Trial ............................................. 16
7.15 Further Assurances ............................................... 16
7.16 Powers of Attorney ............................................... ▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ A Definitions
EXHIBITS:
Exhibit A Compliance Certificate
Exhibit B Form of Adoption Agreement
Exhibit C Form of Adoption Agreement - Wholly Owned Subsidiaries
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STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of ____ __,
2002, is entered into by and among Lyondell Chemical Company, a Delaware
corporation, and the Stockholders.
The definitions of capitalized terms used in this Agreement are set
forth in Appendix A.
RECITALS
WHEREAS, Lyondell Chemical Company and Occidental Chemical Holding
Corporation, a California corporation ("OCHC"), entered into a Securities
Purchase Agreement dated as of July 8, 2002 (the "Securities Purchase
Agreement"), governing the sale by the Company to OCHC of Series B Common Stock,
Warrants and contingent consideration;
WHEREAS, as required by the terms of the Securities Purchase
Agreement, each Stockholder agrees for the benefit of the Company as set forth
in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained in this
Agreement, the Parties hereby agree as follows:
SECTION 1
TERM
1.1 Term. This Agreement is effective as of the date hereof until the
Termination Date. "Termination Date" means, (i) as to Occidental and its Wholly
Owned Affiliates, the date Occidental and its Wholly Owned Affiliates
beneficially own in the aggregate, directly or indirectly, less than [16]
million shares of Common Stock (excluding for purposes of this Section 1.1,
shares to be issued to OCHC or its Subsidiaries upon exercise of a Warrant) and
(ii) as to a transferee that is not a Wholly Owned Affiliate of OCHC, the date
such transferee and its Affiliates beneficially own in the aggregate, directly
or indirectly, less than 5 million shares of Common Stock.
1.2 Effect of Termination. From and after the Termination Date for a
Stockholder, this Agreement shall become null and void and of no further force
and effect except for the provisions of Sections 1.2, 4.4, 4.5 and 7 (except
Sections 7.15 and 7.16), which shall survive the Termination Date for such
Stockholder. Nothing in this Section 1.2 shall be deemed to release any Party
from any liability for its breach of the terms, conditions and restrictions of
this Agreement before the Termination Date for such Stockholder.
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SECTION 2
STANDSTILL
2.1 Standstill. Occidental agrees that neither it nor any of its
Wholly Owned Affiliates, and each Stockholder (other than Occidental and its
Wholly Owned Affiliates) agrees that neither it nor any of its Affiliates,
shall:
(a) in any manner acquire, agree to acquire or make any proposal to
acquire, directly or indirectly, any securities of the Company, whether
such agreement or proposal is made with or to the Company or a third party;
(b) make any unsolicited inquiry, proposal or offer to enter into,
directly or indirectly, any sale of all or substantially all assets or
property of the Company, merger or other similar business combination
involving the Company;
(c) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of
the SEC) to vote, or seek to advise or influence any Person with respect to
the voting of, any Voting Securities of the Company;
(d) except, in the case of Occidental and its Wholly Owned Affiliates,
for (i) participation by Dr. ▇▇▇ ▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on the
Board of Directors and (ii) subject to Section 3.1, voting in matters
presented by the Company for a stockholder vote, form, join or in any way
participate in a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) with respect to any Voting Securities of the Company;
(e) except, in the case of Occidental and its Wholly Owned Affiliates,
for (i) participation by Dr. ▇▇▇ ▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on the
Board of Directors and (ii) subject to Section 3.1, voting in matters
presented by the Company for a stockholder vote, otherwise act, alone or in
concert with others, seek to control or influence the management, Board of
Directors or policies of the Company;
(f) except, in the case of Occidental and its Wholly Owned Affiliates,
for (i) participation by Dr. ▇▇▇ ▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on the
Board of Directors and (ii) subject to Section 3.1, voting in matters
presented by the Company for a stockholder vote, take any action which
might reasonably be expected to require the Company to make a public
announcement regarding the possibility of a merger or other similar
business combination of the Company;
(g) except as expressly provided in Section 3.3, seek election to or
seek to place a representative on the Board of Directors of the Company or
any of its Affiliates or seek the removal of any member of the Board of
Directors of the Company or any of its Subsidiaries;
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(h) initiate, solicit (or participate in a solicitation) or propose
the approval of one or more stockholder proposals with respect to the
Company or any of its Subsidiaries or induce or encourage or attempt to
induce or encourage any other Person to initiate any such stockholder
proposal;
(i) request the Company to, or seek to cause the Company (or its Board
of Directors) to, call any meeting of the stockholders of the Company or
any of its Subsidiaries;
(j) initiate any written consent of the stockholders of the Company or
sign any written consent of the stockholders of the Company or otherwise
take any action by any such written consent unless requested to do so by
the Board of Directors;
(k) grant or agree to grant any proxy or other voting power to any
Person other than the Company or other Persons designated by the Company to
vote at any meeting of the stockholders of the Company, or deposit any
Voting Securities of the Company in a voting trust or, except as
specifically contemplated by this Agreement, subject them to a voting
agreement or other agreement or arrangement with respect to the voting of
such Voting Securities;
(l) disclose any intention, plan or arrangement inconsistent with the
foregoing;
(m) except, in the case of Occidental and its Wholly Owned Affiliates,
for (i) participation by Dr. ▇▇▇ ▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on the
Board of Directors and (ii) subject to Section 3.1, voting in matters
presented by the Company for a stockholder vote, advise, facilitate,
encourage, provide assistance (including financial assistance) to or hold
discussions with any other Persons in connection with any of the foregoing;
or
(n) request a waiver, modification or amendment by the Board of
Directors of any of the foregoing restrictions.
2.2 Exceptions. Notwithstanding Section 2.1:
(a) Occidental and its Wholly Owned Affiliates may, by notice to the
Company, suspend the provisions of Section 2.1 at any time within 30
calendar days after the commencement of a bona fide tender offer or
exchange offer for outstanding shares of Common Stock of the Company that
(i) is made by a Person other than the Company or a controlled Affiliate of
the Company, (ii) is not made pursuant to an agreement between the offeror
and the Company and (iii) to the extent the consideration offered is cash,
contains commitments for or evidence of financing sufficient to pay the
entire cash purchase price; provided, however, that any such suspension
shall apply only with respect to actions commenced by Occidental and its
Wholly Owned Affiliates prior to the time the tender or exchange offer of
such other Person is abandoned or terminated or fails to satisfy clause
(i), (ii) or (iii) above.
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(b) Section 2.1 shall not be applicable to the purchase, directly or
indirectly, by Occidental and its Wholly Owned Affiliates of up to 320,000
shares of Original Common Stock in the open market during any Calendar
Quarter ending after the date hereof so long as after giving effect to such
purchase, Occidental and its Wholly Owned Affiliates will beneficially own
in the aggregate, directly or indirectly, a lower ownership percentage in
the Company than the Occidental Rights Trigger Amount (as defined in the
Securities Purchase Agreement). Occidental hereby agrees, and shall cause
its Wholly Owned Affiliates, to promptly notify the Company of the purchase
of any such shares.
(c) Section 2.1 shall not be applicable to the exercise of the Warrant
or the issuance and delivery by the Company to a Stockholder of (i) PIK
Shares, (ii) Conversion Shares, (iii) Contingent Shares, (iv) Warrant
Shares, (v) Net Payment Shares or (vi) the Initial Shares.
SECTION 3
VOTING PROVISIONS; BOARD APPOINTMENTS; GOVERNANCE MATTERS
3.1 Voting Agreement. Occidental agrees, and shall cause its Wholly
Owned Affiliates to agree, and each Stockholder (other than Occidental and its
Wholly Owned Affiliates) agrees, and shall cause its Affiliates to agree, that
until the Termination Date for such Stockholder, each share of each class of
Voting Securities of the Company beneficially owned, directly or indirectly, by
such Stockholder and its Affiliates shall be "present" for the taking of any
Stockholder action and voted "for" the nominees to the Board of Directors
proposed by the Continuing Directors. The provisions of this Section 3.1 shall
apply to both the casting of votes at a general or special meeting of
stockholders of the Company and any execution of stockholder action by written
consent. Each Stockholder agrees and shall, and shall cause its Affiliates to
(i) execute and deliver to the Secretary of the Company not later than 20
calendar days prior to the date of any general meeting of stockholders of the
Company a proxy (in such form as provided by and on behalf of the Board of
Directors) representing all Voting Securities of the Company beneficially owned,
directly or indirectly, by such Stockholder and its Affiliates voted in
accordance with the provisions of this Section 3.1 and (ii) take similar or
analogous action with respect to a request for written consents from
Stockholders of the Company.
3.2 Proxies and Voting Agreements. Each Stockholder hereby revokes any
and all previous proxies granted with respect to matters set forth in Section
3.1. Except as contemplated hereby, no Stockholder shall, directly or
indirectly, grant any proxies or powers of attorney, deposit, or enter into a
voting agreement with respect to, any Voting Securities of the Company with
respect to matters set forth in Section 3.1.
3.3 Board Appointments.
(a) The Company shall exercise all authority under applicable law to
cause Dr. ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to be appointed as directors of
the Company effective as of the date hereof. The Parties agree that if
either such individual is at any time unable, unwilling or not qualified to
serve as a director of the Company, neither
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Occidental, its Subsidiaries nor any other Person shall have the right to
name a substitute or to require that a different individual be appointed to
the Board of Directors.
(b) The Company shall exercise all authority under applicable law to
cause any slate of directors presented to the stockholders of the Company
for election to the Board of Directors to include both Dr. ▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, so long as they are qualified to serve, until Occidental
and its Subsidiaries beneficially own in the aggregate, directly or
indirectly, less than [32] million shares of Common Stock (excluding for
purposes of this Section 3.3(b), shares to be issued to OCHC or its Wholly
Owned Affiliates upon exercise of a Warrant), from which time until the
Termination Date for Occidental and its Wholly Owned Affiliates only one of
such individuals (to be determined in the sole discretion of the Company)
shall be entitled to a seat on the Board of Directors.
3.4 Conversion of Shares of Series B Common Stock into Shares of
Original Common Stock.
(a) Occidental agrees, and shall cause its Wholly Owned Affiliates to
agree, and each Stockholder (other than Occidental and its Wholly Owned
Affiliates) agrees, and shall cause its Affiliates to agree, that,
notwithstanding the terms of conversion set forth in Article IV, Section
II(6)(a) of the Amended and Restated Certificate, any shares of Series B
Common Stock beneficially owned by a Stockholder that are Initial Shares,
Net Payment Shares, Contingent Shares or PIK Shares may be converted into
shares of Original Common Stock at the option of a Stockholder only at any
time:
(i) after ___________, 2005/1/;
(ii) after ____________, 2004/2/, but only if the Company would
be entitled, without breach or violation of any of the
covenants in the indentures and other agreements governing
its indebtedness outstanding at such time (and without
reliance on Section 4.07(b)(xv) of the Indenture dated as of
May 17, 1999 between the Company and The Bank of New York,
as Trustee, relating to the Company's Senior Secured Notes
2007 or any like provision of any other indenture to which
the Company is a party), to pay, immediately after
conversion of the outstanding shares of Series B Common
Stock proposed to be converted, cash dividends on the shares
of Series B Common Stock to be converted at the same rate
per share as the Company paid on its outstanding shares of
Original Common Stock on the last dividend payment date
immediately preceding such time, all as reasonably
determined in good faith by the Company;
(iii) with the prior written consent of the Company, pursuant to
action by the Board of Directors; or
--------------------
1 The date that is the third anniversary of the first issuance of Series B
Common Stock will be inserted.
2 The date that is the second anniversary of the first issuance of Series B
Common Stock will be inserted.
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(iv) following an acquisition by any person of a majority of the
outstanding Voting Securities of the Company in a
transaction not approved by the Board of Directors.
(b) If the timing of the conversion so requires, then, in addition to
the items set forth in Article IV, Section 6(c)(i) of the Amended and
Restated Certificate, each share of Series B Common Stock submitted to the
Company for conversion shall also be accompanied by a certified copy of the
resolutions of the Board of Directors consenting to the conversion or
stating that the conditions for conversion set forth in this Section 3.4
have been satisfied. If OCHC or its Wholly Owned Affiliate request
conversion of one or more shares of Series B Common Stock and the timing of
such conversion requires a certified copy of resolutions of the Board of
Directors consenting to such conversion or stating that the conditions for
conversion set forth in this Section 3.4 have been satisfied, the Board of
Directors shall promptly consider such conversion and provide OCHC or its
Wholly Owned Affiliate, as applicable, with certified resolutions
reflecting the results of such consideration.
(c) From the date hereof until the date OCHC and its Wholly Owned
Affiliates cease to beneficially own in the aggregate, directly or
indirectly, shares of Series B Common Stock eligible for conversion
pursuant to this Section 3.4 and Article IV, Section 6 of the Amended and
Restated Certificate, the Company shall cause the time period commencing
with the date a dividend is declared on shares of the Series B Common Stock
and the related record date to not exceed sixty calendar days unless
otherwise required by applicable law.
3.5 Number of Authorized Shares of Series B Common Stock. (a) From the
date hereof until the Termination Date for OCHC and its Wholly Owned Affiliates,
the Company shall not effect an amendment to the Amended and Restated
Certificate (whether by merger, consolidation or otherwise) that increases the
number of authorized shares of Series B Common Stock without the prior written
consent of OCHC.
SECTION 4
TRANSFERS
4.1 Transfers.
(a) No Stockholder may Transfer a Subject Security except as permitted
by and in accordance with Sections 4.1(b) or 4.1(c).
(b) A Stockholder may Transfer, subject to applicable laws, Warrant
Shares, Conversion Shares, Net Payment Shares (Original) and Contingent
Shares (Original) as follows:
(i) pursuant to a registered public offering in accordance with
the terms and conditions of the Registration Rights
Agreement (a "Registered Public Offering");
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(ii) pursuant to Rule 144 of the Securities Act in an
unsolicited "broker's transaction" (as defined in Rule
144 of the Securities Act) on a securities exchange in
compliance with the volume limitations set forth in
Rule 144(e) of the Securities Act (regardless of
whether such volume limitations are applicable by law
to the transferor Stockholder); or
(iii) in connection with a sale of not more than 15 million
shares in a single transaction or series of related
transactions.
(c) OCHC may Transfer any Subject Security to any Wholly Owned
Affiliate.
(d) Notwithstanding the restrictions on Transfer set forth in
this Section 4.1, a Stockholder may mortgage, pledge, encumber or
create or suffer to exist any pledge, lien or encumbrance upon or
security interest in ("Pledge") all or part of its Subject Securities
to any one or more Approved Lenders; provided that the Pledge shall be
evidenced by an instrument, the form of which shall be reasonably
satisfactory to the Company, wherein the Approved Lender receiving
such Pledge shall agree that in the event it obtains a right of
foreclosure on a Stockholder's Subject Securities, such Approved
Lender shall (i) assume all of the obligations of such Stockholder
hereunder and (ii) be bound by the terms, conditions and restrictions
set forth in this Agreement. The term "Pledge" is used herein both as
a noun and as a verb. The term "Approved Lender" is used herein to
mean any bank, insurance company, investment bank or other financial
institution that is regularly engaged in the business of making loans.
4.2 Compliance Certificate; Adoption Agreement.
(a) As a condition to the Company's obligation to effect a
Transfer permitted under Section 4.1(b), the transferor Stockholder
shall execute and deliver a certificate of compliance with Section
4.1(b) in the form of Exhibit A attached hereto or in such other form
that is reasonably satisfactory to the Company. In addition, any
transferee (other than a QIB) who acquires five million or more
Subject Shares pursuant to a Transfer in accordance with Section
4.1(b) and such transferee's ultimate parent entity shall execute an
Adoption Agreement in the form of Exhibit B attached hereto or in such
other form that is reasonably satisfactory to the Company.
(b) As a condition to the Company's obligation to effect a
Transfer permitted under Section 4.1(c), any transferee of Subject
Securities shall execute an Adoption Agreement in the form of Exhibit
C attached hereto or in such other form that is reasonably
satisfactory to the Company.
4.3 Invalid Transfers. Any Transfer of Subject Securities
contrary to the provisions of this Section 4 shall be null and void, and the
transferee shall not be recognized by the Company as the holder or owner of such
Subject Security Transferred for any purpose (including voting or dividend
rights), unless and until the requirements of Sections 4.1, 4.2, 4.4 and 4.5
have been satisfied. No Subject Security shall be transferred on the books of
the Company until each of such provisions have been satisfied.
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4.4 Compliance with Securities Laws. No Stockholder shall
Transfer its interest in a Subject Security at any time if such action would
constitute a violation of any federal or state securities or blue sky laws or a
breach of the conditions to any exemption from registration of such Subject
Security under any such laws or a breach of any undertaking or agreement of a
Stockholder entered into pursuant to such laws or in connection with obtaining
an exemption thereunder, and, except in the case of a Registered Public
Offering, the Company shall not be required to transfer upon its books such
Subject Security unless prior thereto the Company shall have received an opinion
of counsel in form and substance reasonably satisfactory to the Company that
such transaction is in compliance with this Section 4.4. This Section 4.4 shall
survive termination of this Agreement for the maximum period permitted by
applicable law.
4.5 Restrictive Legends.
(a) A copy of this Agreement will be filed with the Secretary of
the Company and kept with the records of the Company.
(b) All certificates representing shares of Subject Shares shall
bear the following legend noted conspicuously on such certificates:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SHARES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AS TO THE AVAILABILITY
OF AN EXEMPTION FROM REGISTRATION AND THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH
IN A STOCKHOLDERS AGREEMENT. NO TRANSFER OF THESE
SHARES WILL BE EFFECTIVE UNLESS AND UNTIL THE
TERMS AND CONDITIONS OF SUCH STOCKHOLDERS
AGREEMENT HAVE BEEN COMPLIED WITH IN FULL AND NO
PERSON MAY REQUEST THE COMPANY TO RECORD THE
TRANSFER OF ANY SHARES IF SUCH TRANSFER IS IN
VIOLATION OF SUCH STOCKHOLDERS AGREEMENT. A COPY
OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY. THE SHARES EVIDENCED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS
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ON VOTING PROVIDED FOR IN SUCH STOCKHOLDERS
AGREEMENT AND NO VOTE OF SUCH SHARES THAT
CONTRAVENES SUCH STOCKHOLDERS AGREEMENT SHALL BE
EFFECTIVE.
(c) All certificates representing Warrants will bear the
following legend noted conspicuously on such certificates:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO
THE COMPANY AS TO THE AVAILABILITY OF AN EXEMPTION
FROM REGISTRATION AND THAT SUCH REGISTRATION IS
NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH
IN A STOCKHOLDERS AGREEMENT. NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL
BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND
CONDITIONS OF SUCH STOCKHOLDERS AGREEMENT HAVE
BEEN COMPLIED WITH IN FULL AND NO PERSON MAY
REQUEST THE COMPANY TO RECORD THE TRANSFER OF ANY
SUCH SECURITIES IF SUCH TRANSFER IS IN VIOLATION
OF SUCH STOCKHOLDERS AGREEMENT. THE SHARES TO BE
ISSUED UPON EXERCISE OF THIS WARRANT ARE SUBJECT
TO RESTRICTIONS ON VOTING PROVIDED FOR IN SUCH
STOCKHOLDERS AGREEMENT AND NO VOTE OF SUCH SHARES
THAT CONTRAVENES SUCH STOCKHOLDERS AGREEMENT SHALL
BE EFFECTIVE. A COPY OF SUCH STOCKHOLDERS
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
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(d) All certificates representing shares of Original Common
Stock acquired by a Stockholder in the open market will bear the
following legend noted conspicuously on such certificates:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON VOTING PROVIDED FOR IN
A STOCKHOLDERS AGREEMENT AND NO VOTE OF SUCH
SHARES THAT CONTRAVENES SUCH STOCKHOLDERS
AGREEMENT SHALL BE EFFECTIVE. A COPY OF SUCH
STOCKHOLDERS AGREEMENT MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST OF THE RECORD HOLDER OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
(e) Until such time as a Subject Security held by a Stockholder
has been registered pursuant to a registration statement under the
Securities Act in accordance with the terms and provisions of the
Registration Rights Agreement, the certificates representing such
Subject Security (including all certificates issued upon Transfer or
in exchange thereof or substitution therefor) will also bear any
legend required under any other applicable laws, including state
securities or blue sky laws.
(f) In the event a Stockholder and/or its Affiliates acquire
beneficial ownership, directly or indirectly, of any other or
additional securities of the Company, such Stockholder shall, and
shall cause its Affiliate, if applicable, to, submit all certificates
representing such securities to the Company so that the legend or
legends required by this Section 4.5 may be placed thereon.
(g) The Company may make a notation on its records or give
stop-transfer instructions to any transfer agents or registrars for
the Subject Securities in order to implement the restrictions set
forth in this Section 4.
SECTION 5
REGISTRATION RIGHTS; ADJUSTMENTS
5.1 Registration Rights. The Stockholders shall have such
registration rights as are set forth in the Registration Rights Agreement.
5.2 Adjustments. If the Company at any time during the term of
this Agreement subdivides its outstanding Original Common Stock or issues a
stock dividend in Original Common Stock, the share amounts referred to in this
Agreement shall be proportionately increased. If the Company at any time during
the term of this Agreement combines its outstanding Original Common Stock, the
share numbers referred to in this Agreement shall be proportionately decreased.
Any adjustment made pursuant to this Section 5.2 shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
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SECTION 6
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder represents and warrants to the Company
that as of the date hereof:
6.1 Organization. Such Stockholder is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which such
Stockholder was incorporated or formed.
6.2 Corporate Power and Authority. Such Stockholder has all
requisite corporate power and authority, or power under its constituent
documents, to enter into this Agreement and to perform its obligations
hereunder. The execution, delivery and performance by such Stockholder of this
Agreement have been duly authorized by all necessary corporate or similar action
on the part of such Stockholder.
6.3 Binding Effect. This Agreement has been duly executed and
delivered by such Stockholder and is a valid and binding agreement of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
6.4 Ownership. Such Stockholder beneficially owns in the
aggregate, directly or indirectly, the amount of securities of the Company set
forth next to its name on the signature page hereto, the Stockholder has the
sole right to vote such securities, as applicable, and, other than this
Agreement, there are no restrictions on rights of disposition or Pledge, charge
or other encumbrance or restriction pertaining to such securities. Except as
provided herein, none of such securities is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of such
securities, and no proxy, power of attorney or other authorization has been
granted with respect to any of such securities. Such Stockholder is not a party
to any option, warrant, purchase right, or other contract or commitment that
could require such Stockholder to Transfer or otherwise dispose of any capital
stock of the Company (other than this Agreement). Such Stockholder is not a
party to any voting trust, proxy or other agreement or understanding with
respect to Voting Securities of the Company (other than this Agreement).
6.5 Total Shares. The securities of the Company listed next to
such Stockholder's name on the signature page hereto are the only securities of
the Company beneficially owned in the aggregate, directly or indirectly, by such
Stockholder, and, other than the Warrant, such Stockholder does not have any
option to purchase or right to subscribe for or otherwise acquire any additional
securities of the Company and has no other interest in or voting rights with
respect to any other securities of the Company. No Wholly Owned Affiliate of
such Stockholder beneficially owns any securities of the Company (other than a
Wholly Owned Affiliate who is also a Party).
-11-
6.6 Finder's Fees. No investment banker, broker or finder is entitled
to a commission or fee from such Stockholder in respect of this Agreement based
upon any arrangement or agreement made by or on behalf of the Stockholder,
except as otherwise provided in the Securities Purchase Agreement, if a party
thereto.
6.7 Investment. Such Stockholder is acquiring the Subject Securities
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, any distribution thereof in violation
of applicable law, and has not offered or sold any portion of the Subject
Securities to be acquired by it. Such Stockholder acknowledges and understands
that investment in the Subject Securities is subject to a high degree of risk
and that it must bear the economic risk of its investment for an indefinite
period of time because the Subject Securities must be held indefinitely (i)
until subsequently registered under the Securities Act and applicable state and
other securities laws or (ii) unless an exemption from registration is available
which depends upon, among other things, the bona fide nature of such
Stockholder's investment intent and the accuracy of such Stockholder's
representations as expressed herein. Such Stockholder understands that any
transfer agent of the Company will issue stop transfer instructions with respect
to the Subject Securities unless such Transfer is subsequently registered under
the Securities Act and applicable state and other securities laws or unless an
exemption from such registration is available. Such Stockholder was not
organized for the purpose of acquiring the Subject Securities.
6.8 Investigation; No General Solicitation. Such Stockholder has
received a copy of the Company SEC Reports. Such Stockholder has had a
reasonable opportunity to ask questions relating to and otherwise discuss with
the Company's management and other parties (i) the terms and conditions of the
offering, (ii) the other information set forth in the Company SEC Reports and
the Securities Purchase Agreement, if a party thereto, and (iii) this Agreement
and the Company's business, management and financial affairs, and such
Stockholder has received satisfactory responses to such Stockholder's inquiries.
To the extent necessary, such Stockholder has retained, at the expense of such
Stockholder, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement, the
Securities Purchase Agreement, if a party thereto, and its acquisition of
Subject Securities. Such Stockholder has relied only on its own independent
investigation and on the representations and warranties of the Company contained
herein and in the Securities Purchase Agreement, if a party thereto, before
deciding to acquire such Subject Securities.
6.9 Sophistication and Financial Condition of Stockholder. Such
Stockholder is an experienced and sophisticated investor and has such knowledge
and experience in financial and business matters or its professional advisors
have such knowledge and experience in financial and business matters as are
necessary to evaluate the merits and risks of an investment in the Subject
Securities and to evaluate the merits and risks of its investment and protect
its own interest in connection with the acquisition of a Subject Security. Such
Stockholder is able to bear the economic risk of this investment regarding the
Company, is able to hold the Subject Securities indefinitely and has a
sufficient net worth to sustain a loss of its entire investment in the Company
in the event such loss should occur.
-12-
6.10 Status of Subject Securities. Such Stockholder has been informed
by the Company that the Subject Securities have not been and will not be
registered under the Securities Act or under any state securities laws,
including Section 25102(f) of the California Corporations Code, except as
specifically provided in the Registration Rights Agreement, and are being
offered and sold in reliance upon federal and state exemptions for transactions
not involving any public offering. Such Stockholder acknowledges that any
certificate representing Subject Securities will bear the legend or legends
specified in Section 4.5.
6.11 Government Consent. Except as may be required under the HSR Act
and such filings as may be required to be made with the SEC, or under state
securities or blue sky laws, no consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of the Purchaser is required in connection with the valid execution and delivery
of this Agreement or the acquisition of the Subject Securities.
SECTION 7
MISCELLANEOUS
7.1 Successors and Assigns. Except as may be expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
successors of each of the Parties hereto. No Party may otherwise assign or
delegate any of its rights or obligations under this Agreement by operation of
law or otherwise (other than as a result of any merger or consolidation) without
the prior written consent of the other Parties, which consent shall be in the
sole and absolute discretion of such other Parties. Any purported assignment or
delegation without such consent shall be void and ineffective.
7.2 Certain Events. Such Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Subject Securities and shall be
binding upon any person to which beneficial ownership, directly or indirectly,
of such Subject Securities shall pass, whether by operation of law or otherwise.
7.3 Benefits of Agreement Restricted to Parties. This Agreement is
made solely for the benefit of the Parties, and no other Person (including each
Party's employees or stockholders) shall have any right, claim or cause of
action under or by virtue of this Agreement.
7.4 Notices. All notices, requests and other communications
(collectively, the "Notices") made pursuant to this Agreement shall be in
writing and signed and correctly dated by the Party sending such Notice. All
Notices shall be delivered personally (by courier or otherwise) or by facsimile
to the receiving Party at the applicable address or facsimile number set forth
below:
If to the Company:
Lyondell Chemical Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
-13-
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
and
Lyondell Chemical Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
If to a Person who is a Stockholder on the date hereof:
Occidental Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
Occidental Chemical Holding Corporation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
Any Notice delivered personally shall be deemed to have been given on the date
it is so delivered, or upon attempted delivery if acceptance of delivery is
refused, and any Notice delivered by facsimile shall be deemed to have been
given on the first Business Day it is received by the addressee (or, if such
Notice is not received during regular business hours of a Business Day, at the
beginning of the next such Business Day). The address and facsimile numbers set
forth above may be changed by a Party by giving Notice of such change of address
or facsimile number in the manner set forth in this Section 7.4.
7.5 Severability. In the event that any provision of this Agreement
shall finally be determined to be unlawful, such provision shall be deemed
severed from this Agreement and every other provision of this Agreement shall
remain in full force and effect. If the economic and legal substance of the
rights and obligations of the Parties are affected in any materially adverse
manner as to any of the Parties and the Parties cannot agree on a lawful
substitute provision, the adversely affected Party shall have the right to
terminate this Agreement immediately upon notice to the other Parties.
-14-
7.6 Construction. In construing this Agreement, the following
principles shall be followed: (i) no consideration shall be given to the
captions of the articles, sections, subsections or clauses, which are inserted
for convenience in locating the provisions of this Agreement and not as an aid
in construction; (ii) no consideration shall be given to the fact or presumption
that any of the Parties had a greater or lesser hand in drafting this Agreement;
(iii) the word "includes" and its syntactic variants mean "includes, but is not
limited to" and corresponding syntactic variant expressions; (iv) the plural
shall be deemed to include the singular, and vice versa; (v) references in this
Agreement to Articles, Sections, Appendices and Exhibits shall be deemed to be
references to Articles and Sections of, and Appendices and Exhibits to, this
Agreement unless the context shall otherwise require; (vi) all Exhibits and
Appendices attached to this Agreement shall be deemed incorporated herein as if
set forth in full herein; (vii) the words "hereof", "herein" and "hereunder" and
words of similar import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; (viii) references to a Person are also
to its permitted successors and permitted assigns; and (ix) unless otherwise
expressly provided, any agreement, instrument or statute defined or referred to
herein means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein.
7.7 Entire Agreement. This Agreement together with the Related
Securities Agreements sets forth the entire agreement and understanding among
the Parties as to the subject matter hereof and merges with and supercedes all
prior discussions, agreements and understandings of every kind and nature among
them.
7.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which when
taken together shall constitute one and the same original document.
7.9 Governing Law. The laws of the State of Delaware shall govern the
construction, interpretation and effect of this Agreement without giving effect
to any conflicts of law principles.
7.10 Transaction Costs. Each Party shall be solely responsible for and
bear all of its own respective costs, fees and expenses.
7.11 Amendment. All waivers, modifications, amendments or alterations
of this Agreement shall require the written approval of each of the Parties.
Except as provided in the preceding sentence, no action taken pursuant to this
Agreement, including any investigation by or on behalf of any Party, shall be
deemed to constitute a waiver by the Party taking such action of compliance with
any representations, warranties, covenants or agreements contained herein. The
waiver by any Party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
-15-
7.12 Specific Performance. Each Party agrees that the other Parties
would be irreparably damaged if for any reason such Party fails to perform any
of such Party's obligations under this Agreement, and that the other Parties
would not have an adequate remedy at law for money damages in such event.
Accordingly, the other Parties shall be entitled to seek specific performance
and injunctive and other equitable relief to enforce the performance of this
Agreement by such Party. This provision is without prejudice to any other rights
that the Parties may have against any other Party for any failure to perform its
obligations under this Agreement.
7.13 Jurisdiction; Consent to Service of Process; Waiver. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY OR ANY DISPUTE UNDER, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT IN THE FEDERAL OR STATE COURTS
OF THE STATE OF DELAWARE, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF THE PARTIES ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT (AS FINALLY ADJUDICATED) RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES SHALL APPOINT THE
CORPORATION TRUST COMPANY, THE ▇▇▇▇▇▇▇▇-▇▇▇▇ CORPORATION SYSTEM, INC. OR A
SIMILAR ENTITY (THE "AGENT") AS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF
PROCESS IN ANY PROCEEDING IN ANY SUCH COURT IN THE STATE OF DELAWARE, AND EACH
OF THE PARTIES SHALL MAINTAIN THE APPOINTMENT OF SUCH AGENT (OR A SUBSTITUTE
AGENT) FROM THE DATE HEREOF UNTIL THE TERMINATION OF THIS AGREEMENT AND
SATISFACTION OF ALL OBLIGATIONS HEREUNDER. THE FOREGOING CONSENTS TO
JURISDICTION AND APPOINTMENTS OF AGENT TO RECEIVE SERVICE OF PROCESS SHALL NOT
CONSTITUTE GENERAL CONSENTS TO SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR
ANY PURPOSE EXCEPT AS PROVIDED ABOVE AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON
ANY PERSON OTHER THAN THE PARTIES. EACH PARTY HEREBY WAIVES ANY OBJECTION IT MAY
HAVE BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON-CONVENIENS.
7.14 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING UNDER, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.
7.15 Further Assurances. From time to time, at the request of any
other Party, each Party shall execute and deliver or cause to be executed and
delivered such additional documents and instruments and take all such further
action as may be necessary or desirable to consummate the transactions
contemplated by this Agreement. When and if applicable, each Stockholder shall
cooperate with the Company and timely comply with requests for information by
the Company which the Company may be required to seek pursuant to Temporary
Treasury Regulation Section 1.382-2T(k)(3).
-16-
7.16 Powers of Attorney. For the purpose of executing an Adoption
Agreement, each Stockholder hereby appoints the Company as agent and attorney of
such Stockholder to execute such Adoption Agreement on their behalf and
expressly bind themselves to the Adoption Agreement by the Company's execution
of that Adoption Agreement without further action on their part. On the
execution of an Adoption Agreement by the Company and any Person, such Person
shall be bound by, and shall have the benefit of, all the terms and conditions
set out in this Agreement to the same extent as if such Person were a
"Stockholder" as defined in this Agreement.
-17-
IN WITNESS WHEREOF, this Stockholders Agreement has been executed on
behalf of each of the Parties by their respective officers thereunto duly
authorized, effective as of the date first written above.
LYONDELL CHEMICAL COMPANY
By:_________________________
Name:
Title:
STOCKHOLDERS
Shares and Warrants Beneficially Owned
at Time of Execution
------------------------------------------------------------------------
Original Series B Common
Stockholder Common Stock Stock Warrants
----------- ----------------------- -------------------- ---------------------
(Includes Subject
Shares and shares
acquired in the open
market)
Occidental Chemical Holding
Corporation
By:________________________________ _______________________ ____________________ _____________________
Name:
Title:
Occidental Petroleum Corporation*
By:________________________________ _______________________ ____________________ _____________________
Name:
Title:
*Note: Amounts listed do not include those shares and warrants beneficially
owned by OCHC.
APPENDIX A
TO
STOCKHOLDERS AGREEMENT
DEFINITIONS
"Affiliate" shall mean any Person that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified; provided, however, that for purposes of this
Agreement neither the Partnership nor any entity controlled by it shall be
considered an Affiliate of the Company or of the Purchaser. For purposes of this
definition, the term "control" shall have the meaning set forth in 17 CFR
230.405 as in effect on the date hereof.
"Agreement" shall mean this Stockholders Agreement entered into among
the Parties as of the date hereof.
"Amended and Restated Certificate" shall mean the Amended and Restated
Certificate of Incorporation of Lyondell Chemical Company that was filed with
the Secretary of State of the State of Delaware on [______], 2002.
"Approved Lender" shall have the meaning set forth in Section 4.1(d).
A Person shall be deemed to "beneficially own," or to have "beneficial
ownership" of, any securities of the Company (which securities shall also be
deemed "beneficially owned" by such Person) that such Person is deemed to
"beneficially own" within the meaning of Rule l3d-3 under the Exchange Act.
"Board of Directors" shall mean the Board of Directors of the Company
and any duly authorized committee thereof.
"Business Day" shall mean any day on which the New York Stock
Exchange, Inc. is open for trading.
"Calendar Quarter" shall mean any of the following periods or any
portion thereof: (i) January 1 through March 31; (ii) April 1 through June 31;
(iii) July 1 through September 30; or (iv) October 1 through December 31.
"Change of Control" shall mean, as to any Party, the occurrence of any
of the following events: (a) there shall be consummated any consolidation,
merger or share exchange of such Party; (b) substantially all of such Party's
properties or assets are sold or otherwise disposed of to any Person or group of
Persons in any one transaction or a series of related transactions; or (c) any
Transfer of the Voting Securities of such Party.
"Common Stock" shall mean the Original Common Stock and the Series B
Common Stock.
Appendix A - Page 1
"Combined Voting Power" shall mean the aggregate votes entitled to be
cast generally in the election of the board of directors, or similar managing
group, of a corporation or other entity by holders of then outstanding Voting
Securities of such corporation or other entity.
"Company" shall mean Lyondell Chemical Company, a Delaware
corporation, or any Surviving Entity.
"Company SEC Reports" shall mean the forms, reports and documents
required to be filed by the Company with the SEC since December 31, 2001.
"Contingent Shares" shall mean the shares of Original Common Stock or
Series B Common Stock that are issued to satisfy the Company's obligation to pay
a Contingent Payment Amount (as defined in the Securities Purchase Agreement).
"Contingent Shares (Original)" shall mean the Contingent Shares that
are shares of Original Common Stock.
"Continuing Directors" shall mean, as of any date of determination,
any member of the Board of Directors who (i) was a member of the Board of
Directors on the date of this Agreement or (ii) was nominated for election to
the Board of Directors with the affirmative vote of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination, or was elected or appointed by the affirmative vote of a majority of
such Continuing Directors.
"Conversion Shares" shall mean any share of Original Common Stock
issued upon conversion of a share of Series B Common Stock in accordance with
the terms of the Series B Common Stock.
"Exchange Act" shall mean the Securities and Exchange Act of 1934.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"Initial Shares" shall mean the shares of Series B Common Stock issued
pursuant to Section 1.1 of the Securities Purchase Agreement.
"Net Payment Shares" shall mean the shares of Original Common Stock or
Series B Common Stock that are issued by the Company upon exercise of a Warrant
in accordance with Section 2(b) of the Warrant.
"Net Payment Shares (Original)" shall mean the Net Payment Shares that
are shares of Original Common Stock.
"Notice" has the meaning set forth in Section 7.4.
"Occidental" shall mean Occidental Petroleum Corporation, a Delaware
corporation.
Appendix A - Page 2
"OCHC" shall mean Occidental Chemical Holding Corporation, a
California corporation.
"Original Common Stock" shall mean all common stock, par value $1.00
per share, of the Company that is not Series B Common Stock.
"Partner Sub Purchase Agreement" shall mean that certain Occidental
Partner Sub Purchase Agreement dated July 8, 2002 among the Company, OCHC,
Occidental Chemical Corporation and Oxy CH Corporation.
"Party" shall mean the Company and the Stockholders.
"Person" shall mean any individual, group, corporation, firm,
partnership, joint venture, trust, business association, organization,
governmental entity or other entity.
"PIK Shares" shall mean any shares of Series B Common Stock issued at
the option of the Company, in lieu of a cash dividend otherwise required to be
paid, under the terms of the Series B Common Stock.
"Pledge" has the meaning set forth in Section 4.1(d).
"QIB" shall mean a "Qualified Institutional Buyer" as defined in Rule
144A of the Securities Act.
"Registered Public Offering" has the meaning set forth in Section
4.1(b)(i).
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated the date hereof among the Company and OCHC.
"Related Securities Agreements" shall mean the Securities Purchase
Agreement, the Registration Rights Agreement and the Warrant.
"Restructuring Transaction" shall mean any merger, consolidation or
recapitalization of the Company (or, if the capital stock of the Company is
affected, any Subsidiary of the Company), or any sale, lease, or other transfer
(in one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the
Company.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Securities Purchase Agreement" has the meaning set forth in the
Recitals to this Agreement.
"Series B Common Stock" shall mean the shares of Series B Common
Stock, par value $1.00 per share, of the Company.
Appendix A - Page 3
"Stockholder" shall mean (i) Occidental and OCHC, (ii) all Persons to
whom Subject Securities are Transferred that are required by the terms of this
Agreement to execute an adoption agreement and (iii) all Persons to whom Subject
Securities are Pledged that are required by the terms of this Agreement to
become a party to this Agreement, and, in each case, their respective
successors, permitted assigns, heirs, executors, trustees and administrators.
"Subject Shares" shall mean the Initial Shares, Net Payment Shares,
Warrant Shares, PIK Shares, Contingent Shares and Conversion Shares, each until
sold pursuant to an effective registration statement or under Rule 144 of the
Securities Act.
"Subject Securities" shall mean the Subject Shares and the Warrants.
"Subsidiary" shall mean, with respect to any Party, any Person of
which such Party, either directly or indirectly, owns 50% or more of the equity
or voting interests.
"Surviving Entity" shall mean an ultimate parent corporation or other
entity with a class of equity securities registered under Section 12 of the
Exchange Act and resulting from any Restructuring Transaction of the Company
where (x) the stockholders of the Company immediately prior to such
Restructuring Transaction beneficially own, immediately after such Restructuring
Transaction, directly or indirectly, shares or other ownership interests
representing in the aggregate more than 50% of (a) the then outstanding common
stock or other equity interests of the such Surviving Entity and (b) the
Combined Voting Power of the then outstanding Voting Securities of the Surviving
Entity or (y) the Continuing Directors at the time of the initial approval of
such Restructuring Transaction by the board of directors would immediately after
such Restructuring Transaction constitute a majority of the Board of Directors,
or similar managing group, of the Surviving Entity.
"Termination Date" has the meaning set forth in Section 1.1.
"Transfer" shall mean, with respect to any Subject Security, to
directly or indirectly (whether or not through an underwriter), offer, sell,
convey, distribute, transfer (by merger or otherwise), assign, devise, exchange,
encumber, gift, pledge, grant any option with respect to, hypothecate or
otherwise dispose of such Subject Security, or enter into any agreement,
arrangement or understanding with respect to the foregoing. Notwithstanding the
foregoing, as used herein, a "Transfer" shall not include any Transfer that
occurs by virtue of a Change of Control of Occidental.
"Voting Securities" shall mean all securities of a corporation or
other entity having the right to vote in an election of the board of directors,
or similar managing group, of such corporation or other entity, whether at all
times or only so long as no senior class of securities of such corporation or
other entity has such voting power by reason of any contingency.
"Warrant" shall mean the Warrants to purchase Original Common Stock of
the Company issued pursuant to the Securities Purchase Agreement.
"Warrant Shares" shall mean the shares of Original Common Stock of the
Company issued upon exercise of the Warrant.
Appendix A - Page 4
"Wholly Owned Affiliate," with respect to any Party, shall mean
any Affiliate of such Party that is wholly owned, directly or indirectly, by
such Party's ultimate parent entity.
Appendix A - Page 5
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
TO: Lyondell Chemical Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
FROM: ____________________ (the "Stockholder")
DATE: _______________, 20___
RE: Transfer of Subject Securities pursuant to the Stockholders Agreement
dated as of _________, 2002 among Lyondell Chemical Company, a
Delaware corporation (the "Company"), and the Stockholders as defined
therein (the "Stockholder Agreement").
This compliance certificate (this "Certificate") is delivered to the
Company pursuant to Section 4.2(a) of the Stockholder Agreement. Capitalized
terms used herein but not defined herein have the meanings set forth in the
Stockholder Agreement.
The undersigned Stockholder hereby represents and warrants that its
Transfer of Subject Securities was in compliance with Section 4.1(b) of the
Stockholder Agreement. Such Transfer consisted of:
1. Type and Number of Subject Securities:
Warrant Shares: __________________________
Conversion Shares: _______________________
Net Payment Shares (Original): ___________
Contingent Shares (Original): ____________
2. Nature of Transfer: (check one)
! pursuant to a Registered Public Offering;
! pursuant to Rule 144 of the Securities Act and the number of shares
Transferred does not exceed the volume limitations set forth in Rule
144(e) of the Securities Act (regardless of whether such volume
limitations are applicable to the transferor stockholder); or
A-1
! a sale of not more than 15 million shares in a single transaction or
series of transactions.
3. Transferee:
___________________________________________
(name)
___________________________________________
___________________________________________
___________________________________________
(address and contact information)
4. Date of Transfer:
______________, 20___
5. Status of Transferee:
The Transferee ! is ! is not a QIB.
Total number of shares of Common Stock beneficially owned, directly or
indirectly, by such Transferee after giving effect to this Transfer (required
only if the Transferee is not a QIB):
___________________________________________
(Number includes Subject Shares and shares acquired in the open
market.)
Accompanying this Certificate is the opinion of counsel required by
Section 4.4 of the Stockholder Agreement. Also attached hereto, if required by
Section 4.2 of the Stockholder Agreement, is a fully executed Adoption
Agreement.
The undersigned Stockholder hereby requests that the Company transfer
the type and number of shares specified in paragraph 1 above upon its books.
[STOCKHOLDER]
By:_______________________
Name:
Title:
NOTE: The above signature must correspond exactly with the name in the
signature page of the Stockholder Agreement or in the Adoption
Agreement attached hereto.
A-2
EXHIBIT B
FORM OF ADOPTION AGREEMENT
This Adoption Agreement ("Adoption") is executed pursuant to the terms
of the Stockholders Agreement dated as of ___________, 2002 among Lyondell
Chemical Company, a Delaware corporation (the "Company"), and the Stockholders
as defined therein (the "Stockholder Agreement"), by the transferee
("Transferee") and the ultimate parent entity of the Transferee ("Parent")
executing this Adoption. A copy of the Stockholder Agreement is attached hereto
and is incorporated herein by reference. Capitalized terms used herein but not
defined herein have the meanings set forth in the Stockholder Agreement.
By the execution of this Adoption Agreement, Transferee and Parent
agree as follows:
1.1 Transfer. Transferee is acquiring _______________ Subject Shares from
_________________[TRANSFEROR] on _______________, 20___ (the "Acquired Shares").
1.2 Acknowledgment. Transferee and Parent acknowledge that (i) Transferee
is acquiring the Acquired Shares subject to the terms and conditions of the
Stockholder Agreement and (ii) Transferee and Parent beneficially own in the
aggregate, directly or indirectly, after giving effect to the acquisition of the
Acquired Shares, more than 5 million shares of Common Stock.
1.3 Agreement. Transferee and Parent (i) agree that the Acquired Shares
acquired by Transferee, and any other securities of the Company, including
Subject Shares and shares of Original Common Stock purchased on the open market
that may be acquired by Transferee or Parent or their Subsidiaries in the
future, shall be bound by and subject to the terms of the Stockholder Agreement
in accordance with the terms thereof and (ii) hereby adopt the Stockholder
Agreement with the same force and effect as if they were originally parties
thereto and, effective as of the date hereof, are each a Stockholder as defined
therein.
1.4 Representation. Transferee and Parent have the total number of shares
of Common Stock set forth next to their signature hereto.
1.5 Notice. The address of Transferee and Parent for purposes of Section
7.4 of the Stockholder Agreement is as follows:
If to Transferee:
_________________________
_________________________
_________________________
_________________________
Attention: ______________
Telecopy Number: ________
B-1
with a copy to:
_________________________
_________________________
_________________________
_________________________
Attention: ______________
Telecopy Number: ________
If to Parent:
_________________________
_________________________
_________________________
_________________________
Attention: ______________
Telecopy Number: ________
with a copy to:
_________________________
_________________________
_________________________
_________________________
Attention: ______________
Telecopy Number: ________
B-2
IN WITNESS WHEREOF, this Adoption Agreement has been executed
on behalf of the undersigned by its officer thereunto duly authorized, effective
as of ___________, 20__.
Shares Beneficially Owned
at Time of Execution
-------------------------------------------------
Stockholder (Transferee) Common Stock
----------------------- ------------
(includes Subject Shares and shares
purchased on the open market)
[Name]
By:_________________________________________ _________________________________________________
Name:
Title:
[Parent]
By _________________________________________ _________________________________________________
Name:
Title:
Note: The number of shares listed as beneficially owned by Parent does not
include the shares beneficially owned by Transferee.
ACCEPTED AND AGREED to on behalf of the
Company and all Stockholders pursuant to
Section 7.16 of the Stockholder Agreement.
LYONDELL CHEMICAL COMPANY
(For itself and as Attorney-in-Fact for the Stockholders)
By: ____________________________________________
Name:
Title:
Date: _____________________ , 20___
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EXHIBIT C
FORM OF ADOPTION AGREEMENT - WHOLLY OWNED AFFILIATES
This Adoption Agreement ("Adoption Agreement") is executed
pursuant to the terms of the Stockholders Agreement dated as of ___________,
2002 among Lyondell Chemical Company, a Delaware corporation (the "Company"),
and the Stockholders as defined therein (the "Stockholder Agreement"), by the
transferee ("Transferee") executing this Adoption Agreement. A copy of the
Stockholder Agreement is attached hereto and is incorporated herein by
reference. Capitalized terms used herein but not defined herein have the
meanings set forth in the Stockholder Agreement.
By the execution of this Adoption Agreement, the Transferee
agrees as follows:
1.1 Type and Number of Shares. Transferee is acquiring certain
Subject Securities of the Company as set forth below:
Subject Shares:
Original Common Stock: _____________________________
Series B Common Stock: ______________________________
Warrants: ____________________________________________
Transferor: __________________________________________
Date of Transfer: ____________________________________
(the "Acquired Securities").
1.2 Acknowledgment. Transferee acknowledges that Transferee is
acquiring the Acquired Securities subject to the terms and conditions of the
Stockholder Agreement.
1.3 Agreement. Transferee (i) agrees that the Subject Securities of the
Company, acquired by Transferee, and certain other securities of the Company
(including Subject Securities and shares of Original Common Stock purchased on
the open market) that may be acquired by the Transferee in the future, shall be
bound by and subject to the terms of the Stockholder Agreement pursuant to the
terms thereof and (ii) hereby adopts the Stockholder Agreement with the same
force and effect as if it were originally a party thereto and, effective as of
the date hereof, is a Stockholder as defined therein.
1.4 Representation. Transferee is a Wholly Owned Affiliate of a
Stockholder. Transferee beneficially owns in the aggregate, directly and
indirectly, the total number of Warrants and shares of Common Stock set forth
next to its signature hereto.
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1.5 Notice. The address of Transferee for purposes of Section 7.4 of the
Stockholder Agreement is as follows:
______________________________________
______________________________________
______________________________________
______________________________________
Attention: ___________________________
Telecopy Number: _____________________
with a copy to:
______________________________________
______________________________________
______________________________________
______________________________________
Attention: ___________________________
Telecopy Number: _____________________
C-2
IN WITNESS WHEREOF, this Adoption Agreement has been executed
on behalf of the undersigned by its officer thereunto duly authorized, effective
as of ___________, 20__.
Shares and Warrants Beneficially Owned
at Time of Execution
-------------------------------------------------------------------------
Original Series B Common
Stockholder Common Stock Stock Warrants
----------- ------------------------ --------------------- -------------------
(includes Subject
Shares and shares
purchased on the open
market)
By: ___________________________________ __________ __________ __________
Name:
Title:
ACCEPTED AND AGREED to on behalf of the
Company and all Stockholders pursuant to
Section 7.16 of the Stockholder Agreement.
LYONDELL CHEMICAL COMPANY
(For itself and as Attorney-in-Fact for the Stockholders)
By: ________________________________________
Name:
Title:
Date: ______________________ , 20___
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